In Surprise Move, Amazon Opts to Scrap HQ2 Plans in NYC

Amazon has decided to cancel plans to develop a new campus in New York’s Long Island City, taking with it the promise of 25,000 new jobs and $2.5 billion in investment. In recent weeks, a debate has heated up between government officials who supported the e-commerce leader’s plans and New York politicians, activists and labor union leaders who have criticized a lack of transparency regarding deal specifics and questioned the necessity to provide Amazon with tax incentives worth billions. Despite the debate, the news still came as a surprise to many, especially real estate developers and renters who were rushing to the Long Island City neighborhood.

Amazon explained that scrapping its New York plans would not impact moving forward with a new campus in Northern Virginia, also expected to lead to 25,000 jobs. The company will also move forward with its Nashville facility plans, and noted that it would continue hiring across its 17 existing offices and hubs throughout North America.

“Amazon’s retreat was a blow to Gov. Andrew M. Cuomo and Mayor Bill de Blasio, damaging their effort to further diversify the city’s economy by making it an inviting location for the technology industry,” reports The New York Times. “The agreement to lure Amazon to Long Island City, Queens, had stirred intense debate in New York about the use of public subsidies to entice wealthy companies, the rising cost of living in gentrifying neighborhoods, and the city’s very identity.”

Amazon reportedly made its decision based on the belief that the local backlash was showing no signs of subsiding and could tarnish the company’s image. One official said Mayor de Blasio attempted to contact Amazon chief Jeff Bezos, but Bezos did not speak with him or Cuomo. The governor and mayor were informed Thursday morning of Amazon’s decision to pull out, shortly before the news was made public.

“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,” explained Amazon in a statement.

“The company’s decision was at least a short-term win for insurgent progressive politicians led by Representative Alexandria Ocasio-Cortez, whose upset victory last year occurred in the western corner of Queens where Amazon had planned its site,” notes NYT. “Her race galvanized the party’s left flank, which mobilized against the deal, helped swing New York’s Legislature into Democratic hands, and struck fear in the hearts of some local politicians.”

Opposition to the deal also included New York State Senator Michael Gianaris, who “was recently nominated for a seat on a state board that would vote on part of the $3 billion incentive and subsidy plan,” explains Recode. “The appointment of Gianaris — which still needed to be approved by New York Governor Andrew Cuomo, who courted Amazon along with Mayor Bill de Blasio — was an important flashpoint on the path to Amazon’s ultimate decision, according to a source, but not the deciding factor.”