Report: Amazon Reconsidering New York City HQ2 Amid Backlash
Amazon may end up deciding that its plan to split its East Coast HQ2 between NYC and Virginia isn't worth the trouble.
Amazon is reconsidering its plans for a 25,000-employee campus in Long Island City, Queens, according to the Washington Post, which cited two unnamed officials. Amazon's development proposal lays out plans for a 4-8 million-square-foot campus, but it has not yet leased or purchased office space for the project, which is not expected to receive final New York state approval until 2020.
Announced in November, the HQ2 locations in LIC and Crystal City, Virginia, marked the culmination of a nationwide pageant where cities across the country vied for Amazon's favor. Amazon selected two strategic locations situated across respective rivers from the two most important hubs on the East Coast -- Manhattan and Washington, D.C.
While Virginia officials have already approved Amazon's subsidy package, things have not gone as smoothly in New York. The deal was heralded as a historic economic development investment by both Governor Andrew Cuomo and New York City Major Bill de Blasio (who usually don't agree on much, to put it mildly.)
However, the proposal was criticized by residents and local government officials, such as State Senator and Deputy Majority Leader Michael Gianaris, City Council Member Jimmy Van Bramer, and others, who felt the deal was pushed through behind closed doors without local input or City Council approval.
Detractors -- including including US Rep. Alexandria Ocasio-Cortez, who represents a nearby district in Queens and the Bronx -- have pointed to the potential neighborhood disruption, strains on an already congested public transit system, and rising rent and property prices that could push out existing residents from nearby neighborhoods.
Gianaris, Van Bramer, and others have also criticized Amazon's anti-union track record, and maligned the billions of dollars in incentives and tax breaks for the tech giant included in the deal. Amazon has said it will turn its $2.5 billion investment into an incremental tax revenue of more than $10 billion over the next 20 years.
Amazon has responded to the backlash by holding closed-door meetings to sway local officials and hiring lobbying and PR firms. The company has also launched an aggressive mailer campaign to Queens residents "from your new neighbors at Amazon" to counter anti-Amazon flyers distributed by Gianaris. This Queens resident has received several.
The Amazon v. Gianaris mail war continues... pic.twitter.com/JPjHTiggYR— Rob Marvin (@rjmarvin1) January 18, 2019
The biggest threat to Amazon's LIC headquarters came when the New York State Senate appointed Gianaris to the Public Authorities Control Board, which will preside over approval of Amazon's development plan. Cuomo has veto power over the appointment, but doing so would draw the ire of a State Senate now controlled by Democrats.
"I'm not looking to negotiate a better deal. I am against the deal that has been proposed and don't believe that it can form the foundation of a negotiation," Gianaris recently told the New York Times.
In a recent city council hearing, Brian Huseman, Amazon's VP for public policy, intimated that Amazon might be reconsidering its plans. The Post report adds more fuel to that fire.
"We were invited to come to New York, and we want to invest in a community that wants us," Huseman said during his testimony.
The power struggle between Gov. Cuomo, the New York State Senate, and the Public Authorities Control Board is very much ongoing. The reports could be strategic moves on Amazon's part in threatening to pull out of the deal, or the company and its founder and CEO Jeff Bezos, the richest man in the world, may truly be deciding whether to cut its losses.
Amazon execs are reportedly frustrated with the reaction in New York compared to the warm welcome in Virginia and in Nashville, where Amazon announced a smaller new operations center. Bezos himself is certainly tired of controversy at the moment.