Story updated 2-15-19 (9:05 am pst): Amazon has officially killed the New York City HQ plan.
Last November, Amazon announced that it was splitting the location of its second headquarters between Crystal City, Virginia and Long Island City, New York. However, a backlash might have the eCommerce giant reexamining its decision. Although no plans are in motion to move away from New York, Amazon still has a relatively easy way out.
Resistance in Long Island City
Local opposition over Amazon’s proposed 25,000-employee Queens office has caused the company to rethink its recent HQ2 decision. Both activist groups and politicians have been outspoken against a deal that would bring Amazon to a crowded neighborhood that is rapidly gentrifying. Much of the negative intensity centers around the substantial tax breaks the company would receive if it did carry out its Long Island City plans.
Amazon still hasn’t purchased or leased any office space in New York, instead planning to expand through an existing satellite location. The city isn’t expected to make final approval of Amazon’s move until 2020 at the earliest, leaving open an exit strategy for the company.
New York state leaders, such as U.S. Representative Alexandria Ocasio-Cortez, have come out against the deal and Senator Michael Gianaris has acknowledged that he does have the power to veto, so long as his confirmation is approved. Although HQ2 would bring tens of thousands of high-paying jobs to the area, many believe Amazon is getting way too much from the state.
The Bidding War
Amazon first announced that it was planning to open a second headquarters in the U.S. back in 2017. The company promised 50,000 total jobs and over $5 billion in construction investments. In return, Amazon expected proposals that included major benefits, such as tax reductions and relocation grants. Overall, over 230 competitive proposals were submitted by the deadline.
Ultimately, Amazon cited existing operations as its motive for splitting HQ2 between Crystal City and Long Island City. One analysis conducted by a corporate subsidies tracker calculated that the company is expected to realize $4.6 billion in government aid after everything is said and done.
A Tale of Two Cities
Since the November HQ2 announcement, New York and Crystal City have responded in very different ways. Virginia legislators supposedly spent less than ten minutes discussing a $750 million dollar incentive package for Amazon. The state seems to have embraced the decision and is welcoming Amazon with open arms.
It’s not clear whether or not the online retailer is serious about rethinking the New York location. The company could surely still solicit another attraction option, but appears to be investing in building relationships with those in Long Island City and preparing for an inevitable move.
“We’re focused on engaging with our new neighbors—small business owners, educators, and community leaders,” said an Amazon spokesperson. “[W]e are working hard to demonstrate what kind of neighbor we will be.”