Like many a disillusioned NYU freshman, Amazon is pulling out of its plans to make a home in New York. Just 13 weeks after announcing that it would build one of two second headquarters (don’t try to do the math) in Long Island City, Queens, the e-commerce titan released a statement that it was backing out.
There were already rumors that Amazon was planning on putting the kibosh on the deal, due mainly to the the appointment of State Senator Michael Gianaris to the Public Authorities Control Board in early February. Gianaris, who represents Queens, has been a vocal opponent of the Amazon deal. In order for Amazon’s plans to move forward, it needed the approval of the board, any one member of which can veto any deal in front of it. With Gianaris in place, the Amazon deal suddenly looked much more risky.
Amazon’s statement reads, in part:
After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.
Governor Andrew Cuomo and Mayor Bill de Blasio did everything in their power to land the Amazon offices, with Cuomo at one point joking that he would change his name to “Amazon Cuomo.” (Very cool and funny joke to have the executive of your state rename himself after a company, and definitely not dystopian.) Amazon was also able to extract nearly $3 billion in state and city incentives in order to build a large campus in Long Island City, which would have brought in 25,000 jobs.
It was the $3 billion in tax incentives that attracted most of the negative attention: Plenty of tech companies, from Facebook to Google, have built out large presences in New York City without requiring billions in giveaways. But Amazon, a company that has always run on thin margins by seeking ways to save or make money however possible, was able to work over state politicians.
There was also worry from local residents that Amazon would drive up already high housing costs in Queens, and that the city wouldn’t be getting commensurate tax revenue from the company to support the added infrastructure 25,000 new workers would need.
Amazon also said it would not reopen the search for a new city for part of HQ2, and would instead simply build out more in Virginia and Nashville, as well as across its 19 other offices in the U.S. and Canada.
In the larger scheme of things, the loss of 25,000 tech jobs isn’t devastating to New York. In November 2018, Forrester estimated there were 330,000 tech workers in the New York City region (23,000 more than in the Bay Area). By that measure, Amazon would have added an additional 7 percent of tech workers and their income tax revenue. It would have been significant, but New York will soldier on. And meanwhile, New York City officials won’t have to spend time working with the world’s richest man build a private helipad.