Amazon, the world’s largest retail company, has decided to back out of its billion-dollar plans for Long Island City.
The plans to develop a new campus on the Anable Basin waterfront in Long Island City and bring at least 25,000 jobs to the community were ended on Feb. 14 in a lengthy statement from Amazon to its DayOne blog.
“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 wrote. “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 Valentine’s Day breakup deprives the city of an estimated $27 billion in economic revenue that the Amazon project in Long Island City was projected to generate over the next 25 years. Amazon had touted that the average annual salary for the each job would be $150,000.
One of the partners in the project was to have been Plaxall, which owns much of the land around the Anable Basin that would have been developed under the Amazon proposal.
“We’re extremely disappointed by this decision,” Plaxall Managing Directors Paula Kirby, Tony Pfohl and Matthew Quigley said in a joint statement to QNS. “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 Long Island City Partnership was similarly disappointed in the outcome.
“On the brighter side, the world is getting to see what Long Island City has to offer as a home for great companies and great people. Having one of the largest companies on the planet make LIC its first choice to locate one of its new headquarters highlights just how far we’ve come-with even more opportunities on the horizon,” according to a statement from the LIC Partnership. “Before Amazon’s announcements, the Long Island City Partnership was advocating for investments to our infrastructure, workforce development, schools and mass transit, and we will continue to do so.”
Amazon reached the deal with the city and state in November 2018 in exchange for receive up to $3 billion in tax incentives. Local elected officials opposed the plan, citing the reported tax breaks and Amazon’s corporate history — and a need to use public funding for infrastructure improvements and housing.
The decision came less than a week after The Washington Post — which is owned by Amazon founder Jeff Bezos — reported that sources within Amazon were reconsidering its HQ2 deal with New York City. That report came out days after state Senator Michael Gianaris — whose district includes Long Island City and is staunchly opposed to the deal after its November 2018 announcement — was named to the Public Authorities Control Board, giving him potential veto power over the plan.
Gianaris and other lawmakers — including City Councilman Jimmy Van Bramer and Assemblyman Ron Kim — believed the $3 billion incentive package would be better spent on affordable housing and the crumbling subway system instead of “corporate welfare” to the e-commerce giant.
Governor Andrew Cuomo, however, was apoplectic about the developments. Referencing Queens lawmakers who opposed the Amazon project, he said “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.”
“The New York State Senate has done tremendous damage. They should be held accountable for this lost economic opportunity,” he said in a statement Thursday afternoon.
They weren’t bluffing
Last week, after The Washington Post reported about Amazon having second thoughts on Long Island City, critics believed it was gamesmanship. However, the Feb. 14 statement proved Amazon wasn’t bluffing.
The Seattle-based company said it would proceed with its plans to develop corporate campuses in Nashville and northern Virginia. However, at this time, it doesn’t appear Amazon will search for an alternative location for its planned LIC HQ2.
“We are disappointed to have reached this conclusion — we love New York, its incomparable dynamism, people, and culture — and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents,” Amazon’s statement continued. “Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts … The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult.”
Modern Spaces co-founder and CEO Eric Benaim, who launched an online petition last week imploring Amazon to stay in the deal, said that Amazon’s loss would have troubling repercussions for Queens and the city.
“I am absolutely devastated not just for my business, that will be fine,” he said. “I’m devastated for the 25,000 families who lost an opportunity here, 25,000 families won’t be able to afford groceries, 15,000 of these families from Queensbridge. 25,000 jobs we lost. I’m devastated not just for Long Island City and Queens but New York City.”
Earlier in the week, Benaim had warned, “If the Amazon deal falls through, it not only affects Long Island City, but also New York City as a whole. If Amazon leaves LIC, it tells every single company that they are not welcome and that NYC is closed for business. Other businesses won’t be attracted to the area because they will know NYC kicked out the biggest company and rejected the biggest economic impact in the history of the state.”
Jukay Hsu, the founder and CEO of Pursuit (formerly known as the Coalition for Queens) which teaches coding to low-income residents of Queens while fostering the burgeoning tech sector in Long Island City said, “I am very surprised by this, very surprised.”
Hsu, a member of the Amazon Community Advisory Committee, added, “They said ignore the press, we’re not reconsidering. Everything is fine they said. This was going to be a great project for New York City and it’s unfortunate it all stopped. It’s a very big setback for the tech community.”
Thomas Grech, president and CEO of the Queens Chamber of Commerce, predicted that “an entire generation will look back at these last few months and ask us why.”
“I hope those that opposed this Amazon deal have the answers to what we lost today,” he said. “Queens is one of the best places for a tech firm – for any forward-looking business – to expand into, with our diverse talent pool, entrepreneurial spirit, thriving arts scene and boundless energy. It is a shame to lose the opportunity, investment and jobs that Amazon offered but there are many more ways for businesses in Queens to thrive, and we will be welcoming them with open arms.”
De Blasio, who along with Cuomo gushed about the Amazon deal last November, was angered on Feb. 14 that Amazon seemingly spurned the city.
“You have to be tough to make it in New York City,” de Blasio said. “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. We have the best talent in the world and every day we are growing a stronger and fairer economy for everyone. If Amazon can’t recognize what that’s worth, its competitors will.”
Queens Borough President Melinda Katz seemed to echo the mayor’s sentiments, pointing a finger of blame at Amazon for turning its back on the borough.
“We all want jobs to come to Queens, and Amazon used the promise of job creation to extract major concessions for this project. But after last month’s City Council hearing, it became increasingly clear that they had no intentions of being good neighbors and committing to the required negotiations,” Katz said. “They rejected our values of supporting working people and were unwilling to work with our local communities toward a mutually beneficial resolution. New York has the best tech work force in the nation, much of which is here in Queens, so if Amazon wants to take their jobs somewhere else with a lesser work force so they can undercut wages and workers’ rights, that’s their choice.”
Amazon opponents see the thrill of victory…
For his part, Gianaris told The New York Times that he believed Amazon was acting like a “petulant child” by backing out of the deal.
“Even by their own words,’’ he told the Times, referring to the Amazon statement, “Amazon admits they will grow their presence in New York without their promised subsidies. So what was all this really about?”
In a separate statement, Gianaris said that Amazon’s behavior “shows why they would have been a bad partner for New York in any event. Rather than seriously engage with the community they proposed to profoundly change, Amazon continued its effort to shakedown governments to get its way. It is time for a national dialogue about the perils of these types of corporate subsidies.”
Van Bramer struck up a more celebratory tone, saying, “when our community fights together, anything is possible, even when we’re up against the biggest corporation in the world. I am proud that we fought for our values, which is a fight for working families, immigrants, and organized labor.”
“Defeating an anti-union corporation that mistreats workers and assists ICE in terrorizing immigrant communities is a victory,” Van Bramer said. “Defeating an unprecedented act of corporate welfare is a triumph that should change the way we do economic development deals in our city and state forever.”
City Councilman Costa Constantinides, who represents nearby Astoria, said that flawed process to lure Amazon to western Queens “ignored the community and proposed a giveaway” of taxpayer money that was intolerable in his view, and the view of others.
“It is no shock to anyone that this was a disaster from the start and bad policy. New York City has long-standing processes in place to ensure that any project — from a sidewalk cafe to a corporate headquarters — considers the community’s needs,” Constantinides said. “Our objections were never answered and we rightfully opposed this bad deal. Today is the natural result of plugging your ears to the legitimate concerns of the people and bypassing them in favor of corporations.”
State Senator Jessica Ramos said that the deal would have “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.”
“What we, the people, did in Queens was finally draw the line in the sand. We need community development not displacement,” she said. “In my district, the fight is not over. Amazon is still planning to build a distribution center here, with some of the worst jobs Amazon has to offer. What we need are fully-funded schools, an MTA that works, and affordable housing – all of which would benefit from Amazon paying their fair share. Queens is not for sale.”
Assemblyman Kim also said Amazon’s reversal was a victory for the city and state, adding that “the $3 billion taxpayer giveaway was unconscionable especially in the midst of an affordable housing crisis and a crumbling public transportation system which impacts virtually every resident of New York City.”
“While we won this battle, we must not lose track of the bigger discussion regarding the misguided practice of handing out taxpayer funded giveaways to corporations instead of investing in community needs like schools, infrastructure, affordable housing, environmental sustainability and many other critical programs and services,” Kim added in a statement.
Kim is among those seeking to becoming the city’s next public advocate in the Feb. 26 special election.
…but Amazon supporters feel the agony of defeat
Another public advocate candidate and Queens representative — City Councilman Eric Ulrich, a supporter of the Amazon project — was more blunt in his assessment of Amazon’s decision.
“It never ceases to amaze me how the loud voices of a few, could destroy the chance at a better life for so many. Amazon had big plans in store for the borough of Queens, and we blew it!” Ulrich said in a statement. “They were going to invest in our future, hire locally, contribute to the community, and make the greatest city in the world even greater. I doubt the NIMBYs have another company willing to create 25,000 good paying jobs. This sets a bad precedent moving forward and will deter other companies from setting up shop in our city.”
Congresswoman Carolyn Maloney tweeted out her frustration over the dead deal.
“Disappointed that NYC wont be home to 25K+ new jobs from HQ2 & that LIC will lose out on infrastructure improvements that would have accompanied this project. This is not the Valentine that NY needed,” she wrote. “As I said on Monday, W 25K well-paying jobs coming to the neighborhood, the residents of Queensbridge, Ravenswood, Astoria Houses, & Woodside have good chances for the future. We need to make sure that … opportunities lead to jobs.”
City Councilman Paul Vallone of northeast Queens went even further, suggesting that “this could very well go down in the history books as the greatest economic loss and missed opportunity ever for Queens and the entire city.”
“The economic impact Amazon would have had for our future generations cannot be easily replaced,” Vallone said in a statement. “On the other hand, Amazon should have certainly done better homework on the need for community and City Council outreach and involvement with a project of this scope. Now we are left to pick up the pieces.”
Congressman Tom Suozzi lamented the loss of Amazon not just for Queens but also for Long Island; he represents a district covering northeast Queens, northern Nassau and northwestern Suffolk counties.
“When you are from Michigan, you do not attack the automakers; when you are from Iowa, you do not attack the corn industry; and when you are from California, you do not attack Silicon Valley. Yet, in New York we are very cavalier and short-sighted in attacking these job creators and state revenue generators,” Suozzi said. “Make no mistake, this is a huge loss for New York and Long Island, and it will make it harder to attract major employers and jobs here in the future. We must be more strategic going forward.”
This story was updated on Feb. 15 at 10:15 a.m.