The New York neighbourhood of Long Island City was one of two locations Amazon selected last year after a long search for a second headquarters or "HQ2."

People stand in the lobby for Amazon offices Thursday, February 14, 2019, in New York. Amazon will not build a new headquarters in New York City, a stunning reversal to an ambitious plan that would have brought an estimated 25,000 jobs to the city.
People stand in the lobby for Amazon offices Thursday, February 14, 2019, in New York. Amazon will not build a new headquarters in New York City, a stunning reversal to an ambitious plan that would have brought an estimated 25,000 jobs to the city. (AP)

Amazon abruptly dropped plans Thursday for a big new headquarters in New York that would have brought 25,000 jobs to the city, reversing course after politicians and activists objected to the nearly $3 billion in tax breaks promised to what is already one of the world's richest, most powerful companies.

"We are disappointed to have reached this conclusion — we love New York," the online giant from Seattle said in a blog post announcing its withdrawal.

"While polls show that 70 percent 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," Amazon said.

Lost economic opportunity 

The stunning move was a serious blow to Governor Andrew Cuomo and Mayor Bill de Blasio, who had lobbied intensely to land the project, competing against more than 200 other metropolitan areas across the continent that were practically tripping over each other to offer incentives to Amazon in a fierce bidding war the company stoked.

De Blasio sounded bitter about the reversal of a deal clinched after months of negotiations.

"We gave Amazon the opportunity to be a good neighbour and do business in the greatest city in the world.
Instead of working with the community, Amazon threw away that opportunity," the mayor said in a statement.

"If Amazon can't recognise what that's worth, its competitors will."

Cuomo meanwhile lamented that "at a small group politicians put their own narrow political interests above their community" to pressure Amazon to withdraw.

He said the state Senate, which appointed an Amazon opponent to a key board, "has done tremendous damage" and "should be held accountable for this lost economic opportunity."

Democratic Representative Alexandria Ocasio-Cortez, New York City's new liberal firebrand, exulted over Amazon's pullout.

"Today was the day a group of dedicated, everyday New Yorkers and their neighbours defeated Amazon's corporate greed, its worker exploitation, and the power of the richest man in the world," she tweeted, referring to Amazon CEO Jeff Bezos.

The swift unraveling of the project reflected growing antipathy toward large technology companies among liberals and populists who accuse big business of holding down wages and wielding too much political clout, analysts said.

"This all of a sudden became a perfect test case for all those arguments," said Joe Parilla, a fellow at the Brooking Institution's Metropolitan Policy Project.

Amazon ultimately decided it did not want to be drawn into that battle.

Amazon announced in November that it had chosen the Long Island City section of Queens for one of two new headquarters, with the other in Arlington, Virginia. Both would get 25,000 jobs. A third site in Nashville, Tennessee, would get 5,000.

The company had planned to spend $2.5 billion building the New York office, choosing the area in part because of its large pool of tech talent.

The governor and the mayor had argued that Amazon would transform the neighbourhood into a high-tech hub and spur economic growth that would pay for the $2.8 billion in state and city incentives many times over.

Not looking for a replacement 

In pulling out of New York, Amazon said it isn't looking for a replacement location "at this time." It said it plans to spread the technology jobs that were slated for New York to other offices around the US and Canada, including Chicago, Toronto and Austin, Texas. It will also expand its existing New York offices, which already have about 5,000 employees.

Amazon faced fierce opposition over the tax breaks, with critics complaining that the project was an extravagant giveaway — or worse, a shakedown — and that it wouldn't provide much direct benefit to most New Yorkers.

The list of grievances against the project grew as the months wore on, with critics complaining about Amazon's stance on unions and some Long Island City residents fretting that the company's arrival would drive up rents and other costs.

Opposition to the deal was led in the Democrat-controlled state Senate by Michael Gianaris, the chamber's No. 2 lawmaker, whose district includes Long Island City. Initially among the politicians who supported bringing an Amazon headquarters to the city, Gianaris did an about-face after the deal was announced, criticising the secrecy surrounding the negotiations and the generous incentives.

Earlier this month, Gianaris was appointed to a little-known state panel that could have ultimately been asked to approve the subsidies.

It is unclear whether the City Council had any power to scuttle the deal. But City Council members held hearings at which they grilled Amazon officials about the company's labour practices, its contract with Immigration and Customs Enforcement to provide facial recognition technology and other issues.

A Quinnipiac University poll released in December found New York City voters supported having an Amazon headquarters 57 percent to 26 percent. But they were divided over the incentives: 46 percent in favour, 44 percent against.

Amazon had not acquired land for the project, making it easy to scrap its plans, a person briefed on the matter told Reuters on Friday.

Source: TRTWorld and agencies