Amazon giveth and Amazon taketh away.
Three months after the internet giant announced it would open a 25,000-job headquarters in New York City’s Long Island City neighborhood, the company has changed course. The headquarters had faced fierce public opposition over the planned $3B in tax incentives the city and state had agreed to give Amazon, despite polling showing support and the business community’s pleas and efforts to hold the company to the deal.
Amazon is still planning on bringing a new headquarters project to Northern Virginia, where the state has already passed bills to approve its billion-dollar tax incentive package.
When it made its initial announcement, Amazon promised to bring 25,000 jobs each to Long Island City and National Landing in Arlington, Virginia, along with a 5,000-job hub in Nashville. The company said it will continue with those plans, and will not reopen the bidding process to the other cities that vied for HQ2 in the yearlong sweepstakes that captivated the country. It has not said if the 25,000 jobs that had been slated for New York might shift to the Northern Virginia campus. The company’s agreement there allows for expansion beyond the 25,000 jobs initially planned. Amazon planned to build 4M SF of new offices in Pentagon City, but has an option to double that requirement.
Amazon had signed a letter of intent to lease 1M SF at One Court Square, the skyscraper Citigroup has occupied since it built it in the late 1980s. The building’s owner, Savanna, had expedited the move-out of more than 1,000 Citi employees in preparations for Amazon’s moving in, but the tech giant never wound up signing a lease. Amazon officials had alluded to the possibility of this reversal — first reported by The New York Times — at a recent, contentious New York City Council meeting.
“We were invited to come to New York, and we want to invest in a community that wants us,” Amazon Vice President of Public Policy Brian Huseman said at the meeting.
Days later, the Washington Post reported that Amazon was reconsidering the Long Island City campus. Democratic members of the council and New York State Senate had openly panned the deal, which included Amazon taking advantage of by-right tax incentives based on job creation, as well as discretionary benefits negotiated by Gov. Andrew Cuomo and Mayor Bill de Blasio.
“Let’s be clear, we are excited and happy for Amazon … [But] we don’t measure success in corporate profits,” de Blasio said at the announcement. “This plan that we all put together we are convinced is going to benefit everyday New Yorkers.”
Thursday, de Blasio tweeted that the city gave Amazon the chance “to be a good neighbor,” but the company “threw away that opportunity.”
After Amazon’s announcement, City Council President Corey Johnson — who had accused Amazon of “vulture capitalism” at the most recent council hearing — released a statement that signaled he would continue to be an opponent of large tax breaks for corporations moving to New York. Johnson is running for mayor in 2021.
“I look forward to working with companies that understand that if you’re willing to engage with New Yorkers and work through challenging issues New York City is the world’s best place to do business,” Johnson said. “I hope this is the start of a conversation about vulture capitalism and where our tax dollars are best spent. I know I’d choose mass transit over helipads any day.”
Here is the full statement Amazon released to the public on its decision:
“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. We are disappointed to have reached this conclusion — we love New York, its incomparable dynamism, people, and culture — and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams. We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult. We do not intend to re-open the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada. Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time.”
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