by Samra Anees
People have anticipated Amazon’s new campus opening in Long Island City, New York for months, but on February 14th, Amazon pulled out of the plan due to concerns that some politicians would be uncooperative of their vision with the project. This blog explores why Amazon pulled out of its deal with New York.
Amazon’s Abandoned NY Headquarters Causes Ripples
Amazon’s new HQ2 was going to open in Long Island City and had plans of creating 25,000 jobs and boost local economies. They planned to lease most of a 1.4 million square foot office formerly leased by Citigroup Inc.
Amazon’s pullout will undoubtedly cause a ripple effect. Before this announcement, people and developers were flooding to Long Island City and scooping up real estate to be near the promised new campus. The pullout leaves a million square feet of space vacant and 25,000 less jobs than promised, and could also potentially hurt developers with plans to create new buildings as a response to said 25,000 new employees. Queens saw a rise in their residential market due to Amazon’s plans, but started falling again as opposition to the plan rose. The plan also estimated $30 billion in tax revenue that would go towards aiding New York housing, schools and transit system.
A Sudden Exit Based on Political Opposition
The political debate around Amazon’s New York headquarters surrounded the use of public subsidies going towards a tech giant, which would ultimately result in a rise in cost of living and in turn, affect the diversity of New York. Although polls showed that most of New York had positive sentiment about Amazon’s plan to open in headquarters in New York, and the mayor and governors’ offices in New York had assured Amazon that the plan would go through regardless of the criticism, in the end it took only a little bit of resistance from a few lawmakers for Amazon to pull out of the deal. This unexpected pullout paints Amazon in a poor light, showing inflexibility and the lack of cooperation on Amazon’s part.
Amazon in Northern Virginia is Still a Go
Amazon’s New York campus was going to be one of two headquarter campuses outside of Seattle, and Amazon still has plans to open their northern Virginia campus. The incentives that Virginia is offering only amounted to $750 million, with $550 million in grants for the first 25,000 jobs and $200 million for creating 12,850 jobs in later years. Virginia is touting the fact that it did a better job in the initial planning to bring Amazon to its state. As of now, everything appears to be on track for Amazon’s northern Virginia campus.
Bottom Line
In conclusion, Amazon had the power and the option to see this deal through in New York, but ultimately chose not to move forward after receiving some resistance from a few politicians. They claimed they could not move forward with their plans in New York without the positive support from New York lawmakers—but they already had significant support from the state. If Amazon would just have had “tougher skin,” they would have succeeded in their plans to boost local economies and create thousands of jobs—but instead, their last-minute decision created negative sentiment, hurting their chances for a future in New York.