Citing opposition from local politicians and community activists, Amazon abruptly announced Thursday that it has cancelled its plans to build its second headquarters in New York City. A major bone of contention is the $2.8 billion worth of incentives NY was going to give to Amazon.
NY has offered Amazon (NASDAQ:AMZN) as much as $3 Billion in incentives for the latter to build its headquarters in Queens.
"A small group politicians put their own narrow political interests above their community", he said.
City Councilman Jimmy Van Bramer speaks at a podium on February 14, 2019, celebrating Amazon's decision to pull out of a deal to open a headquarters in NYC. "Apparently, the company decided that was too much to ask".
"This all of a sudden became a flawless test case for all those arguments", said Joe Parilla, a fellow at the Brooking Institution's Metropolitan Policy Program.
Amazon blamed local opposition for its abrupt reversal, which some saw as the latest evidence of the progressive movement's surging influence ahead of the battle for the Democratic presidential nomination next year.
The new headquarters was initially framed by top NY politicians including Governor Andrew Cuomo as a tremendous job creation opportunity that could benefit the broader NY region. A third site in Nashville, Tennessee, would get 5,000.More news: New round of China-U.S. trade talks starts in Beijing
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"You have to be tough to make it in New York City", he said. Lawmakers resented being excluded from negotiations for the deal, and decried the US$3 billion in government subsidies offered to a company run by the world's richest man, while the city itself is facing budget cuts. NY mayor Bill DiBlasio, a supporter of bringing Amazon to the city, recently said he believes the project will go through.
In a joint letter today addressed to "Dear Amazon", Emanuel and Pritzker said whatever happened in the Big Apple, "We want to assure you that Chicago, our surrounding communities and the state of IL remain ready to welcome HQ2 to our city, and to ensure a smooth and successful transition and launch".
"I hope this is the start of a conversation about vulture capitalism and where our tax dollars are best spent", wrote New York City Council Speaker Corey Johnson. It will also expand its existing NY offices, which already have about 5,000 employees. The company planned to hire 700 people this year in New York City and has plenty of time to adjust and absorb that growth at other sites, the person said. That posed a regulatory hurdle to a deal that had been engineered to avoid the usual lengthy approval process including a vote in the City Council. "It's unfortunate that we have lost out on an opportunity to create tens of thousands of jobs for city residents and generate billions of dollars in tax revenue to fund vital services including infrastructure improvements for transportation, schools, and open space".
Reactions were swift on both sides of the issue after the massive company said earlier Thursday that it wasn't willing to work with state and local politicians who oppose the plan. But an Amazon executive would not give such a commitment.
Amazon's approach to HQ2 has irked NY lawmakers, particularly those who represent Long Island City. But they were divided over the incentives: 46 per cent in favour, 44 per cent against.
Amazon also faced anti-gentrification sentiment in a city where income inequality and a lack of affordable housing have become major concerns.
"I woke up this morning and I had no clue this would happen".
"This is a shocker in many ways", said GeekWire's Todd Bishop. She said the Amazon was going to use "taxpayer giveaways" to "force its empire-building on our neighborhoods".
"It's another validation that Fort Worth's Alliance Airport was a brilliant idea that continues to draw giant brands to this side of the region", Strayer said.