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Why Amazon Canceled Its NYC Plans

Feb 15, 2019
Originally published on February 15, 2019 11:57 am
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RACHEL MARTIN, HOST:

Amazon is leaving New York before it ever really arrived. After a long, highly publicized search, New York was chosen as one of two locations for new Amazon headquarters. The other one was just outside Washington, D.C. When the company made that announcement three months ago, the corporation promised lots of jobs and an economic boost for the neighborhood of Long Island City in Queens. But there were protests from activists and local politicians. And now Amazon is walking away. We should also mention Amazon is an NPR underwriter. NPR business correspondent Alina Selyukh joined us to talk about why the deal fell through.

ALINA SELYUKH, BYLINE: The hugest sticking point in all of this for the critics was the fact that the city and the state were offering a really large subsidy package to Amazon - tax breaks of almost $3 billion.

MARTIN: Right.

SELYUKH: Add to that the upset city council. This was really big. Amazon had picked an approval process that involved the mayor and the governor but gave city council no real power over the deal - upset city council.

MARTIN: Right.

SELYUKH: And also in a way, this was a reflection of the rise of the progressive left. Representative Alexandria Ocasio-Cortez had been an outspoken critic, and her district is near the area where Amazon wanted to build the new HQ. And there's something to be said about New York groups really knowing how to mobilize. In this case, housing groups, union groups, all kinds of groups came together at those city council hearings where Amazon was just pummeled. And the supporters had their arguments too. A potential of 25,000 well-paying jobs is nothing to sneeze at - plus in the area of Queens that doesn't really have a tech presence. But supporters weren't as visible as the activists. And really in New York, this played out more like a political fight than a business negotiation.

MARTIN: So can I ask about the argument of AOC. It was just - we don't think Amazon is going to give enough back to our local community. It's not worth it - the tax breaks basically.

SELYUKH: Yes.

MARTIN: So what are we hearing from inside Amazon at this point about what it means for their headquarters expansions worldwide?

SELYUKH: Right. So they're saying they can't really do a project in a place where local elected officials don't want to work with them. And they will not be looking for a replacement location, although certainly other cities are probably calling them now. We saw Chicago officials publicly saying they'd welcome a reconsideration from Amazon. And even back in New York, while Amazon critics celebrated last night, many people were torn about how this played out. Maybe they didn't love the financials of the deal, but they didn't want Amazon to just walk away. We spoke to Chris Hanway, executive director of a Queens-based nonprofit Jacob A. Riis Neighborhood Settlement. And he said he'd kept his mind open about the HQ deal and was sad about the lost job opportunities for Queens residents. But he also said Amazon hasn't been fully forthcoming with answers to some of the questions the local groups had.

CHRISTOPHER HANWAY: I think this is a real lesson for everybody who - whether you're on the organizing side or you're on the corporate side - about the importance of communication.

MARTIN: Communication - so, Alina, just briefly, this is a model for economic development. A lot of cities lure in businesses with tax breaks. Is this going to change anything to that model?

SELYUKH: It's hard to say. The system that does run on tax incentives has existed for a long time. But because this will go down in history as such a high-profile failure to strike an agreement, I'm sure that the activists who opposed taxpayer-funded incentives will forever use this as fodder for the broad campaign against these kind of megadeals.

MARTIN: All right. NPR's Alina Selyukh for us this morning - Alina, thank you.

SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.