City, State Officials Differ on Reasons Why Amazon Abandoned NYC for HQ2

John Jordan | February 2019

NEW YORK—If a post mortem were to be done on the failed Amazon HQ2 deal in Long Island City, Queens, the cause of death for the $4-billion deal that was to bring in excess of 25,000 high-paying jobs to the region would no doubt be from multiple causes.

The reactions from the governor of New York, the mayor of New York City and others affixed blame on project opponents, the lack of transparency in the process, excessive incentives valued at $3 billion and even the lack of toughness by Amazon itself.

Some municipal officials decried the lost opportunity of the Amazon HQ2 project that is no longer being developed in Queens for Westchester and the Hudson Valley region, while other locations, including Rockland County and Mount Vernon for example, are pitching Amazon to reconsider their respective locations now that Long Island City has been eliminated.

On Feb. 14, despite efforts from New York Gov. Andrew Cuomo, New York City Mayor Bill de Blasio to deflect mounting criticism of the project, Amazon announced it decided not to move forward with previously announced plans to build a portion of its second corporate headquarters in Long Island City, Queens.

The e-commerce giant in its statement, while praising Cuomo and de Blasio, cited the vocal opposition by some political and civic leaders as the reason for its decision.

“After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens,” Amazon noted in its statement. “For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, 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 with the project we and many others envisioned in Long Island City.”

Critics of the Amazon project complained about the potential adverse traffic and environmental impacts from the project and also charged that the combined $3 billion in state and city incentives to lure Amazon to New York City were too large.

Gov. Cuomo said the Amazon investment in Queens would have diversified New York City’s economy away from Wall Street and real estate and would have benefitted a wide region from Long Island to Albany.

In fact, the governor blamed the leadership of the Democratic-controlled State Senate for Amazon’s decision and specifically “a small group politicians (who) put their own narrow political interests above their community—which poll after poll showed overwhelmingly supported bringing Amazon to Long Island City— the state’s economic future and the best interests of the people of this state. The New York State Senate has done tremendous damage. They should be held accountable for this lost economic opportunity,” the governor stated.

New York State Senate Majority Leader Andrea Stewart-Cousins had a much different take on the root cause for the project’s demise. “It is unfortunate that rather than engage in productive discussions about a major development, Amazon has decided to leave New York,” she said. “This process was clearly flawed and did not include the affected community nor their legislative representatives until after the deal was signed. This was not the same process that was followed in other areas including Virginia and that is clearly why this deal failed.”

In the case of New York City Mayor Bill de Blasio, who was a strong supporter of the Amazon HQ2 project, seemed to put part of the blame on Amazon itself. “You have to be tough to make it in New York City,” the mayor said, “We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world. Instead of working with the community, Amazon threw away that opportunity. We have the best talent in the world and every day we are growing a stronger and fairer economy for everyone. If Amazon can’t recognize what that’s worth, its competitors will.”

It should be noted that Amazon employs more than 5,000 workers in Brooklyn, Manhattan and Staten Island. The company in its statement on the HQ2 project, said that despite its decision, it plans to continue growing its New York City-based teams.

Others who chimed in on the failed Amazon deal included the Long Island City Partnership, which said in a statement, “The departure of Amazon’s HQ2 is a tremendous disappointment and blow to Long Island City residents, businesses, non-profits and more, who were eager to seize on the opportunities created by the largest economic development project in New York’s history.”

The partnership stated that LIC’s selection has given the area global recognition for being attractive to technology, life sciences and other growth sectors, as well as its diverse amenities that include its live-work culture.

“Before Amazon’s announcements, the Long Island City Partnership was advocating for investments to our infrastructure, workforce development, schools and mass transit, and we will continue to do so,” the partnership stated.

John Jordan
Editor, Real Estate In-Depth