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Lost opportunity? Feeling unwelcome, Amazon ditches plans for New York hub

Amazon said it would not conduct a new headquarters search and would focus on growing at other existing and planned offices.

Reuters  |  New York 

Amazon
A logo of the Amazon fulfillment is seen outside the Amazon fulfillment center in Kent, Washington, US. Photo: Reuters

 com Inc abruptly scrapped plans to build a major outpost in that could have created 25,000 jobs, blaming opposition from local leaders upset by the nearly $3 billion in incentives promised by state and city politicians.

The company said on Thursday it did not see consistently "positive, collaborative" relationships with state and local officials. Opponents of the project feared congestion and higher rents in the Long Island City neighbourhood of Queens, and objected to handing billions in incentives to a company run by Jeff Bezos, the world's richest man.

State Senator Michael Gianaris, who represents and was a vocal of the deal, told a news conference on Thursday that the subsidies were unnecessary.

"This was a shakedown, pure and simple," he said.

Amazon's sudden pullout from City prompted finger pointing by and Andrew Cuomo, the politicians who crafted the deal. Cuomo angrily blamed the loss on local politicians while de Blasio blamed

Cuomo said in a statement that a small group of politicians had "put their own narrow political interests" above those of New Yorkers.

The year-long search for its so-called HQ2 culminated in Amazon picking and New York after hundreds of municipalities, from Newark, N.J. to competed for the coveted tax-dollars and high-wage jobs the project promised.

Amazon said it would not conduct a new and would focus on growing at other existing and planned offices. The company already has more than 5,000 employees in and plans to continue to hire there, Amazon said on Thursday.

A Siena College Poll conducted earlier this month found 56 percent of registered voters in New York supported the Amazon deal, while 36 percent opposed it.

CITY SHAKEDOWN?

Some New Yorkers mounted protests after the deal was announced, angered by the $2.8 billion in incentives promised to Amazon and fearing further gentrification in a neighbourhood once favoured by artists looking for cheap studio space.

U.S. Congresswoman Alexandria Ocasio-Cortez, a of the project and a self-described democratic socialist whose district spans parts of and the Bronx, cheered the reversal by the world's third most valuable public company.

"Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbours defeated Amazon's corporate greed, its worker exploitation, and the power of the richest man in the world," she wrote on

People briefed on the decision said Amazon had made the decision early on Thursday amid rising concerns about the small vocal minority. The people said Amazon will not shift any of the planned jobs to where an operations hub is planned or Virginia, but plans to grow its existing network of locations.

Amazon had not acquired land for the project, making it easy to scrap its plans, a person briefed on the matter told on Friday.

LOST OPPORTUNITY?

In a statement, de Blasio blamed Amazon for failing to address local criticism.

"We gave Amazon the opportunity to be a good neighbour and do business in the greatest city in the world," he said. "Instead of working with the community, Amazon threw away that opportunity."

Some long-time residents in Long Island City, which sits across the from midtown Manhattan's skyscrapers, feared being forced out by rising rents and untenable pressure on already overburdened subway and High-rise towers have sprouted across the neighbourhood in recent years.

"This is a stunning development, with Amazon essentially giving in to vocal critics," said Mark Hamrick, a at The about-turn could spook other thinking about expanding in New York, he added.

Alphabet Inc's has avoided competitions between cities for offices, and its growing presence in lower Manhattan has met with little serious blowback.

said in December it plans to invest more than $1 billion on a new campus in New York to double its current headcount of more than 7,000 people.

"I think the (Amazon) PR event turned out to be a mistake," said Jason Benowitz, at the Roosevelt Investment Group, who owns Amazon shares.

Shares of Amazon fell 1 percent.

'REALLY GOOD POKER PLAYERS'

Hours before the announcement, Amazon officials in New York betrayed no knowledge of the deal's cancellation when they met with local community members on Thursday morning, said Kenny Greenberg, a of Long Island City's community board.

"Either they are really good poker players or they were not aware," Greenberg said of the Amazon representatives. "There was no hint of this at all."

The meeting with Amazon officials had been held to answer concerns from the community about labour conditions for Amazon's warehouse and delivery workers and the company's opposition to labour unions.

U.S. Carolyn Maloney, a Democrat whose district includes the proposed site, lamented the loss of jobs and new revenues.

"This is not the Valentine that NY needed," she wrote, adding that she had been ready to push for changes to the deal to address local concerns.

 

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, February 15 2019. 03:13 IST
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