Amazon dumps New York headquarters, 25,000 jobs

Amazon faced fierce opposition over building a headquarters in New York. Photo / AP

Amazon abruptly dropped plans Thursday for a big new headquarters in New York that would have brought 25,000 jobs to the city, reversing course after politicians and activists objected to the nearly US$3 billion ($4.3b) in tax breaks promised to what is already one of the world's richest, most powerful companies.

"We are disappointed to have reached this conclusion — we love New York," the online giant said in a blog post announcing the withdrawal.

The stunning move was a serious blow to Gov. Andrew Cuomo and Mayor Bill de Blasio, who had lobbied intensely to land the project, competing against more than 200 other metropolitan areas across the continent that were practically tripping over each other to offer incentives to Amazon in a fierce bidding war the company stoked.

Amazon announced in November that it had chosen the Long Island City section of Queens for one of two new headquarters, with the other in northern Virginia. The company had planned to spend US$2.5b building the New York office.

Democratic Rep. Alexandria Ocasio-Cortez, New York City's new liberal firebrand, exulted over Amazon's pullout.

"Today was the day a group of dedicated, everyday New Yorkers and their neighbors defeated Amazon's corporate greed, its worker exploitation, and the power of the richest man in the world," she tweeted, referring to Amazon CEO Jeff Bezos.

The governor and the mayor had argued that Amazon would transform the Long Island City neighborhood into a high-tech hub and spur economic growth that would pay for the US$2.8b in state and city incentives many times over.

Cuomo complained in a statement Thursday that "a small group of politicians put their own narrow political interests above their community." And the mayor criticized Amazon for not doing more to try to win over New Yorkers.

"You have to be tough to make it in New York City," de Blasio said.

In its announcement, Amazon said it has 5,000 employees in the city and plans to increase that number.

It said it does not plan to look for another headquarters location at this time and will continue with its move to build new offices in Arlington, Virginia, and Nashville, Tennessee. The Arlington site is expected to be the same size as the New York one, with 25,000 employees. The Nashville office is expected to have 5,000.

Amazon faced fierce opposition over the tax breaks, with critics complaining that the project was an extravagant giveaway — or worse, a shakedown — and that it wouldn't provide much direct benefit to most New Yorkers.

The list of grievances against the project grew as the months wore on, with critics complaining about Amazon's stance on unions, and some Long Island City residents fretting that the company's arrival would drive up rents and other costs.

Opposition to the deal was led in the Democrat-controlled state Senate by Michael Gianaris, the chamber's No. 2 lawmaker, whose district includes Long Island City. Initially among the politicians who supported bringing an Amazon headquarters to the city, Gianaris did an about-face after the deal was announced, criticising the secrecy surrounding the negotiations and the generous incentives.

Earlier this month, Gianaris was appointed to a little-known state panel that could have ultimately been asked to approve the subsidies.

It is unclear whether the City Council had any power to scuttle the deal. But City Council members held hearings at which they grilled Amazon officials about the company's labor practices, its contract with Immigration and Customs Enforcement to provide facial recognition technology and other issues.

Construction industry groups and some local business leaders had urged the public and officials to get behind the plan.

Erik Benaim, a realty executive who gets most of his sales and rentals in Long Island City, had led a petition in support of Amazon, drawing 4,000 signatures.

"I woke up this morning and I had no clue this would happen. Zero. This news is a shock, and I'm devastated," he said.

A Quinnipiac University poll released in December found New York City voters supported having an Amazon headquarters 57 per cent to 26 per cent. But they were divided over the incentives: 46 per cent in favor, 44 per cent against.

Andrew Ousley, a business owner who lives near the proposed site, said he had been considering moving out before Amazon moved in.

"Now that they're not coming, I'm more likely to stay and see how the neighborhood continues to grow and evolve in a more organic fashion," he said.

In recent weeks, a City Council leader whose district includes Long Island City tried to get Amazon officials to agree to remain neutral in the face of any potential union drive. But an Amazon executive would not give such a commitment.

- AP