Update (Thursday, Feb. 14): Amazon, bowing to local opposition, is backing out of a planned East coast headquarters in the Long Island City section of Queens, NY.
Opponents of the $3 billion in tax breaks and incentives gained more fuel when it was learned Amazon will pay no federal income tax for the second year in a row. Plans remain on track for a headquarters complex in Arlington, VA and an R&D facility in Nashville, TN.
The company said in a statement it does not plan to reopen the search for a second headquarters, instead proceeding with plans for an East coast headquarters in Alexandria, VA and an R&D facility in Nashville, TN, while hiring at seven corporate offices and tech hubs in the U.S. and Canada.
“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 the statement. “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 it was disappointed in the outcome, but will keep existing businesses in the area. “There are currently over 5,000 Amazon employees in Brooklyn, Manhattan and Staten Island, and we plan to continue growing these teams,” the company said.
The New York Times reported that New York Gov. Andrew Cuomo and New York Mayor Bill de Blasio met on Monday in Albany to try to salvage deal. After the meeting, de Blasio spoke to a senior Amazon executive and was told the company remained committed to coming to New York. The mayor was in the process of connecting with Amazon CEO Jeff Bezos but it’s unclear if they did before the decision was made.
“We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world,’’ de Blasio told the Times. “Instead of working with the community, Amazon threw away that opportunity. We have the best talent in the world and every day we are growing a stronger and fairer economy for everyone. If Amazon can’t recognize what that’s worth, its competitors will.”
Feb. 8 – Metro New York may not be getting a new Amazon headquarters after all, as it’s reported the company is reconsidering its Long Island City location after waves of backlash from residents, unions and local politicians, according to CNN.
CNN said Amazon executives have been considering other alternatives and rethinking the company’s plans.
“There have been rumblings about this just in the last couple of days,” Carlo Scissura, president and CEO, New York Building Congress, told CNN Business on Friday. “People are starting to say this is what we’re hearing, people are getting worried.”
According to CNN, protestors took to the streets in Long Island City, criticizing the deal as being bad for taxpayers and the neighborhood. Earlier this week, New York State Senator Michael Gianaris of Queens, a vocal critic of the new headquarters, was recommended to serve on the Public Authorities Control Board that has to approve the deal.
In November, Amazon announced awards of two new East Coast headquarters, one each in Long Island City and Arlington, VA., with plans to invest $5 billion and create more than 50,000 jobs. This ended a 14-month process that had 240 cities across the country selling themselves and offering huge incentives.
Amazon is also creating an Operations Center of Excellence in Nashville, focused on improvements and innovation in customer fulfillment, transportation, supply chain and related functions, which will create an additional 5,000 jobs. The company will invest another $230 million in Nashville, creating a 1 million square foot facility. Both the Arlington and Nashville plans were welcomed with open arms.
Not everyone was thrilled, however. The Verge reported the size of the subsidies – a $1.2 billion tax credit tied to job creation and a $325 million cash grant in New York, and a $573 million cash grant in Arlington, also tied to jobs – had some observers complaining that Amazon was “playing” smaller entrants to realize a bigger payday.
CNBC reported that Amazon has yet to build or lease space in the New York neighborhood and isn’t expected to receive full approval from local governments until 2020, making a pullout easier to manage.
“We’re focused on engaging with our new neighbors – small business owners, educators and community leaders,” an Amazon spokesperson said in a statement to CNBC. “Whether it’s building a pipeline of local jobs through workforce training or funding computer science classes for thousands of New York City students, we are working hard to demonstrate what kind of neighbor we will be.”
New York City Gov. Andrew Cuomo addressed the deal with Amazon in the wake of the pullout rumors, saying, “We have to make Amazon a reality.”
“For the state senate to oppose Amazon was governmental malpractice,” Cuomo said according to CNBC. “And if they stop Amazon from coming to New York, they’re going to have the people of New York state to explain it to. It is irresponsible to allow political opposition to overcome sound government policy. You’re not there to play politics. You’re there to do what’s right for the people of New York, and what they did here was wrong.”