Amazon cancels plan to build headquarters in Long Island City

Amazon had planned to build a headquarters in Long Island City. Photo Credit: FOX Nation

Amazon canceled its plan to build a new headquarters in Queens Thursday after getting pushback from local elected officials who criticized the tax incentives authorized for the massive tech retailer.

The company was poised to receive at least $2.8 billion in incentives from the state and city for building a $2.5 billion, 4-million-square-foot campus in Long Island City. The headquarters would have housed at least 25,000 employees over the next decade.

But local politicians who were left out of the negotiations argued that Amazon did not need the incentives, that its position on unions clashed with the city’s values and that the hub would buoy the cost of living beyond what locals could afford.

"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," Amazon said in a blog post. "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."

The company said it would continue to expand its pool of 5,000 employees in the city, but did not respond to inquiries about its growth trajectory.

Both Gov. Andrew Cuomo and Mayor Bill de Blasio, whose administrations vied against several municipalities to secure the Amazon campus, have spent months heralding the roughly $27.5 billion in new tax revenue they expected to recoup from the deal over the next 25 years.

Their stances diverged after Amazon announced it was abandoning its plans. Cuomo blamed the State Senate, which recently flipped into the control of the Democratic Party, for a lost economic opportunity. De Blasio suggested Amazon blundered, a nod to the Queens legislators who argued the company was not collaborating enough with their communities or adopting appropriate approaches to local retail and warehouse unions.

Amazon’s retreat may inspire activists across the country to organize against tax incentives, which State Sen. Michael Gianaris said was fueling the rise of corporations that are now tantamount to robber barons.

"The news for Amazon is that they’re not bigger than New York City — at least not yet," said Gianaris, who represents northwest Queens. "Here’s a company that has concentrated so much power that they think they can dictate to states and cities what they’re allowed to tell their people; how much money of theirs they want to take to grace us with their presence — and without any consideration of the communities that their presence would affect."

Cuomo argued Amazon would have helped diversify an economy that has overly relied on Wall Street and the real estate industry, while directing revenue toward transit improvements and other needs.

"A small group [of] politicians put their own narrow political interests above their community — which poll after poll showed overwhelmingly supported bringing Amazon to Long Island City — the state’s economic future and the best interests of the people of this state," Cuomo said in a statement. "The New York State Senate has done tremendous damage. They should be held accountable for this lost economic opportunity."

A poll conducted by Siena College Research Institute earlier this month found that 56 percent of 778 New York State residents surveyed supported Amazon’s plans, compared to 36 percent who disapproved.

Amazon’s campus would have cultivated a much more lucrative tech sector, according to Andrew Rasiej, founder and CEO of Civic Hall, a nonprofit focused on the civically engaged technology community.

"They aren’t killing just Amazon jobs — they are killing the other jobs that would have come with Amazon," Rasiej said. "The collateral effects of Amazon may [have been] greater than just Amazon itself."

Tech: NYC executive director Julie Samuels said the retailer’s decision to back out was "no doubt" a blow to the city as well as the tens of thousands of people who could have gained employment with the company.

"New York City is today one of the most dynamic tech hubs in the world, but there is no guarantee we will maintain this status in the future, which makes this news so disappointing," Samuels said. "It’s especially disappointing given the overwhelming local support for the deal and there can be no doubt that bad politics got in the way of good policy here."

Jonathan Bowles, who has long helmed the Center for an Urban Future think tank focused on economic mobility, said he could not recall the demise of such a marquee economic development project. Although he noted he is not generally supportive of subsidies, Bowles said the Amazon package was at least aimed at bringing in new jobs, not retaining those a company was threatening to relocate, as he said has been more common in city history.

"To throw away the chance for 25,000 good-paying jobs and to snag one of the largest players in the industry that’s growing the fastest just seems so shortsighted and, frankly, irresponsible," Bowles said. "The level of rancor by not just activists, but by elected officials, towards a company that could put its jobs anywhere it wants was very irresponsible to me."

Savanna previously announced it had entered into a letter of intent to lease about 1,000,000 square feet of office space in its One Court Square tower to Amazon, but declined to comment about the prospects of that arrangement through its spokesman, Eric Waters.

The mayor said his office was putting Amazon behind it and moving forward.

"They chose New York City. We were keeping the agreement. Guess what? Some community activists wanted to see something else. They wanted changes. Or they had differences. That’s part of life. And instead of an actual dialogue to try and resolve those issues, we get a call this morning saying, ‘We’re taking our ball, and we’re going home.’ I’ve never seen anything like it," de Blasio said at Harvard University’s Kennedy School in Massachusetts Thursday evening.

A chorus of local legislators were quick to take issue with Amazon’s attitude toward local affairs, including City Council Speaker Corey Johnson, Councilman Jimmy Van Bramer and State Sen. Jessica Ramos.

Johnson said he hopes the company’s departure kick-starts a larger conversation about how the city and state spends New Yorkers’ tax dollars.

"I look forward to working with companies that understand that if you’re willing to engage with New Yorkers and work through challenging issues New York City is the world’s best place to do business," Johnson said in a statement.

Since the campus was announced in November, Queens leaders said they had heard from constituents who were concerned they would not have sufficient say in guiding the project or ensuring enough investments in the local infrastructure coincided with it.

By the time of the Council held hearings on the matter in December and January, lawmakers were questioning Amazon executives about practices groused about by the Retail, Wholesale and Department Store Union and Teamsters Joint Council 16.

Both organizations issued statements saying Amazon was not taking a respectful approach to the campus slated for the area west of Vernon Boulevard between 44th Road and 46th Avenue.

Frank Wu, president of the nearby Court Square Civic Association, said it may be harder to convince the government to invest in Long Island City’s streets, public spaces and other needs, now that Amazon is not in the picture.

"It’s a lost opportunity," Wu said. "Long Island City and Queens has long been neglected."

That sentiment was not shared by the Justice for All Coalition, which represents low-income and public housing residents in northwest Queens, according to its chairperson Sylvia White.

"It’s a job well done for our communities. It was shady, and we were not getting our needs met," White said.

Paula Kirby, Tony Pfohl and Matthew Quigley, managing directors of Plaxall, which owns part of the property where Amazon was slated to build its hub, issued a statement that did not directly respond to questions about their plans for the site. It previously had collaborated with the city on a proposal to bring mixed-income housing to that location.

"We’re extremely disappointed by this decision," the Plaxall executives’ statement said.

Jane Meyer, a spokeswoman for de Blasio, said the administration will assess its next steps in the coming weeks and months.

Amazon said it would not reopen its HQ2 search but will proceed with building a campus in Northern Virginia.

With Vincent Barone, Lauren Cook, Sarina Trangle and Newsday