Amazon has decided to abandon its plans for its much hyped and much maligned second headquarters in New York City. The location had been chosen after a lengthy (and embarrassing at times) bidding war between cities across the country after local politicians like Governor Andrew Cuomo and NYC Mayor Bill de Blasio offered the $1 trillion company over $3 billion in economic incentives.
Amazon’s flip decision comes after increasing frustration and resistance from existing residents in the Long Island City and Brooklyn neighborhoods where the campus was supposed to be built. Many believed that the influx of tech workers from Amazon would drive rent prices higher, crowd an already at-capacity public transportation system, and lead to gentrification of the area.
Reactions to the reversal are mixed. Some see this as a David-versus-Goliath story where communities were able to rally and scare off arguably the biggest corporate monster possible; others lamented the loss of economic opportunity, particularly the 25,000 jobs that Amazon said the HQ would bring to the area.
Amazon itself blamed these small groups in its statement, stating, “[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.”
It will be interesting to watch and see what the fallout (if any) of this is for New York City. As Tech Crunch reports, it’s all a bit complicated.
According to Amazon’s announcement they will not be reopening the search for a second headquarters. Instead, they say that they will focus their efforts on expanding their existing operations in Virginia and Tennessee. They have not said whether they plan on expanding either campus by the 25k employees that NYC was supposed to offer.
Despite this proclamation, many cities are already reaching out to Amazon to try and entice investments.
Cities across America initially fell over each other, begging (I mean propositioning) Amazon to grace them with their HQ2, offering free land, massive tax breaks, bootcamps at major colleges and new schools to spinoff talent specifically for Amazon, interest-free home loans for employees, massive grants for hitting employment targets, employment relocation reimbursements, and employee tax incentives.
But two cities openly stood above the fray – Toronto basically said, “come here if you want to,” without offering incentives, while Austin said in a friendly Texas voice, “y’all come here if you want to, everyone else in tech does!”
While everyone else fawned over Amazon, it turns out that HQ2 is dead in the water, and Austin plus Toronto are likely patting themselves on the back right now.
Among all of these dizzying revelations, it’s important to note that rather than try to work out a solution with the local residents Amazon thought would be so eager to have them, the tech giant simply pulled its resources and left. One wonders whether the next city can reasonably expect to have any sort of sway in negotiations with the company at all.