Amazon Cancels Plans for New York HQ2

Randy Hofbauer
Digital and Technology Editor
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Amazon Cancels Plans for New York HQ2
Although it has abandoned plans to open a second headquarters in Long Island City, N.Y., Amazon still intends to eatablish an "HQ2" in Arlington, Va.

Amazon has pulled out of its plans to open one of two second-headquarters (HQ2) locations in New York, following local complaints, The New York Times has reported.

The Seattle-based ecommerce giant canceled plans for a development in the Queens neighborhood of Long Island City after "facing an unexpectedly fierce backlash from some lawmakers and unions," the news outlet reported, noting that the company's promised $3 billion in government incentives weren't deserved. Despite increasing support for the company of late, many critics opposed Amazon's New York entry due to its "anti-union practices and for the changes they feared it would bring to [the borough of] Queens," including gentrification and damage to the borough's identity.

"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 we and many others envisioned in Long Island City," Amazon said in a blog detailing the development.

The Times cited State Sen. Michael Gianaris, who was chosen for the state board with veto power over the deal, as saying that the decision "revealed Amazon's unwillingness to work with the Queens community it had wanted to join." He attributed Amazon's pullout to the fact that "a community that was going to be profoundly affected by their presence started asking questions."

It was reported that city and state officials offered Amazon one of the "largest-ever incentive packages" for the return in tax revenue and jobs. The ecommerce company was expected to bring 25,000 jobs to Long Island City.

"We are disappointed to have reached this conclusion," Amazon said. "We love New York, its incomparable dynamism, people and culture, and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan and Staten Island, and we plan to continue growing these teams."

Amazon first revealed its plans for HQ2 last November, when it said it would open not just one, but two locations for its second headquarters, the other being in Arlington, Va. Amazon said it would invest $5 billion and create more than 50,000 jobs across both locations.

Amazon still plans to build its second headquarters in Arlington, which will be located in National Landing and begin hiring this year. It said it has no intention to reopen a search to replace the planned Long Island City development.

But even with the Long Island City plan scrapped, that doesn't mean New York has heard the last of Amazon's expansion plans, at least one expert believes.

"Even if New York doesn’t get the imprimatur of a second or third headquarters, I’d be very surprised if we don’t see the company significantly grow its presence there in the coming years," said Andrew Lipsman, principal analyst at New York-based market research agency eMarketer. "Amazon’s continued emergence as a media and advertising powerhouse will make it increasingly critical to have a strong physical presence at the nexus of these industries.”

Amazon has more than 575,000 employees worldwide. Under its Whole Foods Market banner, the company is No. 8 on Progressive Grocer’s 2018 Super 50 list of the top grocers in the United States.

About the Author

Randy Hofbauer is the former digital and technology editor of Progressive Grocer. He has more than a decade of experience as a content strategist, researcher and marketer, almost all of it covering CPG retailing. His insights and work have been cited in a nu Read More

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