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Amazon reconsiders New York headquarters over local opposition

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Reuters
Published
today Feb 9, 2019
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Amazon.com Inc is reconsidering locating part of its new headquarters in New York because of local opposition, the Washington Post reported on Friday, citing two people familiar with the retailer’s thinking.


Photo: Reuters


The company had not yet purchased or leased any land for the project there, which would make it easy to scrap its plans, the unnamed individuals told the Post, which is owned by Amazon Chief Executive Jeff Bezos.

Amazon executives have had internal discussions recently to reassess the situation in New York and explore alternatives, the Post reported.

Amazon did not immediately reply to a request for comment. Its shares were down around 2 percent on Friday.

In November, Amazon said it would branch out from its home base in Seattle with plans to create more than 25,000 jobs in both New York City and an area just outside Washington, D.C.

The world’s largest online retailer plans to spend $5 billion on the two new developments in Long Island City, in New York’s Queens borough, and in Arlington, Virginia, and expects to get more than $2 billion in tax credits and incentives with plans to apply for more.

Amazon has mailed flyers to Queens residents touting the economic benefits of its New York expansion, trying to blunt opposition from some local lawmakers who said Amazon received too many tax and other benefits.

Some residents in the rapidly transforming Long Island City neighborhood across the East River from midtown Manhattan’s skyscrapers have loudly opposed Amazon’s plan. They say they fear more crowded subway stations, an overburdened sewage system and rent increases that would drive out long-time residents.

“I would be happy not to have them,” said Terri Gloyd, the co-owner of the LIC Corner Cafe. “I think most of the neighborhood hasn’t wanted them here.” She said her neighbors may have given the prospect of Amazon a warmer welcome had the subsidy package not been so large.

A critic of the plan, Queens lawmaker Senator Michael Gianaris, was appointed to a state senate panel that has the power to block Amazon’s campus, local media including the New York Times have reported.

City council speaker Corey Johnson told local radio he is looking at subsidies for Amazon and that the plan is not yet final. One point of contention could be Amazon’s opposition to labor unions.

U.S. Congresswoman Alexandria Ocasio-Cortez, whose district spans parts of Queens and the Bronx, has also criticized Amazon.

In one sign of opposition, artists spray-painted Amazon’s logo - spelled “AMAZNO” - on streets near the proposed site.

New York Governor Andrew Cuomo and New York City mayor Bill de Blasio support Amazon’s plan.

The split second headquarters, which Amazon called HQ2, attracted 238 proposals from across North America in a year-long bidding war.

Amazon ended the frenzy by dividing the spoils between the two most powerful U.S. East Coast cities and offering a consolation prize of a 5,000-person center in Nashville, Tennessee.

At the outset of its search last year, Amazon said it was looking for a business-friendly environment. The company said it will receive performance-based incentives of $1.525 billion from the state of New York, including an average $48,000 for each job it creates.

It can also apply for other tax incentives, such as New York City’s Relocation and Employment Assistance Program that offers tax breaks potentially worth $900 million over 12 years. What benefit the company would actually get was unclear.

Alphabet Inc’s Google said in December it would invest more than $1 billion on a new campus in New York, becoming the second major technology company to pick America’s financial capital to expand and create thousands of jobs.

© Thomson Reuters 2019 All rights reserved.