Why the dream of Amazon to have a headquarters in New York imploded

Not long ago, three months to be exact, the giant HQ2 project of Amazon was considered a national award.

The world's largest e-commerce company had planned to build a second large campus outside of its Seattle mothership to continue its expansion. Municipal leaders across the country have been calling on the attention of Amazon Chief Executive Jeff Bezos in his quest for $ 5 billion in development and the promise of 50,000 high-paying jobs.

Then, New York City won half of the project and everything went wrong.

After months of opposition from local politicians and union groups, Amazon Thursday canceled his plans build a campus of 25,000 employees in New York. Construction of a 25,000-employee site in Arlington, Va., To be built over the next decade, is still ongoing.

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Amazon kills plans for New York headquarters

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HQ2's brief journey, from the development coveted by a large employer to the betting project by a vulture capitalist, will be studied by developers and politicians for a long time. It clearly shows how badly Amazon has been diagnosing the political climate in which it has evolved, and has made the country a bigger target for protesters by creating such a brilliant application process. The situation also shows how negative perceptions about Bezos' treatment of workers and alleged monopoly practices are eroding the reputation of the once excellent society. public polls – contrary to the demonstrations – showed his support for the project.

Special attention will also be paid to progressive politicians who helped to torpedo the project and prevented tens of thousands of new jobs from entering the city. It is still too early to say they will be applauded for preventing gentrification and distribution of information by companies or they will be fired.

Amazon has not responded to a request for comment.

"It was the perfect storm," said Rebecca Kolins Givan, badociate professor at the Rutgers School of Management and Labor Relations, about the sudden departure of Amazon. "The opposition to Amazon took shape nationally and globally as people realized how fascinating the retail market they controlled and the poor quality of the jobs they offer. The strange and secret beauty contest that Amazon has asked cities to participate has caused a lot of resentment. . "

A prince becomes a frog

Everything started innocently enough.

In September 2017, Amazon announced plans to build a second headquarters, aiming to invest $ 5 billion and hire 50,000 people for an average annual salary of $ 150,000. HQ2, so nicknamed, almost immediately became the "it" development plan that all US cities with more than one traffic light on the march desperately needed to win. This was seen as a generational opportunity to recreate a lucky city into a dazzling technological center.

Amazon's strategy of running a public competition seemed brilliant: more than 200 candidates were trying to outdo themselves, many offering multi-billion dollar incentives. The media faded, flipping as much ink as possible to write about the potential of the project.

After the announcement of 20 finalist cities in January 2018, the public hearing process turned into behind-the-scenes secret negotiations, as news publications and local citizens could not access the news. basic on many offers.

Aware that QG2 was too big for a city, Amazon split the project into two and ad winners in November 2018. These coveted gold tickets went to Arlington, Virginia and Long Island City in Queens, New York.

Even before the official announcement, opposition to the New York campus has begun. Several progressive local politicians, encouraged by the recent election of the Democratic Socialist Alexandria Ocasio-Cortez to Congress, criticized the project. Amazon's incentive measures, worth $ 3 billion, were considered to be business welfare, particularly because of Bezos' position as the most people-friendly person. rich of the world. The anti-union stance of Amazon in a heavily union town was another major problem. The company's plan for a helipad was mocked.

The company had asked bidders to offer a "business-friendly environment", probably hoping for a less difficult relationship than it has with the Seattle government. He did not have one.

"Amazon felt that no one would refuse the generosity of its offer, and in fact, New Yorkers said they were a union town and they are looking for good jobs," said Givan.

During two meetings of the New York City Council in December and January, Amazon leaders were pilloried about the company's labor practices and its refusal to remain neutral in union organizing efforts. workers. The council had been set aside in the QG2 process, with the state taking plans in its place, creating a new ill will towards Amazon. Councilman Jimmy van Bramer and US Senator Michael Gianaris, both of whom represent Long Island City, are the two most vocal critics.

The Virginia project, meanwhile, has undergone much less backlash, perhaps in part because of the state's much smaller $ 573 million incentive package.

Opposition from local politicians and states has been fiercer than expected and Amazon's leaders have decided that these politicians could jeopardize the long-term success of the project, said one person familiar with Amazon's plans. Several private meetings with local politicians were as contradictory as these public hearings, with officials essentially saying that they wanted Amazon to go. This left very little to Amazon to work, said the person. Such a point of view contrasts with the comments of several opposing politicians, who said that Amazon preferred to withdraw rather than work with them on a more agreeable agreement.

Although lobbyists and some members of the general public also responded, Amazon had experience managing such issues in Seattle and had conducted outreach activities to strengthen support for these groups.

The fierce opposition of politicians contrasted with mostly positive public polls, creating a "red flag" for the company and eventually leading to the departure of Amazon, said the person.

The appointment of Senator Gianaris to the Public Authority Supervisory Board, a state committee with the veto power of the Amazon project, was another major source of concern.

The decision to unplug the project from New York City has been made in recent days, said the official. Thursday's announcement followed reports late last week Amazon was considering leaving New York, although the company at the time responded that she was working with her "new neighbors", suggesting that she was still engaged in the project.

Amazon, which already has more than 5,000 employees in New York, announced Thursday its intention to continue to develop these teams.

Many progressive groups, politicians opposed to the project and several unions applauded Amazon's decision to leave. Other unions, such as those from the building, supported the project, knowing that it would have brought work to their members for a decade or more.

The International Union of United Food and Commercial Workers was among the opponents.

"We can now see that everything revolves around blind greed and Jeff Bezos's belief that ordinary taxpayers should pay the bill for their new head office, even as the company is actively working to eliminate the millions jobs in the US retail business, "said Marc Perrone, union president. Thursday in a statement.

Lasting implications

New York City Mayor Bill de Blasio and New York Governor Andrew Cuomo expect the head office to be brought to New York and see the plan collapse so quickly. In November, Cuomo praised the project as a mbadive victory for New York, citing the $ 27.5 billion in expected tax revenue from the project over 25 years, a huge boon against $ 3 billion in incentives. Many business leaders said they were dismayed by the loss of HQ2 as the new economic engine of the city.

"A small group of politicians," said Cuomo in a statement on Thursday, "put his own political interests above his community – a poll after another revealing mbadive support for bringing Amazon to Long Island City – the economic future of the state and the best interests of it, people of this state ".

He said that these politicians, especially in the state Senate, "should be held accountable" for the failure of the project.

The decision of QG2 comes just a week after Bezos said in a blog that he was the target of a blackmail plot by the National Enquirer, who would have threatened to publish dirty images of the CEO if he did not cancel an investigation on the tabloid.

This second technology technician bomb in a few days could challenge the company's ability to remain focused on its growth initiatives. Virginia, where is the other headquarters campus, is undergoing its own political crisis. The governor, the lieutenant governor and the attorney general are involved in scandals unrelated to the headquarters project.

Amazon said it did not intend to reopen the head office bids, but rather to allocate additional hires to its 17 offices in the United States and Canada. An office of 5,000 employees in Nashville, announced with the winners of Head Office 2, will also move as planned.

In the future, leaders of more cities might rethink their lavish incentive programs to attract business, and legislatures may decide to remove secret deals such as those leading to QG2 agreements, said Givan. Other big companies are now less likely to copy Amazon to create their own fashionable projects, inspired by the HQ2 style, preferring to keep things a little quieter. Google, for example, spends billions of dollars developing in the United States, including New York, but with far less fanfare or criticism.

"The implications," said Givan, "can be felt for a long time."

First published at 3 pm on February 15.
Updated at 13:44 PT: Add more context throughout.