Amazon might pull out of LIC campus amid opposition: report

Tech giant reportedly exploring alternatives, as it has yet to lease or purchase space in the Queens neighborhood

Amazon is considering backing out of a deal for a new campus in Long Island City (Credit: Getty Images and iStock)
Amazon is considering backing out of a deal for a new campus in Long Island City (Credit: Getty Images and iStock)

Amazon is considering pulling out of a deal for a new campus in Long Island City, which is set to bring 25,000 jobs to New York and put the area’s real estate market into overdrive, but was heavily criticized as a giveaway to the tech giant because of its billions in tax breaks.

Since Amazon is yet to lease or purchase office space for the project, it would be able to withdraw, the Washington Post reported, citing two sources familiar with the company’s thinking.

Amazon executives have had internal discussions to reassess the New York plan and explore alternatives, the report said. While Virginia officials quickly passed an incentive package for the company’s plans there, final approval from New York isn’t expected until 2020.

“The question is whether it’s worth it if the politicians in New York don’t want the project, especially with how people in Virginia and Nashville have been so welcoming,” a person familiar with the deliberations told the Post.

Amazon’s decision to come to Long Island City sparked a frenzy in the area’s real estate market. Industry players said the move could turn the neighborhood into a company town and boost residential and commercial activity. If the e-commerce giant were to allocate 100 square feet per employee — a rough industry standard for densely populated tech companies — that amounts to 2.5 million square feet of office space. That figure represents nearly a fifth of the 13.7 million square feet of current office inventory in the area, according to Newmark Knight Frank.

Anti-Amazon protestors rally At NYC City Hall against Queens second headquarters (Credit: Getty Images)

The announcement also led to greater condo demand in the neighborhood, creating buyer urgency to find deals before prices climb further. Brokerages, including Modern Spaces, Halstead and Stribling, all reported higher levels of showings and contracts following the news. With LIC slated for a new wave of residential projects, Amazon’s move was seen as a way to boost absorption — and possibly help push more developers toward condominium projects in the rental-heavy neighborhood.

A spokesperson for Amazon declined to address the possibility of the company backing out, but told the Post that the company was “working hard to demonstrate what kind of neighbor we will be.”

A New York Times report, published later Friday afternoon, stated that the Washington Post’s two sources said the publication “had gone too far” and that Amazon “had no plans to back out.”

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There is no official withdrawal plan, but it’s possible Amazon may try to use the threat of losing the headquarters to put pressure on local politicians, the report said.

While Gov. Andrew Cuomo and Mayor Bill de Blasio touted Amazon’s plan as a way to boost the economy and add jobs to the city, some local politicians and activists have criticized the move.

As part of the bidding process, the state’s Empire State Development and the city’s Economic Development Corporation offered up to $3 billion in tax breaks and a dozen sites in the state. Amazon is also eligible for up to $1.3 billion in subsidies from two city programs.

Democratic freshman U.S. Rep. Alexandria Ocasio-Cortez, whose district borders the proposed Amazon site, has rallied against the tax breaks for the project. This month, the New York State Senate appointed a vocal critic, Sen. Michael Gianaris, to a key board that could veto Amazon’s plan. Gianaris will be among three voting members of the Public Authorities Control Board — and any voting member has the power to block projects that come before it.

Assemblymember Catherine Nolan, who represents the 37th district in Queens, is one of a few local politicians who has come out in support of Amazon’s plans. But at a crowded Queens Community Board 2 meeting last night, residents and activists voiced further opposition.

Raquel Namuche, from the Ridegwood Tenants Union, called Nolan out.

“We’re saying to our local Assembly Member: you have to change your stance on Amazon. You can’t stand with multi-million dollar corporations and not stand with us,” Namuche said, “You must stand for affordable housing. You must stand for unionizing. You must stand for workers.” [WaPo] — Meenal Vamburkar and Decca Muldowney 

Updated: This story has been updated to include information from a later New York Times report.