No matter how much they wanted to live in New York City before moving there, most newcomers find plenty to gripe about afterward, from standing-room-only subways to sky-high rents.
Being reminded a little too much of home seldom makes the list. It may, however, have been the deal-breaker for Amazon, the e-commerce giant that abandoned plans for a massive office complex in the Big Apple amid political pushback reminiscent of its existing Seattle headquarters.
Amazon executives touring the country during a yearlong corporate beauty pageant for the complex, billed as “HQ2,” indicated to local officials that their employer had become a scapegoat for any and all of Seattle’s problems, and they wanted to make sure the company — one of the richest in the U.S. — would be truly welcome in a new site, said Michael Farren, who studies the effects of government favoritism on businesses at George Mason University’s Mercatus Center.
Founder and CEO Jeff Bezos was looking for a place where his company “would have good public relations, and New York City was starting to look uncomfortably like an East Coast version of Seattle,” said Farren, who questioned whether the entire HQ2 strategy was designed to give Amazon an exit from the Washington city if its relationships there continued to deteriorate.
Boeing, the Chicago-based planemaker whose manufacturing operations are centered in the Seattle area, employed a similar tactic when it decided to locate a second plant for its 787 Dreamliner in South Carolina in 2009, following contentious negotiations with its labor unions that included strikes by the machinists. A so-called right-to-work state, South Carolina has curbed the power of unions with a law that forbids requiring membership as a condition of employment.
“Companies will take only so much,” said Thomas Cooke, a professor at Georgetown University’s McDonough School of Business.
Indeed, Amazon’s decision to locate in Long Island City, near the border between the boroughs of Queens and Manhattan, came just months after a bruising fight with Seattle’s government over a tax to help a growing population of homeless residents.
In June, the City Council repealed a yearly levy of $275 per worker on its largest employers, a hotly debated measure passed just weeks before and intended to raise $47 million a year to help house a burgeoning homeless population. Concern over the measure, similar to taxes in Los Angeles and Miami, had prompted Amazon to temporarily halt work on a 17-story office tower in the Denny Triangle neighborhood.
“We remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here,” Drew Herdener, a company vice president, said at the time. “We are highly uncertain whether the City Council’s anti-business positions or its spending inefficiency will change for the better.”
This month, when Amazon abandoned its plans for New York, half of a two-pronged initiative that would have split 50,000 new jobs between the metropolis and the northern Virginia suburbs of Washington, D.C., the company blamed the decision on opposition from a vocal minority of state and local officials.
In the three months between the fanfare-filled site selection and its demise, critics in New York had fretted about the impact on the city’s schools and its beleaguered subways and questioned why one of the world’s richest companies needed the tax breaks Amazon was promised.
The New York City Council created a Twitter hashtag, #AmazonAnswersNYC, for its 8.6 million residents to ask questions and make comments on the deal, the subject of a number of public hearings.
“The city and the state made a deal with Amazon for HQ2 in Long Island City and agreed to give away at least $3 billion in subsidies before they did their due diligence,” Council Speaker Corey Johnson said during one such hearing, before the finance committee in late January.
Citing earlier statements by Mayor Bill de Blasio on government’s responsibility to “guard people from the enormous power of moneyed interests,” he observed, “That’s the essence of what we’re here to do today.”
Councilman Jimmy Van Bramer, who represents the neighborhood where Amazon planned to locate, vowed not to sign off on the deal and urged Amazon to stop sending fliers promoting its new campus to the residents of his district.
“We often hear that it’s too much or we’re going too far when it comes to giving poor or working-class people more and better healthcare; it would be too much of a burden for all workers to be unionized,” he said. “But we never hear those same people say that Jeff Bezos and people worth tens of billions of dollars have too much damn money. This Amazon debacle must be an inflection point for our society where we rein in corporate welfare and the billionaire class.”
Another high-profile critic was U.S. Rep. Alexandria Ocasio-Cortez of New York, a freshman Democrat who had argued that Amazon shouldn’t be given billions in incentives while many residents struggle to find affordable housing.
“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 said afterward on Twitter, referring to Bezos, who controls a fortune of more than $130 billion.
The 70 percent of New Yorkers who had cheered the company’s arrival, and the jobs with an average salary of $150,000 it pledged to create, no doubt disagreed. Rather than blame other politicos for their actions, however, New York’s mayor chided Amazon for failing to win opponents to its cause.
“Amazon seemed unwilling to bend or even to talk in earnest with the community about ways to shape their project,” de Blasio wrote in a New York Times column pointing out that the company notified him of its decision only about an hour before it was announced. “They didn’t want to be in a city where they had to engage critics at all.”
The behavior is part of a pattern for Amazon, he added, citing the Seattle homeless tax.
“Expansion in New York encountered opposition in no small part because of growing frustration with corporate America,” de Blasio wrote. “Amazon’s capricious decision to take its ball and go home, in the face of protest, won’t diminish that anger.”
If the decision empowers neighborhood activists frustrated by tax breaks they see as corporate giveaways, it also illustrates the limits of corporate tolerance for negative publicity and political gamesmanship.
“There’s a national lesson to be learned here, for all companies,” Cooke said. “Before you negotiate confidential agreements with state and local authorities, be aware that when the menu, if you will, becomes public, you will be held to very tough scrutiny. That needs to be something that all parties have in mind.”
For New York, the loss of Amazon will mean less than it might have for less-populous cities with a smaller economic base, he said, but there’s still a cost.
“Nobody’s coming in with 25,000 jobs tomorrow morning,” he said. “If Amazon had successfully opened up in Long Island City, think of the other companies that would have jumped on the bandwagon and said, ‘We want to be part of the parade.'”
