Amazon pulls out of plan to build New York City headquarters
Amazon has announced that after opposition from local New York officials, it is dropping plans to move their HQ2 operation to Long Island City.
Amazon’s announcement that it will cancel its plans to build a major office complex in Long Island City is a huge defeat for Governor Cuomo and Mayor de Blasio, who staked their political capital on the high-profile deal.
The collapse of the deal is a victory, though, for the anti-gentrification, anti-development left, which assailed the plan as a giveaway to a trillion-dollar company and its billionaire owner. They claimed that Amazon would drive up rents, destroy the local community, create noise pollution, and increase wealth inequality in New York. A typical response came from law professor and three-time loser political candidate Zephyr Teachout, who exulted on Twitter, “!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! POWER OF THE PEOPLE. Speechless. Truth to power wins!”
What has “truth to power” won? It’s not as though Amazon was preventing the rise of sustainable, green, unionized, and well-paying manufacturing jobs in Long Island City, or stopping the construction of affordable low-income housing, along with schools and parkland.
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The area where the company planned to build its secondary headquarters has been the focus of economic development plans for decades. It is presently the site of parking lots, storage units, and empty, city-owned land. Now it will stay that way.
Amazon was planning to rent 1 million square feet in the Citigroup Tower in Long Island City, which is largely vacant of tenants, and will now remain so.
Opponents claimed that the incentives offered to Amazon were unfair, and they have a point: most corporate subsidies are ineffective and wasteful. But Amazon wasn’t being offered anything obscene.
Job-creation tax incentives are written into state law and are available to any company doing business in New York. And the local politicians crying loudest have never squawked about the $420 million in transferable tax credits that the state gives every year to the film and television industries.
Some progressives were angry that Amazon wasn’t promising to guarantee enough well-paying jobs to residents of the nearby Queensbridge Houses, the largest public housing project in the United States. Decrying the “gentrification of jobs,” critics sneered that Queensbridge residents would get only a handful of entry-level positions and minimal training. Not to worry: now they won’t get anything.
Why would they? Many take major campaign contributions from the studios based in their Queens districts. “I hope this is the start of a conversation about vulture capitalism and where our tax dollars are best spent,” city council speaker Corey Johnson, a 2021 mayoral hopeful, said in a prepared statement. He has received substantial contributions from film and television industry executives, too, and has never complained about the Empire State Film Tax Credit Program.
Opponents also argued that Amazon is not unionized, and that non-union companies are not welcome in New York, a “union town.” But the Amazon headquarters would have been built by union labor. The company was going to employ 3,000 unionized building-service workers in its 8 million square feet of office space, which is why local 32BJ was so enthusiastic about the deal. Those jobs are gone now, too.
Some progressives were angry that Amazon wasn’t promising to guarantee enough well-paying jobs to residents of the nearby Queensbridge Houses, the largest public housing project in the United States. Decrying the “gentrification of jobs,” critics sneered that Queensbridge residents would get only a handful of entry-level positions and minimal training. Not to worry: now they won’t get anything.
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Amazon critics bought wholesale the fiction that New York City is where everyone wants to be, so even the most draconian conditions will be acceptable to potential employers. Council Member Jumaane Williams, now running for public advocate, gave voice to this complacency when he said, “I expected this mayor to be a stalwart of deeply income-targeted affordable housing . . . You give away $3 billion? $3 billion? To the richest man in America? For a company that will most likely come here anyway?” So much for Gotham’s unbeatable appeal.
New York State can ill afford to thumb its nose at 25,000 well-paying jobs, which would have produced billions of dollars in tax revenues and contributed mightily to the local economy.
The state is losing residents to out-migration and now faces a revenue gap of $2.3 billion from the exodus of high-earners to Florida and other low-tax states.
Critics of the Amazon plan can rejoice in their success in having prevented economic development in a moribund area of western Queens. They have preserved stagnation and called it progress. Nice work, guys.
Adapted from the Manhattan Institute's City Journal.
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