In response to local activists and politicians raising objections to the
bribe tax incentive negotiated between Amazon and the state of New York, the retailer announced on Thursday that it was cancelling plans for its new HQ in Long Island City.
After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. 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. While polls show that 70% of New Yorkers support our plans and investment, 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 we and many others envisioned in Long Island City.
We are disappointed to have reached this conclusion—we love New York, its incomparable dynamism, people, and culture—and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.
We do not intend to reopen the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.
The tax deal would have taken effect in 2020, but had not yet been approved by regulators.
The local political opposition included US Representative Alexandria Ocasio-Cortez, New York City Council Speaker Corey Johnson, and NYC Councilman Jimmy Van Bremer. New York State Senator Michael Gianaris, who was also an outspoken critic of the deal, had been recently nominated for a seat on a state board that would vote on part of the $3 billion incentive and subsidy plan that Amazon was offered, and would likely have used his position to put a kibosh on the deal.
Supporters had claimed that the deal would have lead to $27 billion in additional tax revenue, but that estimate was based on a wildly optimistic study that ignored certain details like inflation, the economic growth that would have happened any way. The study was also based on the assumption that Amazon would bring 40,000 jobs to the area rather than the promised 25,000.
By my estimate, the study inflated the promised benefits by a factor of three, if not more.