By James F. Peltz and Johana Bhuiyan

Los Angeles Times

Exit could scare off tech from New York

Amazon’s decision to walk away from New York City could scare off other tech companies considering moving to or expanding in the city. That’s according to experts analyzing the e-commerce giant’s sudden cancellation of plans to build a massive headquarters in Queens.

Julie Samuels, executive director of industry group Tech: NYC, said the city is “playing with fire” with regard to the message it sends to companies that want to come to New York.

New York wants to be seen as the Silicon Valley of the East Coast. New York Mayor Bill de Blasio and Gov. Andrew Cuomo heralded the city’s selection at the time as the biggest boon yet to its burgeoning tech economy and underscored that the deal would generate billions of dollars for improving transit, schools and housing.

— The Associated Press

LONG ISLAND CITY, N.Y. — When Amazon.com launched its nationwide search for a location for a second headquarters last year, cities eagerly lined up, promising primo real estate and plush tax incentives.

But when the e-commerce giant chose the Long Island City neighborhood of Queens as one of its new hubs, the reception was not nearly as welcoming.

Though some locals and politicians hailed the plan and the 25,000 new jobs it would bring, others questioned giving $3 billion in incentives to a company run by the world’s richest man, Jeff Bezos, and asserted Amazon had not done enough to alleviate its impact on the city.

On Thursday, Amazon made clear that it had heard the outcry, and was in no mood to fight it, abruptly announcing it would abandon the Long Island City plan. Amazon said it is not searching for a replacement city.

The decision underscored how, in certain locations at least, there is a heightening skepticism to the decades-old practice of governments showering big companies with perks to gain the added tax revenues and employment the firms provide.

“This is a stunning development, with Amazon essentially giving in to vocal critics who bemoaned the tech giant’s decision to set up a new substantial outpost in Long Island City,” Mark Hamrick, senior economic analyst at Bankrate.com, said.

The Seattle-based company had conducted a much-ballyhooed search for its second headquarters, dubbed HQ2, and in November it announced a decision to split that second headquarters — and its 50,000 jobs — between Queens and Arlington, Virginia, near Washington, D.C.

But other state legislators and community activists objected to the deal without more modifications, saying Amazon had not made sufficient efforts to offset the prospect of higher housing prices and worsening public-transportation woes, among other problems, in exchange for tax breaks and other incentives.

Critics of Amazon in New York objected not only to the notion of subsidies for the company, which had revenue of $233 billion last year, but also to the economic and social disruption they feared.

The critics prevailed in New York, Amazon said.

“For Amazon, 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,” the company said in a statement.

The New York situation stood in contrast to the warm reception Amazon received in Virginia, where Gov. Ralph Northam signed a law last week authorizing up to $750 million in state subsidies for the Amazon facilities there.

Some observers also saw Amazon’s struggle as a national litmus test for how populist forces were increasingly objecting to the local effects of corporations and politicians willing to provide them with tax breaks and other subsidies.

The heavy union element in Queens may have played a role in Amazon’s decision, just as it did when “Walmart gave up attempts to build a store in New York City following similar union and community opposition” a few years ago, said Rebecca Kolins Givan, an associate professor at the Rutgers School of Management and Labor Relations.

On top of the headquarters’ impact on housing and transportation, many New Yorkers felt most of the high-paying jobs would be taken by Amazon workers transferring to Queens and “not available to the people already living there,” she said. “This felt like a 10-ton gorilla coming in from the outside and throwing its weight around.”

Some developers, property owners and local businesses had begun planning for an influx of well-paid workers.

Amazon said Thursday it doesn’t intend to search for another HQ2 location “at this time,” but that it will expand in U.S. and Canadian locations where it already has offices and hubs. That will include adding to its more than 5,000 employees in New York boroughs of Brooklyn, Manhattan and Staten Island, it said.

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