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Amazon backing out of plans to build HQ2 in New York

Graffiti painted on a sidewalk by someone opposed to the location of an Amazon headquarters in the Long Island City neighborhood in the Queens borough of New York, Friday, Nov. 16, 2018. (AP Photo/Mark Lennihan)

Seattle-based Amazon is back tracking on its plans to build a second headquarters in New York as previously planned. There will now be no HQ2 location in the Big Apple.

“This is a shocker in many ways,” said GeekWire’s Todd Bishop. “In the face of some pretty normal political opposition – and that could be debated – if you go into a place like New York, you are going to expect folks to raise some questions. And to immediately fold your hands and walk out of the game, it’s a bit of a shocker.”

The New York Times reports that Amazon is not placing a second headquarters in New York’s Long Island City, citing difficult relationships with state and local politicians.

The online shopping giant will not reopen its HQ2 search to find a replacement for New York. It will instead focus on its new locations in National Landing in Arlington, Virginia, and in Nashville.

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Amazon released a statement to The Times, which states that it is grateful to some local leaders — such as Governor Andrew Cuomo, and Mayor Bill de Blasio. Part of that statement reads:

After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. 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. 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.

….We do not intend to re-open the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.

Read the full statement at The New York Times.

Amazon ran an extensive search for a second headquarters outside of Seattle. It even spurred Western Washington cities and counties to come up with their own package to keep the business growing locally. But the online retailer eventually settled on splitting HQ2 between New York and National Landing in Arlington, Virginia — placing 25,000 employees in each location. When Amazon announced its decision in November 2018, it also announced that it was opening an operations center in Nashville with more than 5,000 employees.

The New York location came with about $3 billion in state and city tax incentives — much more generous than Arlington’s HQ2 offer. Bishop notes that difference partially created a backlash in New York. Still, he says that the company has a fairly positive public image. He doesn’t know of the poll that Amazon cites in its statement, but he wouldn’t be surprised if the 70 percent support statistic is accurate.

“Certainly, Amazon has a reputation in Seattle, and people in Seattle view the company much differently than folks outside in the rest of the world,” he said. “I don’t think that 70 percent figure is out of line. I think most people have a positive perception of Amazon, despite what folks in the tech industry, or folks sitting on Mercer at 5 o’clock, may think of the company.”

A relationship with Amazon

Another factor to consider was opposition from political leaders that Amazon notes.

“Certainly, in New York, State Senator Michael Gianaris has been very vocal in his opposition to Amazon’s HQ2 plan,” Bishop said. “He was recently named to an oversight board that has the authority, or at least the influence, to essentially end the deal. In that way, what Amazon is saying is accurate. That said, they had so much support from Governor Cuomo and Mayor de Blasio that you wonder — if they stuck with it, could they have made it work?”

It was previously rumored that Amazon was rethinking its New York plans, following tensions with local leaders. That is a phenomenon the company is familiar with in its hometown of Seattle. In December 2017, local leaders asked to meet with Amazon officials to “hit the refresh button” on their relationship. But Amazon has, at times, called the rhetoric coming from Seattle City Hall “hostile.”

“I think this also has to raise questions about their future in Seattle,” Bishop said. “Will they now try to grow here more than they would have otherwise? Obviously, they face very similar opposition here on the city council.”

Upon hearing the news that Amazon is abandoning its plans for New York, Seattle City Councilmember Kshama Sawant tweeted a congratulations to New York for fighting Amazon. She noted that Seattle had a head tax aimed at the large local company, but the council nixed that tax. “Shame on Seattle’s politicians” Sawant said Thursday.

Sawant also tweeted that Governor Cuomo and Mayor de Blasio are both Democrats who were in favor of Amazon coming to New York. She points out that Amazon thanked them for their efforts.

“Badge of honor as a socialist elected representative of working people: Never being thanked by the billionaire class,” she said.

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