Goodbye, NY: Amazon says it won’t come to Queens due to political opposition

In response, Sen. Gianaris says tech firm is acting "like a petulant child"

Jeff Bezos taking out the trash (Credit: iStock, Getty Images, Icon Finder, and Wikipedia)
Jeff Bezos taking out the trash (Credit: iStock, Getty Images, Icon Finder, and Wikipedia)

Leaving a $3 billion incentive package on the table, Amazon has decided against coming to New York City.

The company announced on Thursday that it won’t build a new campus in Queens. The decision follows reports last week that Amazon was reconsidering its selection of New York, amid fierce political opposition. Much of the blowback sprung from the $3 billion in state and city tax incentives offered to lure the company to Queens.

“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,” the company said in a 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.”

Amazon’s new headquarters was seen, among industry players, as a potential boon to Long Island City’s residential and commercial markets, with some speculating that it would transform the neighborhood into a company town. Long Island City flipped from a condo buyer’s market to a seller’s market overnight following Amazon’s announcement, and industry veterans predicted that the commercial markets would see higher prices and reduced vacancies.

Amazon had planned to bring 25,000 jobs to Queens over the course of a decade, which led to some concern that the new headquarters would ultimately displace current Long Island City residents.

The company’s reversal also leaves a few developers scrambling. Amazon had agreed to lease 1 million square feet of space at Savanna’s One Court Square office tower. The tech giant also tapped TF Cornerstone to develop part of its campus and planned to redevelop the northern portion of a site owned by plastics company Plaxall for its HQ2 headquarters, which would initially span 4 million square feet.

“We’re extremely disappointed by this decision,” Plaxall’s managing directors said in a statement. “Since our grandfather opened Plaxall’s doors on the waterfront seven decades ago, our family has believed in the overwhelming promise of Anable Basin and Long Island City as centers of productivity and innovation. We continue to believe that today.”

The Real Estate Board of New York also expressed dismay at Amazon’s announcement.

“It’s unfortunate that we have lost out on an opportunity to create tens of thousands of jobs for city residents and generate billions of dollars in tax revenue to fund vital services including infrastructure improvements for transportation, schools, and open space,” said president John Banks. “Nevertheless, New York City is still open for business and will retain its status as a world class center for tech and innovation.”

Much has been made about how Google is growing in Hudson Square without the tax benefits Amazon would have taken advantage of.

CBRE’s Mary Ann Tighe said the Amazon deal was unique in its transformative effect on Long Island City.

“A key point on the Amazon deal is that they elected to pioneer a neighborhood,” she said. “Google’s growth is obviously a huge blessing for the city, but they’re growing in among the most desirable neighborhoods for New York city office space.”

No replacements 

Despite the pageantry that led up to its selection of New York, Amazon indicated on Thursday that it isn’t planning to reboot a search for another location. Instead, the company will focus on its new headquarters in Northern Virginia and the new Nashville, Tennessee location.

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Before last week’s report that Amazon might pull out of New York, there was some speculation that the company’s deal would not have been approved. Sen. Michael Gianaris of Queens, a critic of the $3 billion incentive package, was named to the Public Authorities Control Board, which had veto power over the plan.

“Like a petulant child, Amazon insists on getting its way or takes its ball and leaves,” Gianaris told the New York Times on Thursday. “The only thing that happened here is that a community that was going to be profoundly affected by their presence started asking questions.”

Last week, without issue, Virginia officials approved granting Amazon up to $750 million in incentives for its new headquarters in the Crystal City area.

In its statement, Amazon blamed the attitude of local officials but commended both Mayor Bill de Blasio and Gov. Andrew Cuomo for their work on the deal. Cuomo joked last year that he’d change his name to “Amazon Cuomo” in order to lure the company to New York.

“A small group 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 in a statement.
“The New York State Senate has done tremendous damage. They should be held accountable for this lost economic opportunity.”

In response to the news that Amazon was canceling its Long Island City plans, de Blasio said: “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. Instead of working with the community, Amazon threw away that opportunity.”

Union pushback 

Amazon, which publicly acknowledged that it would not support the unionization of its New York City employees, also faced backlash from various labor organizations.

“Rather than addressing the legitimate concerns that have been raised by many New Yorkers, Amazon says you do it our way or not at all, we will not even consider the concerns of New Yorkers – that’s not what a responsible business would do,” Chelsea Connor, a spokesperson for the Retail, Wholesale and Department Store Union said in a statement on Thursday.

Both 32BJ SEIU and the Building and Construction Trades Council — major supporters of the mayor and governor, respectively — have backed the Amazon deal. Gary LaBarbera, president of the BCTC, said he sat down with Amazon’s head of real estate the day after the company announced it would move to New York. The company, LaBarbera told The Real Deal in an interview, committed to using all-union labor for the construction of its headquarters. He lamented that the city was missing out on $27 billion in economic activity —  the revenue the Cuomo administration estimated that the Amazon deal would generate.

“We are stunned by today’s unfortunate news. Politics and pandering have won out over a once-in-a-generation investment in New York City’s economy, bringing with it tens of thousands of solid middle class jobs,” Gary LaBarbera, president of the Building and Construction Trades Council, said in a statement. In a revised statement, he added, “We will remember which legislators forgot about us and this opportunity.”

He identified Gianaris and City Council member Jimmy Van Bramer and asked, “What’s their plan to create $27 billion in economic activity?”
Rich Bockmann contributed reporting.