Amazon Ditches Plans For New York HQ2

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Online giant cancels its plans to build campus in Queens, after tax break opposition and questions about unions

Amazon has cancelled plans to build one of its second headquarters in New York, after the e-commerce giant encountered unexpected opposition to its plans.

Amazon’s decision to create a second headquarters outside its Seattle home, had triggered a bidding war between various US states. Indeed, Washington DC at one stage had been widely tipped as leading the race for the location of Amazon’s second headquarters.

But in November Amazon chose Queens in New York, as well as a site in Northern Virginia for its two secondary headquarters – known collectively as HQ2.

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Queens campus

Amazon’s plan had been to invest $5 billion in the construction and operation of the two campuses, including the creation of 50,000 new jobs.

All of this attracted huge interest from various US states, which offered all types of tax incentives to lure the firm to their state.

Amazon had previously admitted that economic incentives were a factor in its decision on where to locate HQ2, but it always said that attracting top talent was the leading driver.

And it didn’t take long for Amazon’s plans for one of its HQ2 locations in the Long Island City neighbourhood in Queens, to encounter some surprise opposition.

NY opposition

This opposition was evidenced earlier this week with the appointment of one of Amazon’s most vocal critics to a key post.

Michael Gianaris, the Democratic Senator who represents the Long Island City, Queens district was last week nominated to serve on the Public Authorities Control Board, a little-known state board that must approve New York City’s deal to bring Amazon to Queens.

The appointment would given Gianaris veto power over the deal, which he has previously said he opposes because of the $3 billion (£2.3bn) in state and city tax incentives it would give Amazon.

Gianaris argues other companies, such as Google and Apple, have launched ambitious expansion projects in New York City without such substantial tax breaks, an argument recently seconded by former New York mayor Michael Bloomberg.

Gianaris has also said Amazon’s move to New York was problematic because the company opposes unionisation.

He had called for the deal to be scrapped and for negotiations to begin again from scratch.

Meanwhile, it had emerged that Amazon was having second thoughts about the deal due to the unexpected hostility from Queens residents.

The company was reportedly very concerned about demands to allow its New York workers to unionise, according to an unnamed person cited by the FT.

NY cancellation

This opposition prompted a rethink at Amazon, as it had yet to sign a formal lease for the Queens campus, and was therefore in a position to pull out of New York.

And now the firm has reportedly taken that decision, a decision revealed during a couple of phone calls.

Jay Carney, Amazon’s top policy executive, was quoted by Reuters as telling New York Governor Andrew Cuomo (who had been in favour of the Queens campus) that it would not go ahead with its plans.

Carney then told New York City Mayor Bill de Blasio the same shortly after.

The company said the decision came together only in the last 48 hours, made by its senior leadership team and Jeff Bezos, Amazon’s founder, chief executive and the richest person in the world.

Gianaris has reportedly blamed Amazon for the decision to drop New York.

“Amazon never showed willingness to look seriously at the concerns that were raised,” he said.

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Author: Tom Jowitt
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