back to article Amazon throws toys out of pram, ditches plans for New York HQ2 after big trouble in Big Apple

Amazon has ditched its plans to open a headquarters in New York City after growing opposition to its plans by local officials and unions. "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," the company said in a blog post on …

  1. ST Silver badge
    Mushroom

    Good riddance

    Amazon wanted USD $3 BEELION in subsidies but wouldn't accept union jobs.

    And Bezos wanted his own personal helicopter landing pad to be built in Queens with NY taxpayer money. Because, you know, he can't take the 7 train or drive over the Queensboro Bridge like the rest of us.

    Get lost.

    1. LucreLout Silver badge

      Re: Good riddance

      wouldn't accept union jobs.

      No responsible company would accept unionisation - it can only ever lead to strife, expense, conflict, and disunity.

  2. Frumious Bandersnatch Silver badge

    They could just go to the real Amazon

    I hear that Bolsonaro is more than willing to raze it to the ground to attract investment in the region.

  3. Dave 13

    Ditched

    Amazon should have gone with Austin, Dallas or Raleigh - places that actually wanted them. Instead Amazon chose a toxic place simply to be near Bezo's NY home. Wonder what effect the divorce will play in any eventual HQ2 decision?

    1. Warm Braw Silver badge

      Re: Ditched

      It's not just a case of being wanted or not.

      I don't imagine Queens is as pricey a location as Manhattan, but I'd have thought you could have saved considerably more money than was being offered in bribesincentives, both in property costs and salary costs, by setting up shop in the big empty bit away from the coasts.

      That's how the market's supposed to work - pricing people out when demand is too high. I thought most Americans believed that subverting the market was a form of demonic socialism? "Traditional" residents of San Francisco don't seem to get the same breaks in their accomodation costs.

      1. Yet Another Anonymous coward Silver badge

        Re: Ditched

        >both in property costs and salary costs,

        Same reason that NY didn't need to make a deal.

        Come to Queens and have a local market of a million programmers or open your new AWS development office in des Moines, and see how much more than $45K/job it costs you to recruit and lure programmers away from the coasts.

      2. BillG Silver badge
        Pirate

        The Story from Queens

        There's a lot of PR spin being thrown around, but family I have in Queens tells another story. The unions really, really, really wanted Amazon to be a union shop despite the fact that the Amazon jobs were going to pay $100K+. Unions in Queens and all over the USA are losing $$$ and power and this was seen as the Queens union's last ditch stand to regain power. It was an all-or-nothing gamble and the unions lost.

        NYC unions really thought they could put their foot on Amazon's throat and force them to be a union shop. Local politicians were recruited to force the union issue. RUMOR - and its just a rumor - is that union construction workers would refuse to build Amazon's HQ unless Amazon surrendered to the unions. Amazon was also expected to $how their $urrender to the union$ by $howering union organizer$ with the proper re$pect every year.

        This was rumored to bring a total of 25,000 jobs to the area. I don't know if that includes the increased business to restaurants, delis, hotels, car dealerships - you name it.

        Yeah, it cost the state $3billion but how else is NYC going to bring in so many jobs in such a short period of time? Long Island has been financially struggling since Grumman left. What used to be family suburbs has turned into ghettos. MS-13 gangs are at LIRR stations selling drugs, shaking down commuters, and trying to recruit new members. It's a mess.

        Now politicians are frantically trying to spin this. An unemployed family doesn't give a rat's ass how much money the state has to pay, as long as they can put food on their own tables. Now politicians have to answer to angry voters who believe employment is #1 and don't care what the state did to get them.

        Now NYC politicians have to explain to the voters how turning down 25,000 jobs is a GOOD thing? You can't sell that - not even with free 2-day shipping.

      3. LucreLout Silver badge

        Re: Ditched

        I'd have thought you could have saved considerably more money than was being offered in bribesincentives, both in property costs and salary costs, by setting up shop in the big empty bit away from the coasts.

        Sure, it'll be a lot cheaper, but can you get the skills in the volume required? Unfortunately there's a reason why high skill enterprises tend to cluster together.

        "Traditional" residents of San Francisco don't seem to get the same breaks in their accomodation costs.

        "Traditional" residents probably already have rent control in SF.

        Objecting to high skill high wage employers moving into an area because they require skills you don't have is, ultimately, just the politics of envy.

  4. M.V. Lipvig

    As long as they stay on a coast

    We don't want that disaster in middle America.

  5. DougS Silver badge

    Great

    Now they will start that beauty contest (and bidding war) all over again. This is why we need a law making tax breaks to bring businesses to your city or state illegal. Its a race to the bottom that big business exploits all too well - and only big business need apply. A small business owner that might generate 50 jobs won't get a penny of tax break, even if at $45,000 per job he should theoretically be eligible for over $2 million if they treated him the same way they treat Amazon!

  6. Erik4872

    This happens all the time

    I live near NYC, and it would have been nice to have another source of semi-stable employment to choose from. However, I think NYC actually made the right decision. The list of requirements and tax abatements that the city and state would have had to provide is astronomical. Long Island City (where they were planning on going) is crowded and has a public transport problem that isn't easily solved. It's right next to a very large housing project, so you know Amazon would eventually demand 10 square blocks cleared out to build their "techbro fortress".

    I think New York was desperate to win one of these "corporate HQ beauty contests". For those not in the US, this happens every single time a company is thinking of expanding or doesn't get exactly what they want tax-wise from their HQ city. We in NY have high taxes and a pretty high cost of living compared to just about anyplace other than California. We _always_ lose these beauty contests because Texas, North Carolina, Georgia and Florida bend over backwards to accommodate large corporations' every demand. Even if the HQ doesn't move, they move thousands of paper-pusher jobs to these cheaper locations that offer to build them buildings, give them free taxes, utilities and infrastructure, etc.

    It would have been nice but $3 billion is a LOT of money to just give to an already rich company. Nothing wrong with a few incentives, but just bending over and asking what Amazon wants isn't smart either. I'm assuming they're going to pick Dallas or Atlanta.

    1. Jellied Eel Silver badge

      Re: This happens all the time

      Why not Flint, Michigan? I've been watching a Netflix doc showing the police trying to police there, and it's a bit mind boggling what's happened to that city. And as a result, it's a place that looks like it's got a lot of cheap real-estate & crying out for investment. Ok, so you might need to bribe staff to move there, but it'd be a lot cheaper for them to live than property prices in NY, or especially SF & Seattle. But for a spot of corporate welfare, it'd make positive PR investing there. Especially with funding for schools & tech colleges to invest in the people.. And that's probably tax efficient as well.

      Another aspect that puzzles me is there seems to be little auditing to see if promised benefits ever actually materialise, eg New Jersey and the billions spent on Tesla's Gigafactory, that's apparently mostly empty.

      1. Erik4872

        Re: This happens all the time

        Basically all of the Rust Belt is in the same spot. Some cities have managed to bounce back...you could even say Detroit is at least on the right path now. The problem is image. I grew up in Buffalo which got hit very hard by offshoring and de-industrialization when I was young. I'm sure most of these cities submitted bids. Here's the problem...Amazon hires trainloads of new computer science grads and those new grads want the unattached hipster big-city lifestyle. Look at how much rent is in downtown Seattle or San Francisco. The new grads want nothing more than to work 90 hours a week in a preschool office space, then walk across the street to their $4500/month luxury studio apartment or spend time at the trendy shops and restaurants you know Amazon would have demanded be placed around its new HQ. Replicating that in a "regular" city would be artificial at best.

        It's a shame because you're right...real estate is cheap and the people are very nice. But the most these cities ever get is call centers or mundane paper-processing centers. The executives don't want to live there and they know they can't attract "top talent" fresh out of school.

        1. phuzz Silver badge

          Re: This happens all the time

          The irony is though, if (for example) Amazon moved their HQ to Buffalo, the increase in potential customers would start to bring in all the vegan coffee shops, and wellness clinics*, that the hipster staff could want. Eventually you'd get other tech companies moving into the area as well.

          Of course they'd also start an increase in rents and prices, but hopefully not to SF levels.

          * Am I doing ok at making up bullshit?

        2. Jellied Eel Silver badge

          Re: This happens all the time

          It's a shame because you're right...real estate is cheap and the people are very nice. But the most these cities ever get is call centers or mundane paper-processing centers. The executives don't want to live there and they know they can't attract "top talent" fresh out of school.

          Yep, it's very short-sighted thinking. Flint and other Rust Belt cities grew to feed employers based there. GM pulled out, city goes into rapid decline. But reversable with some investment. I know people who've been working for Google and other SF employers who're desperate to move away from $4500 rents, especially when they're looking at starting families. Something is wrong when people on 6-figure salaries can't afford to live there.

          So needs some marketing, but $4500 rent on a small apartment vs $200k buying you a large house outside Sillycon Valley is a bit of a no-brainer. Talent should be attracted by much cheaper cost of living, and cynically, can also mean reduced payrolls and wage pressures. Then being a key employer/investor, there's a chance to shape the city's future. So invest in the education system and create your own talent pool, which would naturally include some top talent. Then there'd be other employment opportunities, like opening bars and shops to extract cash from the high earners.

          1. ST Silver badge
            Devil

            Re: This happens all the time

            > $4500 rent on a small apartment vs $200k buying you a large house outside Sillycon Valley is a bit of a no-brainer

            So, when are you moving to Kentucky?

            You know, there's more than a $200K McMansion to the decision about where one wants to live.

          2. Erik4872

            Re: This happens all the time

            "I know people who've been working for Google and other SF employers who're desperate to move away from $4500 rents, especially when they're looking at starting families."

            We'd need the Second Dotcom Bubble to pop before it will make any difference. Companies are 100% bought into the idea that "disruption-enabling" tech talent only lives in Seattle, SF/SV and maybe NYC or Boston. Otherwise, why would they be paying $200K+ for SREs and developers even if they are swimming in more money than they can ever possibly spend? The tech companies are desperately trying to hang on to their top people, and whether or not it's true there is this perception that top tech talent is only interested in lavish upscale city living.

            Even where I am in suburban NYC, around me the IT scene is quite boring...healthcare, education, a couple IT service providers and a handful of old-school companies that actually make physical products if you can believe it. If I wanted a Dotcom Bubble job I'd have to get on the train and go to the city...something I've managed to avoid since...surprise...I have a family that I'd like to see once in a while and a 3 hour daily commute isn't compatible with that.

            What I think will happen is what you're describing...this latest crop of new grads will get tired of working crazy hours, might develop a life outside of the office and want to start families. I'm involved with a lot of AWS and Azure projects and I can tell Microsoft and Amazon are running their engineers ragged pumping out service after service every 2 weeks. Even the smartest, most work-focused people out there have a limit.

          3. Anonymous Coward
            Anonymous Coward

            Re: This happens all the time

            "Talent should be attracted by much cheaper cost of living, and cynically, can also mean reduced payrolls and wage pressures."

            When IBM used to rule everything, this was their strategy. They would set up engineering locations just far enough away from major metropolises that real estate was cheap and they had a near lock on the talent market. Off the top of my head, I can think of Boulder, CO, Burlington, VT, Binghamton, NY and Rochester, MN. Because IBM was a lifetime employer, they'd just import everyone when setting up these locations and it was expected that you spend time during your career in multiple locations. Execs were happy because they could pay less and were still within a few hours' drive from the locations so they felt they had control. I know a few ex-IBMers from the pre-90s era and they confirm this. They'd pay to move you and your family, invest heavily in the local community and basically control the labor market. Unfortunately in this era companies don't have the same power over individuals and they're fixated on locating in expensive cities.

            1. Yet Another Anonymous coward Silver badge

              Re: This happens all the time

              >Because IBM was a lifetime employer

              Things are different now.

              If I move to work in Flint Mi, I am stuck with you, I have to be very sure of the future to put down roots in a one job town. If I'm in SF or NY, or Austin/Portland/Seattle I can job switch every 18 months for a 25% raise or if I don't like the coffee.

              IBM also did this in the days when only the husband worked. I take the job in Idaho what does my wife do? Whereas in NY/SF/etc we can both get a job.

              1. Michael Wojcik Silver badge

                Re: This happens all the time

                There are plenty of IT employers in Michigan's Lower Peninsula.

          4. Michael Wojcik Silver badge

            Re: This happens all the time

            $4500 rent on a small apartment vs $200k buying you a large house outside Sillycon Valley is a bit of a no-brainer

            $200K? In much of Michigan, you can buy a large home for $100K or less. Property values have improved a lot since 2009, but they're still really low compared to most of the country.

            Mildly adventurous hipster types could buy mansions in Detroit for five figures. A quick Zillow search turned up dozens of 5- or 6-bedroom historic houses for $100K or less. The Lansing market is healthier, but just as an example there's a historic brick 4-bedroom, 3000 sq ft home in Jackson for sale at just under $100K. And Lansing has a lot of IT workers, including recent grads from Michigan State and the other nearby universities.

            In Flint? Well, if you like that sort of thing, here's an attractive 4-bedroom storybook-Tudor in a residential neighborhood for $60K. Or less than what many people around here will pay for a pickup truck.

            And frankly, Michigan is quite nice to live in, in many ways. Generally low cost of living (except frickin' auto insurance, which alas is the highest in the nation). Very little urban sprawl. Tons of outdoor activities, thanks to all the forests and lakes. Excellent local foodstuffs. And if you're not some sort of feeble wuss, winters aren't bad at all - I'll take a Lansing-area winter over Boston's or New York's any year.

            So, yeah. Michigan and the rest of the Rust Belt would have a lot to offer employees. But Amazon was never serious about going anywhere except the sort of coastal urban areas its execs want.

    2. Pirate Dave
      Pirate

      Re: This happens all the time

      "I'm assuming they're going to pick Dallas or Atlanta."

      I'm hoping it's Dallas. I live just outside of Atlanta, and the place is already a 50-mile wide rolling mess, and spreading its palsied grip further every year. We've got enough here in Georgia, thanks. I hear Texas is nice this time of year. (P.S. - buy UPS and take them with you).

  7. Mattmattic

    Union officials campaign against jobs?

    Yeah. Happens every day. Union officials campaigning against new jobs in their area.

    The trick is to work out what bribes the union officials want and to keep them sweet.

    1. LDS Silver badge

      Re: Union officials campaign against jobs?

      Why they should like a company that explicitly said it was there to crack unions?

      "“No, sir, we would not,” Huseman answered tersely, responding to Johnson’s repeated questions about whether the company would remain neutral if its employees tried to unionize.

      (https://nypost.com/2019/01/30/amazon-says-it-will-oppose-workers-efforts-to-unionize-in-new-york/)

      "“Would you agree to neutrality if workers at Amazon wanted to unionize?” the speaker of the Council, Corey Johnson, asked early on. “No, sir,” Mr. Huseman said.

      (https://www.nytimes.com/2019/01/30/nyregion/amazon-queens-nyc-council.html)

      In more democratic countries, that question would have been not even needed. Amazon behaviour would be simply illegal.

      1. Jove Bronze badge

        Re: Union officials campaign against jobs?

        Union Locals whiter than white - another unicorn.

    2. Eddy Ito Silver badge

      Re: Union officials campaign against jobs?

      I don't know about New York but in Philly it isn't uncommon for different unions to get into a spat

  8. ParasiteParty
    Thumb Up

    Fantastic Decision!

    Lets hope this is 'Peak Amazon' and finally the scumbag billionaires are put in their place by the not-so-scumbag politicians.

  9. UberMunchkin

    Screw Amazon. Their business practices, especially around this HQ2 debacle would be illegal in most other countries.

    It's not like they need a tax break to cover the cost of building a HQ anyway, didn't they just pay 0% Tax in the USA for the past year.

    1. Anonymous Coward
      Anonymous Coward

      It's not that the bidding to move EMA from London was much better... cities were bidding to give even more privileges to what are already highly privileged workers handsomely paid with taxpayers money.

      Anyway, we now know why Bezos needed an helipad....

  10. Eddy Ito Silver badge

    We're not sure where the 70 per cent figure came from...

    If I may, they are likely referring to the poll conducted on their behalf by HarrisX.

  11. Steve Crook

    BoJo Solution

    Perhaps they'd like to part fund Boris Island, then Bezos could have an entire airport to land on and have special access to the proud new UK as it sails into a proud buccaneering future post Brexit...

  12. LucreLout Silver badge

    Another envy driven article!

    the final deal was one of the largest ever tax breaks that New York had given to a company

    What bigger company should NYC give the largest ever tax break too?

    Now, if your argument is that there shouldn't be any tax breaks, that's fine, it's not an argument I agree with, but at least it makes some sort of sense.

    And Amazon CEO Jeff Bezos was to get his own helicopter pad

    This is where things start sounding like envy rather than reason.

    That figure is more than the federal government spends on housing, education, or infrastructure.

    And here we've slipped straight into politics, which is all too often the opposite of reason.

    without drawing up sweetheart deals and giving them political backing, America's corporations will simply go elsewhere and take their jobs and investment with them

    Whatever your feelings about life in a competetive environment, the reality is that in a competetive environment, you have to compete. Real life doesn't do paticipation medals.

    1. wayward4now
      Linux

      Re: Another envy driven article!

      "Whatever your feelings about life in a competetive environment, the reality is that in a competetive environment, you have to compete. Real life doesn't do paticipation medals."

      I'd like to add AMEN! to that.

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