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Amazon pullout from Queens turned out OK for LI

Activists gather at City Hall in January 2019

Activists gather at City Hall in January 2019 to protest Amazon's HQ2 plan and the New York City tax breaks that would have given the company nearly $3 billion in aid. Credit: Charles Eckert

When Amazon canceled plans for a second headquarters in Queens a year ago Friday, Long Island business leaders predicted the worst.

They feared the tech giant's Valentine's Day pullout in the face of fierce opposition from some elected officials and residents sent the message that New York was "closed for business."

Losing the $2.5 billion Long Island City project, which was expected to produce $27.5 billion in tax revenue over 25 years and bring up to 25,000 high-paying jobs to the region, would undermine efforts to attract and retain businesses, they said.

This week, economic development and business leaders said they still consider the loss a major missed opportunity, but the reality has not been as bad as they feared.

“The loss of this project made attracting businesses to the Empire State more difficult initially, but, in spite of those headwinds, we have redoubled our efforts to grow New York’s tech economy and over the last year we’ve made great strides,” Jack Sterne, a spokesman for Empire State Development, the state’s primary business aid agency, said in a statement.

Thomas Stringer, a Bay Shore resident who helps large companies decide where to locate facilities as head of site selection services at BDO USA in Manhattan, said “there’s no question this ... [was] a loss for New York and a loss for Long Island in particular.” Given the Island’s economic ties to the city, the project “really would’ve benefited Long Island,” he said.

Stringer didn't cite any businesses that left the region or decided not to locate here because of Amazon's move. Instead, it’s an issue of “what could have been,” he said.

In November 2018, Seattle-based Amazon announced it had cut a deal with Gov. Andrew M. Cuomo and Mayor Bill de Blasio to bring a second headquarters to the city but was quickly met with opposition from activists and some elected officials, including New York State Sen. Michael Gianaris and U.S. Rep. Alexandria Ocasio-Cortez, who objected to the nearly $3 billion in tax breaks the state was positioned to offer.

In recent months, two much smaller Amazon projects for the region have been in the news. In September, the company said it would move more than 1,500 employees from its consumer and advertising teams to leased offices on Manhattan's West Side. Amazon already has more than 3,500 employees in other New York offices. And in January, local officials said Amazon plans to open a third Long Island warehouse on the site of a former Waldbaum's in Carle Place.

Since abandoning the massive New York HQ2 project, Amazon has continued work on its twin HQ2 project in Crystal City, Virginia, where the company has created around 400 jobs out of an eventual 25,000, according to news reports. The project has been pointed out as a major driver of housing and rental price increases in and around the Washington, D.C., suburb.

For Long Island, “it will always be a case of `what coulda been, what mighta been,’ ” said Kyle Strober, executive director of the Association for a Better Long Island, a developer lobbying group. “Amazon’s New York presence today is a fraction of what it could have been, and so the economic and job benefits are similarly incremental.”

Kevin Law, president and chief executive of the Long Island Association business group, derided the actions of city officials who criticized the Amazon project, but pointed to local economic development projects that have softened the blow of Amazon’s pullout.

“While chasing away Amazon was the most stupid action I have ever seen some of our elected officials take … our region is now reaping the benefits of other important projects,” Law said.

He cited projects such as the construction of the new Belmont arena and the Nassau and Ronkonkoma hubs, and the multibillion-dollar federal investment for Brookhaven National Lab’s electron-ion collider.

“There’s no question that Amazon’s decision to withdraw was a punch in the gut to New York and the region,” said Richard Kessel, chairman of the Nassau County Industrial Development Agency. Kessel said the IDA was working on plans to award tax breaks for housing projects in western Nassau within an easy commute of Long Island City, though after the collapse of HQ2, those plans “fell off the drawing board.”

Still, he said, since Amazon passed on the project, the IDA has tackled business retention and growth projects with renewed vigor. One of the major takeaways from the loss of Amazon is the importance of working with local community and elected officials, especially "when a large, potentially controversial project is coming to the county," Kessel said. 

“New York is tough, and I think while it certainly wasn’t helpful to us and what we’re trying to do in terms of attracting new businesses, I think it wasn’t as disastrous as it could have been,” he said.

Citing productive talks the IDA has had with Amazon over the planned Carle Place distribution center, Kessel said “the welcome sign is up in Nassau County for Amazon or any other business that wants to do business here.”

Law said that one year after Amazon's departure, it's difficult to "feel the loss of something that you never had."

Record low unemployment rates in the region, a strong real estate market, growing 401ks and the overall healthy economy have helped to stave off any negative effects of Amazon's departure, he said. But given the cyclical nature of economic conditions, eventually, regret will set in, Law said. 

“Those things sort of mask the impacts of the terrible decision of chasing Amazon away," he said. "But when the next economic cycle happens … then I think people are going to begin to miss what might have been.”

Then and now

What LI officials said when Amazon pulled out on Feb. 14, 2019, and what they're saying now:

Then: “New York should be ashamed of itself. ... You cannot counter what happened today with ads. ... This will last for 20 years.”

Now: “There’s no question this ... [was] a loss for New York and a loss for Long Island in particular.”

— Thomas Stringer, head of site selection services at BDO USA in Manhattan

Then: "This retreat will have an enormous rippling effect, sending a strong signal to all Fortune 500 companies that New York State is closed for business."

Now: “It will always be a case of `what coulda been, what mighta been.' ... Amazon’s New York presence today is a fraction of what it could have been, and so the economic and job benefits are similarly incremental.”

— Kyle Strober, executive director of the Association for a Better Long Island, a developer lobbying group

Then: "What this project would have brought to Nassau County is extraordinary. . . "This is a big 'no' to businesses. It's going to be a challenge going forward."

Now: “While it certainly wasn’t helpful to us and what we’re trying to do in terms of attracting new businesses, I think it wasn’t as disastrous as it could have been.”

— Richard Kessel, executive director of the Nassau County Industrial Development Agency

Then: “We believe our region was tarnished because Long Island City has ‘Long Island’ in its name. ... There is a negative perception that we don’t support development, and that is not true.”

Now: “While chasing away Amazon was the most stupid action I have ever seen some of our elected officials take … our region is now reaping the benefits of other important projects,” including construction of the new Belmont arena and Nassau and Ronkonkoma hubs, and the multibillion-dollar federal investment in Brookhaven National Lab’s electron-ion collider.

— Kevin Law, president and chief executive of the Long Island Association business group

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