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Amazon Pulls Out of Planned New York City Headquarters

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Why the New York Amazon Deal Fell Apart

After community backlash, Amazon has decided not to move forward with its plan to open a headquarters in Long Island City, Queens. Here’s a look at what happened.

“New York City gave Amazon a real opportunity here, and all we asked was that they be a good neighbor and be part of the the community. And clearly, they weren’t ready to do that. And it’s very disappointing. There was no dialogue. There was no effort to work together.” “G-T-F-O, Amazon has got to go!” “The city was paying for those jobs. We could invest those $3 billion in our district ourselves, if we wanted to.” “What the mayor and the governor did here was to negotiate in secret a really bad deal for New York.” “I’m surprised that they didn’t seem to have more of an appetite to work with the community. I thought it would have been a process, and they would have engaged in a more open dialogue rather than seeming defensive and not wanting to work through those issues.” “The popularity of Amazon is about 80 percent across the state. And it’s a very small group of politicians who are pandering to the local politics.” “Our politicians basically put politics over their own community. Basically, New York is closed for business, everybody, or at least Queens is.” “For us to pretty much kick them out is horribly disastrous for New York, and for our borough in particular.”

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After community backlash, Amazon has decided not to move forward with its plan to open a headquarters in Long Island City, Queens. Here’s a look at what happened.CreditCredit...Hiroko Masuike/The New York Times

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Amazon on Thursday canceled its plans to build an expansive corporate campus in New York City after facing an unexpectedly fierce backlash from lawmakers, progressive activists and union leaders, who contended that a tech giant did not deserve nearly $3 billion in government incentives.

The decision was an abrupt turnabout by Amazon after a much-publicized search for a second headquarters, which had ended with its announcement in November that it would open two new sites — one in Queens, with more than 25,000 jobs, and another in Virginia.

Amazon’s retreat was a blow to Gov. Andrew M. Cuomo and Mayor Bill de Blasio, damaging their effort to further diversify the city’s economy by making it an inviting location for the technology industry.

The agreement to lure Amazon to Long Island City, Queens, had stirred intense debate in New York about the use of public subsidies to entice wealthy companies, the rising cost of living in gentrifying neighborhoods, and the city’s very identity.

“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,” Amazon said in a statement.

The company made its decision late Wednesday, after growing increasingly concerned that the backlash in New York showed no sign of abating and was tarnishing its image beyond the city, according to two people with knowledge of the discussions inside the company.

In recent days, Mr. de Blasio had tried to reach Jeff Bezos, Amazon’s chief executive, according to one official. But Mr. Bezos did not speak with him, nor with Mr. Cuomo.

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The company’s decision was at least a short-term win for insurgent progressive politicians led by Representative Alexandria Ocasio-Cortez, whose upset victory last year occurred in the western corner of Queens where Amazon had planned its site.

Her race galvanized the party’s left flank, which mobilized against the deal, helped swing New York’s Legislature into Democratic hands, and struck fear in the hearts of some local politicians.

On Thursday, Ms. Ocasio-Cortez seemed to revel in Amazon’s decision, writing on Twitter that “anything is possible.”

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Anti-Amazon protesters before a New York City Council hearing in January. The deal to build a sprawling Amazon campus in Queens had also run into opposition from some local lawmakers.Credit...Hiroko Masuike/The New York Times

Not only progressive activists took issue with the Amazon deal: Michael R. Bloomberg, who championed New York City as a technology hub while mayor, questioned the incentive package earlier this month.

The company also had its supporters — in the city’s business community, among some unions and within nearby public housing, where some residents were hopeful that the project would bring jobs. A pair of polls showed broad support around the city and state.

But in the end, it was not enough to persuade the company to ride out the torrent of negative attention.

Amazon did not inform the governor or the mayor of its decision to pull out until Thursday morning, shortly before the company posted its announcement online.

Mr. Cuomo and Mr. de Blasio reacted in starkly different ways. The governor blamed the newly emboldened Democrats who now control the State Senate for derailing the project.

“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 governor said in a statement.

For his part, Mr. de Blasio turned on the company after having steadfastly backed the deal.

“We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world,” Mr. de Blasio said. “Instead of working with the community, Amazon threw away that opportunity.”

The mayor and the governor, who only rarely find common cause, met Monday in Albany and discussed how to save the deal, which had appeared increasingly imperiled, according to a person familiar with the conversations. After the meeting, Mr. de Blasio spoke to a senior Amazon executive by phone and was told that the company remained committed to New York, the person said.

Both the mayor’s and the governor’s offices reassured Amazon executives that, despite the vocal criticism, the deal they had negotiated would be approved. But the company appeared upset at even a moderate level of resistance, said the person, who, like many of the people describing private conversations at the company and with elected officials, did so on the condition of anonymity.

A decisive moment appeared to come when the Senate Democrats selected Senator Michael Gianaris of Queens for a state board with the power to veto the deal. Mr. Gianaris had once supported the efforts to bring Amazon to New York, but became a vocal critic after learning the details of the plan.

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Gov. Andrew M. Cuomo, center, and Mayor Bill de Blasio, second from right, had been forcefully defending the deal they negotiated.Credit...Chang W. Lee/The New York Times

Over time, opposition to Amazon had spread from the specifics of the deal to the company’s corporate practices. Elected officials and activists in New York drew attention to the company’s anti-union stance and its work with federal immigration officials — positions unpopular with Democratic leaders across the country.

Amazon executives felt they had been open to answering questions, submitting to two City Council hearings, with another planned for later this month. They had begun working on a hiring plan, people with knowledge of the planning said, and were encouraged by public support in two polls of voters, conducted by Quinnipiac University and Siena College. While the subsidies were less popular, the deal to bring Amazon, and tens of thousands of jobs, was welcomed by a variety of groups.

On Wednesday, Mr. Cuomo had even brokered a meeting between Amazon executives and union leaders who had been resistant to the deal — including from the Retail, Wholesale and Department Store union and the Teamsters.

“Amazon and the governor and everybody agreed yesterday on a way to move forward,” said Stuart Appelbaum of the retail union, who was part of the meeting. “Shame on them. The arrogance of saying ‘do it my way or not at all.”’

Some unions supported the deal, and even those opposed had appeared willing to work with Amazon if the company agreed to not work against the unionization of its employees in New York. An Amazon representative, during one council hearing, pointedly said the company would not agree to such terms.

[Column: For once, Amazon loses a popularity contest.]

Kathryn S. Wylde, the chief executive of the Partnership for New York City, an influential business group, said the reception Amazon had received sent a “pretty bad message to the job creators” of the city and the world.

“How can anyone be surprised?” Ms. Wylde said. “We competed successfully, made a deal and spent the last three months trashing our new partner.”

When Amazon announced plans for a second headquarters in September 2017, it promised 50,000 high-paying jobs and billions in investment for a community that would be coequal to its home in Seattle. The voracious company, whose ambitions outgrew the number of people it could hire in the Pacific Northwest, set off a nationwide frenzy, with more than 200 cities making bids.

Amazon decided last fall that no one city could provide the number of tech workers it needed and split the headquarters in two.

The company has long been willing to take short-term pain in exchange for maintaining long-term leverage. In Seattle, Amazon’s relationship with officials soured as it grew to become the city’s dominant employer. Last year, when the Seattle City Council proposed taxing large employers to pay for homeless services and affordable housing, Amazon took a rare public stance and threatened to halt its expansion. In the end, the city retreated and got rid of even a pared back version of the tax it had adopted.

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A view of the Pepsi-Cola sign in Long Island City. A campus for as many as 40,000 Amazon workers was planned for the neighborhood.Credit...Christopher Lee for The New York Times

The Seattle relationship looms over Amazon’s growth plans. As much as Amazon wanted New York’s talent, it was not worth facing years of opposition on broad swaths of issues.

Instead, Amazon will grow across its tech hubs, which include large outposts in cities like Boston, Austin, Tex., and Vancouver, British Columbia, as well as smaller ones in Pittsburgh and Detroit. It will lose the value it has said it finds in having employees in a centralized corporate campus, but will maintain flexibility to grow where and when it wants.

Even in New York, where Amazon already has 5,000 workers, about half at a distribution center on Staten Island, the company still plans to add more jobs, particularly in advertising, fashion and web services.

Mr. Gianaris said the collapse of the deal in Queens revealed the company’s unwillingness to work with the community it had wanted to join.

“Like a petulant child, Amazon insists on getting its way or takes its ball and leaves,” said Mr. Gianaris, whose district includes Long Island City. “The only thing that happened here is that a community that was going to be profoundly affected by their presence started asking questions.

“Even by their own words,” he added, pointing to the company’s statement on the pullout, “Amazon admits they will grow their presence in New York without their promised subsidies. So what was all this really about?”

While small protests greeted the company after its initial announcement in November, the first inkling that opposition had taken hold among the city’s Democratic politicians came during a hostile City Council hearing the next month. Protesters filled the seats, unfurled banners and chanted against the company. Not a single council member spoke up in defense of the deal or the company.

Company executives fared no better at their second appearance, in January, though supporters, lobbyists and consultants were better prepared. Unions supporting the deal, including the powerful 32BJ Service Employees International Union and the Building and Construction Trades Council of Greater New York, staged a rally outside City Hall immediately after one held by opponents.

[Amazon had a ‘productive meeting’ with union leaders, just a day before they pulled out.]

Still, the company did not hire a single New Yorker as an employee to represent it in discussions with local groups. Its main representatives traveled between Washington and Manhattan, and only one had moved into an apartment to work with community members and foster support.

Gianna Cerbone, who owns a restaurant several blocks from what would have been the main Amazon campus, said the demise of the deal was a major blow to people who need jobs and local businesses that would have benefited.

“I’m really upset because I don’t think they realized what they did,” she said of the elected officials who had opposed the plan. “And they’re proud of it? They think they did something lovely? They wanted the political gain, they should have done it in a different way. They get put into office for us, not to work for themselves.”

A correction was made on 
Feb. 14, 2019

An earlier version of this article referred incorrectly to the district where Alexandria Ocasio-Cortez was elected. While she represents a neighboring district, it is not the district where the Amazon headquarters were planned. (Carolyn Maloney represents the 12th Congressional District.)

How we handle corrections

Corey Kilgannon, Patrick McGeehan, William Neuman, Vivian Wang and Karen Weise contributed reporting.

A version of this article appears in print on  , Section A, Page 1 of the New York edition with the headline: Amazon Scraps New York Campus. Order Reprints | Today’s Paper | Subscribe

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