Amazon is reportedly reconsidering its decision to bring 25,000 jobs to New York City as part of its recent search for a second headquarters. The Washington Post first reported the news, citing “two people familiar with [Amazon’s] thinking.”
The ecommerce giant announced in November that it was splitting its so-called “HQ2” between two cities — New York, and Crystal City, Virginia, a suburb of Washington, D.C. Amazon also announced that it would add 5,000 jobs in Nashville. Almost immediately thereafter, advocacy groups and local politicians in Long Island City — the neighborhood the new headquarters is supposed to go in — announced their opposition to the deal, and have protested meetings the city council held with Amazon. But the opposition scored a crucial victory this week when a local politician, who has been critical of the deal, was nominated to a state board that has the power to reject the deal or lessen the amount of tax incentives Amazon would receive. That politician, Sen. Michael Gianaris of Queens, called the large amount of incentives offered to Amazon “offensive.”
New York offered Amazon about $1.525 billion in incentives for about 25,000 jobs; Virginia offered Amazon about $573 million in incentives for the same number.
One of the two sources mentioned in the piece told the Washington Post, “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.” It’s unclear whether or not Amazon would add more jobs in those two locations or go somewhere else if it decides to pull out of New York. Because Amazon has not leased or purchased any office space yet, it would be relatively easy for the company to pull out of the deal, according to the Post.
An Amazon spokeswoman told the Post: “We’re focused on engaging with our new neighbors — small business owners, educators, and community leaders. Whether it’s building a pipeline of local jobs through workforce training or funding computer science classes for thousands of New York City students, we are working hard to demonstrate what kind of neighbor we will be.” VentureBeat reached out to Amazon for additional comment, but the company declined to comment beyond the statement already provided to the Post.
Local critics of the New York deal have expressed concern that the city and state offered Amazon too large of tax breaks to come to Long Island City, that Amazon won’t contribute enough in tax money to offset the increased burden its employees will place on public transportation, and about Amazon’s reputation as an anti-union company, given that New York City is very pro-union.
The Post’s story now forces New York officials to consider the following: Are they OK with potentially letting Amazon abandon its plans for the city, or are they going to make it a top priority to strike a deal with Amazon to still bring 25,000 jobs to the city? While Amazon may genuinely be reconsidering its decision, the Post‘s story does raise the question of whether or not Amazon officials went to the press, threatening to leave New York, in order to place public pressure on officials to stop criticizing the initial deal. Amazon might also face difficulty trying to strike a deal with another city at this point, given the very public bruising corporate subsidy packages are taking right now thanks to Foxconn’s flip-flopping over its Wisconsin factory.