Thursday, February 14, 2019

Ball Picked Up And Shipped Home In Two Days

Amazon is bailing on its NYC "HQ2" project as a growing number of local officials were lining up to block, slow down, or even kill the expansion because of its $3 billion in subsidies cost to NYC taxpayers for a trillion-dollar corporation that could actually afford to build there if it wanted to.  The Atlantic's Derek Thompson:

Amazon said on Thursday that it will cancel its plans to add a second corporate headquarters in New York City. The company had pledged to build a campus in Queen’s Long Island City in exchange for $3 billion in subsidies.

In a statement, Amazon blamed local politicians for the reversal. “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,” the statement read. “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.”

In a period of growing antipathy toward billionaires, Amazon’s corporate welfare haul struck many—including me—as a gratuitous gift to a trillion-dollar company that was probably going to keep adding thousands of jobs to the New York region, anyway. The company has more 5,000 employees in the five boroughs, including 2,500 at a Staten Island fulfillment center and at least one thousand more in the Manhattan West office building.

At first, Amazon seemed to withstand the backlash, comforted by polls showing that the deal enjoyed broad support. A recent poll from Siena College Research Institute found 56 percent of voters statewide support the Amazon deal, including a majority of union households and people between the age of 18 and 34.

But over time, Amazon’s patience wore thin. Executives were reportedly livid at the nomination of Queens state Senator Michael N. Gianaris, an outspoken opponent of the deal, to a Public Authorities Control Board that would give him power to “effectively kill the project.” Amazon leaders were grilled at a February City Council meeting about the company’s resistance toward unions and the working conditions of its fulfillment centers. (By contrast, Virginia—the other winner of the HQ2 sweepstakes—has embraced Amazon with open arms, and the state has already authorized $750 million in state subsidies for its Crystal City headquarters.) Last week, The Washington Post (which is owned by Amazon CEO Jeff Bezos) reported that the retailer was having second thoughts about its New York campus, given the level of opposition from local politicians, advocacy groups, and the media.

Within a week, the company officially canceled the project.

The company said it does not plan to reopen the HQ2 search. “We will proceed as planned in Northern Virginia and Nashville,” the statement said.

The most obvious losers in Amazon’s reversal are real-estate speculators. In November, The Wall Street Journal reported that brokers embarked on a “condo gold rush” in anticipation of the Queens campus construction. “This is like a gift from the gods for the Long Island City condo market,” one realtor told the Journal. Alas, the gods, like the billionaires, giveth and taketh away.

But it is not clear that either New York City or Amazon will suffer with this announcement. In fact, it is more likely that neither the city’s nor the company’s economic trajectories will be materially altered. New York City doesn’t need an Amazon headquarters to be the global capital of advertising and retail, and Amazon doesn’t need New York subsidies to expand its footprint in the city.

It was always going to be a mess.  The real issue is affordable housing, which Amazon only would have made worse and did.  NYC was happy to screw over its taxpayers and citizens, and Amazon was happy enough to do the same if NYC didn't play ball.

Both are at fault here, and I sure hope other cities around the country pay attention.

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