Amazon Abandons Plans for Second Headquarters in New York

Posted on February 14, 2019 by Paul Thurrott in Amazon with 50 Comments

Facing mounting criticism about its unsustainability, Amazon announced today it will no longer open a second headquarters in New York 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,” an uncredited Amazon announcement explains. “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.”

Amazon, as you may recall, instituted a public search for its second headquarters, during which time it played various cities against each other, with most applicants promising a wide array of tax breaks and other incentives. New York’s offer was particularly extravagant, raising hackles with many. It even promised Amazon CEO Jeff Bezos a private helicopter pad.

For now, however, Amazon says it will not reopen its search for a location for its second headquarters, but will instead continue forward with less dramatic expansions in Northern Virginia and Nashville. Amazon will also continue growing across its 17 corporate offices and tech hubs in the U.S. and Canada, and will still expand its footprint in the New York City area, where it currently employs about 5,000 workers.

But Amazon had originally planned to hire 25,000 employees for its second headquarters and revitalize the area in which the facility would be located. It hadn’t yet purchased any land, fortunately, making the reversal an easier process.

Contrary to Amazon’s stance, it wasn’t just local politicians that opposed Amazon in New York City: Unions and local groups and inhabitants protested the move. And polls, despite what Amazon claims, were not at all positive.

“Like a petulant child, Amazon insists on getting its way or takes its ball and leaves,” New York State Senator Michael Gianaris said of Amazon’s news. “The only thing that happened here is that a community that was going to be profoundly affected by their presence started asking questions.’’

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Comments (61)

61 responses to “Amazon Abandons Plans for Second Headquarters in New York”

  1. Avatar

    graham best

    Not only did New York shut out Amazon, but it served a warning to any corporation looking to expand to New York.

    • Avatar

      evox81

      In reply to Graham Best:

      New York (the NYC metro in particular) is unique in how corporations look at it. The NYC metro is either appealing to a company, or it isn't; because a company either needs to be there, or it doesn't. This won't hurt future prospects any more than it will help them.

      • Avatar

        captobie

        In reply to evox81:

        Exactly. From an economic standpoint big cities in general are terrible places for corporations, yet many choose to locate themselves in NYC, LA, Chicago, etc. If you ask them why, more often then not they’ll talk about attracting the best talent. Employees want to live in these places (and let’s be honest, when a company talks about the ‘best talent’ they mean young and single - the type of person who is most attracted to big city life).

  2. Avatar

    codymesh

    So this is Amazon. Give us a helipad, or we won't build. And we'll blame you for the job losses - because this is totally about the jobs and not about socialism for the rich. Oh and we won't be paying any taxes either.


    Clearly a great company with great values.

  3. Avatar

    waethorn

    Trump took the 35% corporate tax and reduced it to 21%, but Amazon paid 0%. And yet they still asked for 1% back in an income tax return.


    Trump initiated the corporate tax rate to give incentives to businesses to keep jobs in the US. The swamp creatures in the GOP wouldn't let it fly without keeping a whole bunch of tax loopholes in it, "...because regulations are bad". So the crony Capitalists took Trump's fish and slapped him over the face with it.

    • Avatar

      lvthunder

      In reply to Waethorn:

      How do you know how much they paid in taxes? Do you work for the IRS?

      • Avatar

        Greg Green

        In reply to lvthunder:

        Amazon Didn't Pay Any Federal Income Taxes in 2017, Seattle Business Magazine


        Amazon Will Pay a Whopping $0 in Federal Taxes on $11.2 Billion Profits, Fortune


        Amazon will pay $0 in federal income taxes for the second year in a row, The Week


        Amazon paid no federal taxes for the second year in a row, Fox Business


        “The world’s largest online retailer, which is worth $795 billion, earned a record $11.2 billion in U.S. profits, according to the company’s U.S. Securities and Exchange Commission (SEC) filing earlier this month, yet did not pay the 21 percent U.S. corporate tax, thanks to leveraging unspecified tax credits and stock-based compensation deductions.”


      • Avatar

        provision l-3

        In reply to lvthunder:

        Publicly traded companies have to report their finances publicly. If you have have a bunch of free time you can view their filings with the SEC. I believe it is the 10k that would have the tax disclosures.

        www sec gov /Archives/edgar/data/1018724/000101872419000004/0001018724-19-000004-index.htm


  4. Avatar

    provision l-3

    This likely could have been avoided had Amazon not made such a public spectacle of finding a locating for HQ2.

  5. Avatar

    waethorn

    They paid zero taxes, even without including the tax incentives that New York had offered them, and claim that the government still owes them a return.


    Meanwhile, they continue to build their business close to the government with surveillance technology. Think Alibaba's ecommerce company working under the rule of the Chinese government is bad? They don't have their own electronics line, or "AI" technology. Amazon does. Amazon is the one-stop shop for state spycraft.

  6. Avatar

    Stoicjim

    And all the Amazon execs who bought condos in the area in advance? Bwahahahahaha.

  7. Avatar

    dcdevito

    As a New Yorker I see both sides of the issue. As a New York taxpayer it makes me angry that us in the middle class never see those kinds of tax benefits, but this will not help

  8. Avatar

    wright_is

    Sorry, I can understand tax benefis and subsidies to promote new businesses, but rewarding a company that is renowned for doding taxes with tax payers money is just ludicrous.

    • Avatar

      ugaco07

      In reply to wright_is:

      They should pay more taxes than they are required under the law? Doing something illegal to avoid paying taxes is one thing, but there is no problem taking advantage of all of the lawful deductions, credits, etc that allow you to lower you effective tax rate. We all do the same thing with our personal taxes, no reason to fault a company for doing the same.

    • Avatar

      prjman

      In reply to wright_is: How so? What crimes has Amazon been charged with? All companies avoid taxes whenever possible.


      • Avatar

        wright_is

        In reply to prjman:

        I never said they did anything wrong, I said that they dodged taxes, paying as little as possible, so that they have a few billion sitting in the bank. A company less in need of a government subsidy is hard to find, well, maybe apart from Google and Apple.

        I can understand using tax payers money to help new businesses get a footing and build up, but a company that could cancel a lot of the city's debt out of petty cash? No.

        • Avatar

          prjman

          In reply to wright_is: The phrase 'tax dodge' means 'an illegal method used to reduce the amount of tax that a person or company has to pay.' I'm sure Amazon, like any person or company, makes every effort to reduce it's legal tax obligation. Any well run company should.

          Companies do NOT have an obligation to cancel out a city's debt


          • Avatar

            wright_is

            In reply to prjman:

            I never said they should cancel the cities debt. I just pointed out, a company that has enought of a plus on its books to cancel the debt of a city has no need to cause the city to create more debt to pay for its headquarters.

          • Avatar

            jimchamplin

            In reply to prjman:

            If they’re going to screw the inhabitants of said city with their awful employment practices and shitty working conditions, yeah, they should be on the hook for something.


            Honestly, these corporations should be obliged to put a portion of their profits - say 40% - toward the communities that they affect.


            No loopholes. If they’re going to get tax breaks, then they should be made to pay any way possible.

            • Avatar

              lvthunder

              In reply to jimchamplin:

              It's a headquarters, not a factory or warehouse. They don't have awful employment practices, and shitty working conditions there.


              Corporations help the communities by giving the people in those communities jobs.

            • Avatar

              prjman


              How will they 'screw' the inhabitants of said city? If their pay is so terrible, and their working conditions so deplorable, I'm sure no one will want to work for them. Job seekers have that option.


  9. Avatar

    Usman

    Why do people want American cities to subsidise one of the most valuable companies in the world. They don't need a tax payers subsidised helicopter pad for Jeff Bezos ego. Is this a defendable position?

    • Avatar

      lvthunder

      In reply to Usman:

      The people don't. The companies and the government do. Look now that Amazon pulled out New York loses 25,000 jobs and the taxes those jobs would have brought. The politicians love using their power to play favorites. That's why there isn't a flat tax. Amazon wants to operate as cheaply as possible so they played cities against each other.

    • Avatar

      prjman

      In reply to Usman: New York, specifically, has to rely on massive incentives for corporations as their tax structures are very unfavorable, both for the company and the company's future employees. All things being equal, a national or international company would be much better off locating in a more business friendly state.


  10. Avatar

    prjman

    Congratulations to whatever city ends up with the project. More jobs somewhere else. I'm sure the governor will blame Florida again.

  11. Avatar

    Darekmeridian

    While I don't live in this area anymore, I did for a few years and I still have friends and some family (brother) who still live there now. I have heard nothing but upset about this for the last few months. The area is finally coming back after years of being forgotten (main reason I left) and most of the people think Amazon is going to drop a giant warehouse there with nothing but minimum wage jobs. There was a lot of confusion and misinformation about the plans and what was going to happen with the community. The problem was city & state officials and local politicians tried to sneak this one in thru the backdoor without telling the actual residents what to expect and they had a last minute knee-jerk reaction, once it started getting major press and became public there were protests and demonstrations that very little of the main-stream media is talking about. By the time they actually sat down with the residents to most people wanted nothing to do with the deal.



    In short this was just handled poorly.


    • Avatar

      prjman

      In reply to Darekmeridian: It was a corporate headquarters. My guess is that it had more than a few 'higher than minimum wage jobs' in it. What is wrong with 'minimum wage jobs' anyway? Do we not want those available?


      • Avatar

        Darekmeridian

        In reply to prjman:

        Well from what I was hearing that was part of the confusion, everyday people who don't really follow this stuff just hear Amazon is moving into the neighborhood. Then a lot of assumptions are made that may or may not be true. My personal feeling is the community wasn't informed well about what was planned, until towards the ending months/weeks of the deal. I am not arguing the merits of the deal on either side, but if it was approached better there would have been a better outcome.


        Imagine if you came home from work one day and found out you wife/husband sold your car and didn't bother to mention it to you. Even if she got 10X the worth wouldn't you feel better that you were included.


  12. Avatar

    Will McClenaghan

    I just listened to the latest What the tech, and I thought Andrew had some interesting thoughts on this, but someone kept interrupting with his own thoughts and opinions so we never really got to hear what Andrew had to say. Thanks for that.

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