Doubts cast on Amazon HQ2 plan
The web giant is rethinking its plan for a campus in New York because of local opposition, sources say.
Amazon.com Inc. is reconsidering its plan to bring 25,000 jobs to a new campus in New York City following a wave of opposition from local politicians, according to two people familiar with the company’s thinking.
The company has not leased or bought office space for the project, making it easy to withdraw its commitment. Unlike in Virginia — where elected leaders quickly passed an incentive package for a separate headquarters facility — final approval from New York state is not expected until 2020.
Tennessee officials have embraced Amazon’s plan to bring 5,000 jobs to Nashville, which this week approved $15.2 million in road, sewer and other improvements related to that project.
Amazon executives have had internal discussions recently to reassess the situation in New York and explore alternatives, said the two people, who spoke on the condition of anonymity to speak candidly about the company’s perspective.
“The question is whether it’s worth it if the politicians in New York don’t want the project, especially with how people in Virginia and Nashville have been so welcoming,” said one person.
Hailed as an economic triumph when it was announced by Gov. Andrew Cuomo and Mayor Bill de Blasio, both Democrats, the project in Queens’ Long Island City neighborhood now faces criticism from some politicians and advocacy groups appalled at the prospect of giving giant subsidies to the world’s most valuable company, led by its richest man. (Amazon founder and CEO Jeff Bezos owns the Washington Post.)
In the last two weeks, the New York Senate nominated an outspoken Amazon critic to a board where he could potentially veto the deal. City Council members for the second time aggressively challenged company executives at a hearing, where activists booed and unfurled anti-Amazon banners.
Key officials, including Rep. Alexandria OcasioCortez (D-N.Y.), whose dis-
trict borders the proposed Amazon site, have rallied against the project. And opponents went door to door to warn people in Queens of rent hikes and displacement, much as Seattle experienced during the company’s growth there.
No specific plans to abandon New York have been made. And Amazon may try to use a threat to withdraw to put pressure on New York officials. But with a meeting of the state’s Public Authorities Control Board and a third City Council hearing expected this month, Amazon executives may be reaching an inflection point, the people said.
“I think now is the time for Amazon to make a decision because it has to start hiring,” said one person.
The resistance in New York contrasts with the warm welcome Amazon has received in Virginia, where Gov. Ralph Northam, a Democrat, signed a law Tuesday authorizing up to $750 million in state subsidies for the Amazon headquarters in Arlington.
It’s unclear what Amazon may consider as a Plan B if the New York project falls through. It could forgo the incentive package and hire employees on a smaller scale, as rivals including Google are doing. Or it could seek another place to put some or all of the jobs originally slated for New York.
Amazon hired a lobbying firm and a public relations firm in New York and has advertised for a “senior community affairs manager” to “focus on developing a positive partnership with local stakeholders, community groups and nonprofits.”
Asked to comment on the possibility that the New York deal might founder, Amazon spokeswoman Jodi Seth said: “We’re focused on engaging with our new neighbors .... 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 state and city officials have played down the chances that the deal might fall through. They pointed to opinion polls showing strong public support for the project and said Cuomo and De Blasio will fight hard for it.
“The Amazon transaction was probably the greatest economic transaction in 50 years in this state,” Cuomo said in a recent radio interview. “We don’t get a business to come with 25,000 jobs anymore. I spend hours and days trying to get 100 jobs, 200 jobs.”
But the resistance is well organized and energetic, based in unions and community groups. In addition to Ocasio-Cortez, opponents include City Council Speaker Corey Johnson, Deputy Leader of the City Council James Van Bramer and state Sen. Michael Gianaris, who is deputy majority leader in the Senate.
Some officials who previously supported attracting Amazon to the city have changed their position, partly because they were unhappy the deal was structured to bypass City Council approval. Amazon is eligible for up to $1.3 billion in subsidies from two city programs, in addition to the state package and other incentives.
Critics portray the New York struggle as a national test for populist forces confronting big companies’ influence, and for the contest within the Democratic Party between its grass-roots and business-friendly wings.
The divergent reactions in New York and Virginia arise from political and economic differences between the two, according to officials and analysts.
New York is a pro-labor city, whereas Virginia is a right-to-work state where employees cannot be obliged to join a union as a condition of employment. Amazon has opposed attempts to unionize its workforce and says it would do the same in New York.
New York also is straining from the effects of rapid economic growth, whereas Arlington is eager to attract investment to offset the loss of thousands of government jobs there in a Pentagon reorganization that began in 2005.
The community around Long Island City is home to legions of grass-roots organizations that are unhappy about gentrification. Some also fault Amazon for selling facial-recognition technology to law enforcement agencies and partnering with companies that work with U.S. Immigration and Customs Enforcement.