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Amazon drops Long Island City as one of its new headquarters locations

Kathy Wylde, president and chief executive of the Partnership for New York City, speaks Thursday at City Hall. Credit: Newsday / Matthew Chayes

ALBANY — In a stunning turnaround, Amazon announced Thursday it has canceled plans to build a corporate campus in Queens in the wake of a backlash about using tax giveaways to lure one of the world's largest companies to New York.

 "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 said on its website.

The reason, the company said, was local opposition to the project, which Amazon said would have brought 25,000 jobs.

“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," the company said shortly before noon Thursday.

Amazon said it doesn't "intend" to search for a replacement for New York. Instead, it will continue with plans to build part of its "HQ2" campus in Northern Virginia, along with a satellite in Nashville, Tennessee.

The outcome had been hinted at a week ago but still shocked most political participants with its suddenness. And it split reactions in two clear camps.

One was those who called it a debacle, a huge blow to the economy and a deterrent to luring future tech business to New York.

“Amazon’s decision to withdraw its plans for our region will go down as one of the biggest debacles in New York State history, and the elected officials who are responsible for this epic disaster should be ashamed of themselves for jeopardizing thousands of jobs and billions of dollars in tax revenue and should also consider resigning,” said Kevin Law of the Long Island Association, a business group. 

And then there were those who said Amazon arrogantly miscalculated about being able to steamroll the community and oppose a unionized workforce. Further, they said this was the day grassroots opposition finally struck a resonating blow against the practice of lavishing wealthy companies with taxpayer-funded incentives.

"Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world," tweeted Rep. Alexandria Ocasio-Cortez (D-Bronx), a critic of the deal and a national face of the political left, referring to Amazon leader Jeff Bezos.

Sen Michael Gianaris (D-Astoria), leader of the state level of the opposition, said: “I think this is indicative of why Amazon would have been a bad partner for New York. The only  thing that happened was an affected community raised its hand to question a deal that would have profoundly changed their very existence. Rather than discuss it, they picked up their ball and left, like a petulant child."

Gov. Andrew M. Cuomo, who together with New York Mayor Bill de Blasio brokered the deal to win the Amazon campus in a nationwide competition, blamed the turnabout on his fellow Democrats in the State Senate and, without specifically naming him, Gianaris.

 "A small group of politicians 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," Cuomo said. "The New York State Senate has done tremendous damage. They should be held accountable for this lost economic opportunity."

The mayor earlier this week called landing the 25,000 jobs "mission critical" to the city's economy. But when Amazon backed away, he chided them.

“You have to be tough to make it in New York City. We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world," de Blasio said. "Instead of working with the community, Amazon threw away that opportunity."

In a statement Thursday night, U.S. Sen. Chuck Schumer (D-New York) said Amazon's decision means the loss of "both an opportunity to create tens-of-thousands of jobs for people at every rung of the income ladder, and to further diversify and strengthen our economy.”

The internet giant announced in November it had chosen to build half its East Coast headquarters in Long Island City and the other half in northern Virginia, promising 25,000 jobs for each location. New York and Virginia beat out numerous other competitors.

Cuomo and de Blasio offered $3 billion in tax breaks and aid to Amazon, one of the world’s richest companies, while asserting the new corporate campus eventually would generate $27 billion in tax revenue.

But the giveaways — not revealed until after Amazon selected New York — triggered a backlash from local groups and progressive politicians, members of the City Council and Gianaris, the second-most powerful member of the State Senate and representative of the neighborhood Amazon eyed. 

Two key dates in this episode occurred in the last two weeks.

At a Jan. 31 City Council hearing, Amazon signaled it would oppose any effort to unionize workers and influential unions immediately stepped up their criticism of the company's "atrocious" labor record. The de Blasio administration promised to bring "tremendous pressure" to allow unionization.

A week later, Gianaris was nominated to an arcane but vital panel, the Public Authorities Control Board, which would vote on part of the state subsidy package, probably sometime in 2020. PACB votes have to be unanimous to OK funding — this was the requirement that killed a proposed Manhattan football stadium in 2005.

The nomination of Gianaris infuriated Amazon as well as Plaxall, the company that owned the land for the would-be Amazon site, according to Assemb. Amy Paulin (D-Scarsdale). Also a member of the PACB, Paulin said she heard complaints from Plaxall executive Jonathan Drescher, whom she described as a friend and a neighbor.

Paulin said Amazon was skittish about committing to the deal, then face the possibility of the subsidy package being killed a year from now.

"No question it would have had to come before the PACB and it wouldn't have been approved," Paulin said. "Therefore, they viewed the incentives as in jeopardy and I don't think the company wanted to go forward with that prospect."

She said she spoke to Drescher shortly after Amazon made its announcement and said he "puts the blame on the State Senate." Plaxall later issued a statement saying it was, indeed, "extremely disappointed."

In contrast, Majority Leader Andrea Stewart-Cousins, who nominated Gianaris to the PACB, blamed a secretive process that failed to include neighborhood representatives. In doing so, she took a shot at the company — and a veiled shot at Cuomo and de Blasio.

“This is proof of why it is so important to have an inclusive and transparent process from the beginning,” Stewart-Cousins (D-Yonkers) said in statement. “It is unfortunate that rather than engage in productive discussions about a major development, Amazon has decided to leave New York.”

Some applauded Gianaris and the Senate for what they saw as coming to the rescue. They noted other tech giants — especially Google — had expanded into New York without government subsidies. 

"What we, the people, did in Queens was finally draw the line in the sand," said Sen. Jessica Ramos (D-Queens), one of a handful of new, progressive Democratic senators who have pushed the Senate left. "This deal was going to set a dangerous precedent that circumvented the public review process to welcome one of the biggest corporations of our time that pays zero taxes already."

Tom Forte, a stock analyst who follows Amazon for the brokerage firm D.A. Davidson & Co. in Great Falls, Montana, isn’t sure the online retailer’s decision to abandon Queens is final. In a note to investors on Thursday, he said: “On first blush, we believe Amazon may be bluffing and posting the blog as a means to get the government back to the table, so to speak.”

With Michael Gormley, James T. Madore, Matthew Chayes and Ivan Pereira

AMAZON TIMELINE

• Nov. 13: After a year-long search, Amazon says it will locate new headquarters in Long Island City, Queens, and Crystal City, Virginia, bringing 25,000 jobs to each location.

• Nov. 14: State Sen. Michael Gianaris (D-Astoria) and Democratic New York City Councilman Jimmy Van Bramer who represents Long Island City hold a rally slamming the tech giant’s plan, saying massive tax breaks were offered without community input.

• Dec. 12 and Jan. 30: New York City Council hosts contentious public hearings on Amazon’s proposal.

• Feb. 8: The Washington Post reports Amazon is reconsidering its plan in light of community and political opposition. Gov. Andrew M. Cuomo accuses the State Senate of “governmental malpractice” for jeopardizing the deal.

• Feb. 14: Amazon says it has canceled plans to create a headquarters in Queens. – LAURA MANN

Amazon’s HQ2 was to include:

Jobs: 25,000

Average salary: $150,000-plus

Office space: 4 million square feet to start

Investment: $2.5 billion

Tax breaks: nearly $3 billion

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