Amazon’s New York Headquarters Hits Surprise Roadblock

Amazon Web Services

Political opposition to the company’s plans for a second heaquarters in Queens unexpectedly gains ground over ‘secretive’ £2.3bn deal

Opposition to Amazon’s construction of a second headquarters in Queens, New York City, has unexpectedly gained momentum with the appointment of one of its most vocal critics to a key post.

Michael Gianaris, the Democratic Senator who represents the Long Island City, Queens district where Amazon is set to build its second headquarters, 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, which must be approved, would give Gianaris veto power over the deal, which he says he opposes because of the $3 billion (£2.3bn) in state and city tax incentives it would give Amazon.

Gianaris believes New York State “cut a secretive deal that’s bad for New York”, he told the Financial Times.

New York State Senator Michael Gianaris. Image credit: New York State Senate

$3bn in tax breaks

The company has promised to create 25,000 well-paid jobs over 10 years.

But 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 argues that, like other major tech companies, Amazon chose New York because of its pool of technical talent, and not due to the tax breaks, which “which I didn’t think they needed”, he recently told the New York Times.

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

He is calling for the deal to be scrapped and for negotiations to begin again from scratch.

Meanwhile, Amazon has indicated it is having second thoughts about the deal due to the unexpected hostility from Queens residents.

Second thoughts

The company is particularly concerned about demands to allow its New York workers to unionise, according to an unnamed person familiar with the situation cited by the FT.

For the moment, the company is hoping to push ahead with the deal, and said a recent poll it commissioned showed 77 percent of residents in Gianaris’ district supported bringing  Amazon to the area.

Andrew Cuomo, the Democratic New York State governor who spearheaded bringing Amazon to the city, accused the deal’s opponents of “governmental malpractice” and insists it is a net win for New York.

Gianaris has said it is too early to say what kind of deal with Amazon he would support, but has called the current plans “unacceptable”.

Amazon, which chose Queens and Northern Virginia for two secondary headquarters after intensive nationwide bidding, is still in a position to pull out of New York, as it has not yet signed a formal lease for its new premises.

Nearby Newark, New Jersey, is said to have offered $7bn in tax incentives.

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