Amazon Abandons All Hope of NY Deal, Moving to VA & Nashville
Jeff Bezos is not a man to be trifled with, judging by his recent actions. First, the National Enquirer threatened to publish embarrassing photos of him with his mistress, evoking his wrath via hiring investigators and legal eagles. Prompted by ongoing protests by locals as well as state and area political officials, as of February 14, the Amazon CEO and his company canceled a planned second headquarters that would have ultimately employed up to 40,000 people in Long Island City, Queens, across the East River from Manhattan, according to The New York Times.
“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,” Amazon said in a released statement on its company blog.
The New York Governor Andrew Cuomo and New York City Mayor Bill de Blasio had courted Amazon to locate the new headquarters in New York. Amazon estimated the average salaries of the immediate 25,000 employees at $150,000, boosting the area economy. Protesters complained that the city gave too large of a tax break with $3 billion in government subsidies. In addition, the influx of well-compensated workers would price many current renters out of the market. The reaction by local realtors and business owners, predictably, was shock and anger, according to a story in Bloomberg. Some commercial realtors who worked on the deal said the impact could be broader than just this one project.
Amazon’s withdrawal “sends a terrible signal to the marketplace about the ability for companies to expand in New York,” said Seth Pinsky, an executive vice president at RXR Realty to Bloomberg. “The people who are younger and don’t remember the fact that New York was not always thriving, I think don’t understand that as bad as the problems of growth are, the problems of decline are even worse.”
Amazon will instead go forward with plans for other major offices in Northern Virginia and Nashville, hiring more employees in those locations.
According to Geekwire, the company had announced its plans last November to split its 50,000-person second headquarters between Northern Virginia, just across the Potomac River from Washington D.C., and New York. Each location was expected to contain between 25,000 and 40,000 tech workers. The company also planned to open a smaller, 5,000-person office in Nashville.
“Amazon has been warmly welcomed in Northern Virginia, where officials approved $750 million in subsidies after just nine minutes of deliberation,” Geekwire reported.
Fast Company analyzed the New York HQ opposition and found that communities banded together against the subsidies and lack of tax investment into the community by Amazon, in spite of the potential for many more high-paying jobs and possible AI development.
For more insight on how the deal collapsed, read Wired.com