Commentary

Pummeled By Local Activists, Amazon Beats A Hasty Retreat From NYC

A play on a famous New York Daily News headline from 1975 was the  obvious choice for many a publicationwebsite and Tweeter yesterday: “Amazon To City: Drop Dead.” 

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Citing growing political opposition to its plans to open a headquarters for Amazon in Long Island City, Queens, the company yesterday summarily cancelled its plans to add what it claimed would be 25,000 new tech jobs paying in excess of $100,000 a year in return for an estimated $2 billion in tax credits and grants for building new office space. 

“Amazon’s retreat was a blow to Gov. Andrew M. Cuomo and Mayor Bill de Blasio, damaging their effort to further diversify the city’s economy by making it an inviting location for the technology industry,” writes J. David Goodman for the New York Times.

Both Democrats decried the decision. While deBlasio blasted Amazon, Cuomo blamed “a small group of politicians [who] put their own narrow political interests above their community.” 

Amazon attacked the pols, too.

“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,” the company said within a terse statement that put the kibosh on the results of its elaborate -- and inordinately publicized-- search.

There were victors.

“The move was celebrated by the city’s resurgent left,” writes Rick Noack for the Washington Post. “For months, left-wing activists and politicians in the chosen borough of Queens had protested against Amazon’s decision, which they argued would result in a rise in living and housing costs and strain an already overburdened infrastructure.”

“Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world,” tweeted congresswoman Alexandria Ocasio-Cortez. 

But, as WaPo’s Noack points out, the opposition was not just one of those quirky New York things like paying no attention to traffic signals. 

“In tech hubs around the world, the months-long animosity of Queens residents was likely shared. Tech companies bring in small armies of workers but these are rarely recruited from the neighborhoods in question and the new arrivals drive up prices for locals,” he writes.

Indeed, there were questions about Amazon’s choice of New York from the get-go. And Amazon will be facing increasing scrutiny as it reshapes the world of commerce in its image but, like others in the patroon class, prefers to not pick up the check. 

“Those wondering how many zeros Amazon, which is valued at nearly $800 billion, has to pay in federal taxes might be surprised to learn that its check to the IRS will read exactly $0.00,” Laura Stampler reports for Fortune this morning.

Amazon says it will not reopen the search for another headquarters city. “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.” 

One of those is New York City, of course.

“Even if New York doesn’t get the imprimatur of a second, or third, headquarters, I’d be very surprised if we don’t see the company significantly grow its presence there in the coming years. Amazon’s continued emergence as a media and advertising powerhouse will make it increasingly critical to have a strong physical presence at the nexus of these industries,” writes eMarketer principal analyst Andrew Lipsman in an email to Marketing Daily.

“Amazon, like most tech companies, embraces its failures,” observes David Goldman for CNN Business. He quotes Jeff Bezos saying, “I've made billions of dollars of failures at Amazon.com.” 

But this was a different kind of flop than offering a product (Fire Phone) or service (the Destinations travel business) that people don’t buy. 

“The New York HQ2 saga was a public relations nightmare. It’s the kind of misstep a company as successful as Amazon hasn't experienced. And it's the kind of rejection a company with Amazon's money and influence didn't expect,” Goldman observes.

“They made a big mistake here, but how they recover is an open question,” Nathan Jensen, a professor of government at the University of Texas, tells him. “If they're used to these failures, maybe that experience can help.”

We’ll give Stephen Colbert the final tweet today: “I'll give you this, Amazon: Telling people you're going to Queens and then bailing is one thing New Yorkers can relate to.”

2 comments about "Pummeled By Local Activists, Amazon Beats A Hasty Retreat From NYC".
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  1. John Donohue` from White Tree Software, February 15, 2019 at 11:02 a.m.

    "[Amazon's] check to the IRS will read exactly $0.00,” Laura Stampler reports for Fortune this morning.

    [note: Fortune, which used to be self-named "Capitalist Tool" turns more Left-Collectivist every day.]

    Let's see, "25,000 new tech jobs paying in excess of $100,000"

    25,000 x 100,000 = 2,500,000,000 [$2.5 Billion]
    2.5 Billion x 6.25% (FICA tax) = $156,250,000 paid directly to the Federal Government

    True, FedGov will not suffer, since that flood of tax money will still go into the US Treasury when Amazon locates in another state. But the local economy of Queens will suffer tremendously, because now $2.5 Billion yearly in wages, much of which will be spent locally, has just been obliterated by Lefties.

    Here is the problem: Amazon is aware that their employees are young, hip, prosperous, and active -- they want to live somewhere cool. However, those are the places infested with rabid capitalism-haters.

    Irony: capitalism pays the taxes for the social services those haters love.

  2. Paula Lynn from Who Else Unlimited, February 15, 2019 at 9:17 p.m.

    Rents would double or triple and scant enough public transportation or markets. Besides, Amazon is in a big Whew moment. They also realize they don't need it. Many of those "jobs" will disappear with more computerization and the area would be left with a rotted building and loads of people with no job.

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