Amazon Backs Out of Deal

February 15, 2019

“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,” read a statement released by the online retail giant on Thursday, which also announced the abandonment of their search for a second headquarters at this time. The statement  went on to claim that 70% of New Yorkers were in favor of their move to Queens, though from the beginning, critics were angered that the deal-making circumvented the normal land-use processes and essentially eliminated any veto power by the City Council.

 

No Smoking Sign on the stairs leading to the Manhattan Tram Station with Anti-Amazon sticker posted on it

 

In November of 2018, Amazon selected Long Island City, Queens and Northern Virginia as its second headquarters (nicknamed HQ2) after a 14-month long search. To attract Amazon, the City promised four million square feet of space and an incentive package valued at $3 billion - including a helipad for Amazon CEO, Jeff Bezos. The agreement specified that Amazon would offer more than 25,000 jobs, with an average wage of over $150,000, over a ten-year period.

 

Community Concerns

 

There were multiple objections to the news. Chief among them related to the value being offered, including enormous tax breaks, while Amazon's CEO is the richest man in world, at a time when our subways are crumbling and a winter during which many public housing projects across the City have had no heat. Among the vocal critics was council member Ben Kallos, who participated in a protest the day after the HQ2 announcement became final. “At a moment in time when our City is facing infrastructure, housing, and transit deficits, we should not be subsidizing one of the largest multi-billion dollar corporations in the United States to the tune of $3 billion" Kallos stated. The company's anti-union stance also did not play well here.

 

 Council member Ben Kallos at a rally on the proposed Amazon HQ2 site, the day after the retail giant announced they chose Long Island City

 

Another objection was the lack of community input and the circumvention of established zoning and land use processes. The day after the announcement, Kallos charged, "Any deal with Amazon must go through the established community zoning-change process and ensure that Amazon hires locally and ethically, meeting our City's standards and prevailing wage requirements. As chair of the committee on Planning Dispositions and Concessions, residents on Roosevelt Island need to know that I will do my best to monitor developments of this deal closely, advocating for transparency and accountability."

 

On Roosevelt Island, rumors began circulating days after the HQ2 announcement that Coler Hospital would be closing, prompting Islanders to worry that Amazon housing would be built on the Island’s northern tip.

 

Vigilance

 

Local elected officials remained vigilant in their opposition throughout the past three months. On February 8, state senator for HQ2’s proposed Long Island City location, Michael Gianaris, wrote an op-ed published in USA Today charging that New York was played. “While some rejoiced over the news [that Amazon chose to come here], our aging subway system continued to crumble, Queens parents fought over scarce kindergarten seats, and housing costs skyrocketed. In an era of historic income inequality, granting massive subsidies to a very wealthy corporation does not mean we were smart: It means we were played.” 

 

Ultimately, sustained perseverance by local politicians and community members appears to have led to yesterdays’s announcement by Amazon, “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. …. 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,” said the official statement.

 

Reactions

 

Islanders were split on the news. In most cases, those who own their apartments, including newer Rivercross residents, were generally more in favor of HQ2 – hoping for a bump in their property value, while the Island’s renters, concerned about the impact Amazon could have on their rents breathed sighs of relief after yesterday’s announcement.

 

Astoria council member Costa Constantinides, a vehement opposer of Amazon from the beginning, wrote on his Facebook page in response to the news that, “It is no shock to anyone that this was a disaster from the start and bad policy.”

 

Congresswoman Carolyn Maloney, who had supported Amazon, acknowledged that the deal wasn’t perfect in a series of tweets, starting with “Disappointed that NYC won't be home to 25K+ new jobs from HQ2 & that LIC will lose out on infrastructure improvements that would have accompanied this project. This is not the Valentine that NY needed,” and acknowledging in tweet two that, “The deal could have been improved. There were legitimate concerns raised and aspects that I wanted changed.”

 

Other Tech Companies Here

 

In contrast, Google has been located in New York since 2000 in a block long building formerly owned by the Port Authority in the Chelsea neighborhood of Manhattan. In December they announced they would be expanding their New York presence, already their largest outside the Bay Area. They sought no special tax breaks, nor did they hold a competition. Google plans to spend $1 billion to develop its Hudson Square campus, which will initially consist of three buildings: 550 Washington Street, 315 Hudson Street, and 345 Hudson Street. They expect to add 7,000 jobs, considered conservative estimate.
 

 

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