It looks like Amazon’s year-long search for a so-called second headquarters was all for naught. After selecting New York City as one of two new campuses in November, the company is now saying never mind. Amazon announced Thursday that it will no longer open a highly anticipated corporate office in Long Island City, Queens, which was expected to eventually employ 25,000 people. The Washington Post first reported that the NYC deal was in jeopardy last week.
“You have to be tough to make it in New York City. We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world. Instead of working with the community, Amazon threw away that opportunity,” mayor Bill de Blasio said in a statement.
While the majority of New Yorkers welcomed Amazon’s coming to Queens, the company also faced intense backlash from local lawmakers, unions, and citizens who said the corporation brokered an unfair agreement with the city, the state, and its taxpayers. The company was expected to receive almost $3 billion in tax breaks and other government incentives in exchange for opening its new corporate office (as well as a helicopter pad for Amazon CEO Jeff Bezos).
Critics of the deal, like US representative Alexandria Ocasio-Cortez, state senator Michael Gianaris, and city council member Jimmy Van Bramer, complained about the lack of information they were provided and the enormous subsidies Amazon would receive from the local government. Activists and lawmakers also raised concerns over Amazon’s labor practices and its anti-union track record.
Amazon appeared to blame this pushback for its decision Thursday. “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,” the company said in a statement. “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 Cuomo echoed this sentiment Thursday afternoon in a statement of his own. “A small group politicians put their own narrow political interests above their community—which poll after poll showed overwhelmingly supported bringing Amazon to Long Island City—the state’s economic future and the best interests of the people of this state,” he said, citing the tens of thousands of jobs and “nearly $30 billion dollars in new revenue” that the state projected Amazon’s headquarters would bring. “The New York State Senate has done tremendous damage. They should be held accountable for this lost economic opportunity.”
Amazon says that it will nonetheless continue to expand its presence in New York City, where 5,000 of its employees already work. And the retail giant will go forward with its other new proposed offices in Nashville, Tennessee, and northern Virginia. However, Amazon says it will not reopen the HQ2 search.
In its statement, Amazon repeatedly thanked de Blasio and New York governor Andrew Cuomo, who teamed up to lure Amazon to their jurisdiction without much oversight or transparency. “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,” reads the statement, which isn’t attributed to an individual executive.
“This should be a gut check. Not on what did these politicians do wrong, but on what New York did wrong in the process,” says Nathan Jensen, a government professor at the University of Texas at Austin and coauthor of Incentives to Pander: How Politicians Use Corporate Welfare for Political Gain. “It’s the governor and the mayor that miscalculated—they tried to impose something on local government that wasn’t an easy sell.”
Local politicians like Gianaris and Van Bramer, who represent the neighborhood where Amazon’s office would have been, were outspoken about what they saw as an opaque process and a deal that amounted to “corporate welfare.” Earlier this month, Gianaris was nominated to sit on the Public Authorities Control Board, where he could have had the power to veto parts of the deal, setting up a potential showdown in Albany.
“Today’s behavior by Amazon shows why they would have been a bad partner for New York in any event,” Gianaris said in a statement. “Rather than seriously engage with the community they proposed to profoundly change, Amazon continued its effort to shakedown governments to get its way. It is time for a national dialogue about the perils of these types of corporate subsidies.”
Amazon’s deal in Queens also became a rallying cry for labor activists and union organizers, who staged a series of protests during hearings over its NYC expansion at New York City Hall. In December, a group of employees at Amazon’s recently opened fulfillment center in Staten Island said they were organizing a unionization campaign with the Retail, Wholesale and Department Store Union. “Rather than addressing the legitimate concerns that have been raised by many New Yorkers, Amazon says you do it our way or not at all, we will not even consider the concerns of New Yorkers—that’s not what a responsible business would do,” Chelsea Connor, director of communications for RWDSU, said in a statement.
A number of critics celebrated Thursday’s announcement as a victory. “Today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world,” Ocasio-Cortez tweeted.
Amazon’s public competition for a second headquarters began in late 2017, when it invited cities across North America to submit bids to be the home of its new corporate offices. A remarkable 238 proposals were entered, and a media circus quickly ensued. The highly publicized search ultimately shone a light on a historically secretive process: how corporations have benefited enormously from taxpayer funds. Amazon now appears tired of the backlash, and Thursday’s announcement sent a message: It won’t try to make nice with its critics.
Updated 2-14-19, 6 pm EST: This story has been updated to include additional comments from Governor Andrew Cuomo and State Senator Michael Gianaris.