Written by CNBC
The tech-industry giant Amazon terminated plans to build one of two new headquarter locations in Long Island City in the borough of Queens in New York City. The deal would have brought the city new offices employing 25,000 people as well as housing for those workers.
Crystal City, a Virginia suburb of Washington D.C. was selected other headquarter location, and although that deal also faces some resistance from residents, thus far Amazon has made no changes to plans for that location.
Last year, Amazon conducted a public search to select a location for their new headquarters. During a very competitive bidding process, 238 cities across the U.S., Mexico and Canada wooed the tech giant with various incentives, including massive tax breaks and cash grants.
To attract Amazon, New York had promised tax breaks of upward of $1.525 billion and $325 million in cash. Virginia offered $573 million in tax breaks and a cash grant of $23 million. In November of last year, they were announced as the winning cities.
Amazon cited opposition from local and state leaders as the primary cause of their withdrawal from their New York plans, voicing concerns about potentially hostile cooperation moving forward. For months previously, the company faced fierce opposition from city residents and several politicians from both sides of the aisle who were concerned about the effects the headquarters would have on the city. In an interview with CNN business, New York Senator Gianaris said he was concerned that the headquarters would cause large increases in housing prices, worsening the already high rates of homelessness within the city.
There was also concern that Amazon’s presence would cause the closure of nearby small businesses. Additionally, the location of the headquarters themselves would have been in an area previously designated as the site of a future affordable housing project.
New York was criticized for the monetary incentives it had offered to attract the company. Critics said that the money could be better allocated to infrastructure or underfunded education and health systems. Concerns about giving the already enormously wealthy company arguably unneeded money were raised as well.
Objections to the overall ethics of the company were also voiced. Amazon has faced criticism for its treatment of workers, some of whom have reported that the pressure to reach quotas leaves them without time to take bathroom breaks. The company has been accused of pressuring employees into working while injured and failing to provide time off during holidays. Workers also aren’t paid a living wage.
While Amazon has stated that it will not be seeking out a new location as a replacement, the 25,000 jobs will need either to be absorbed into other existing locations or compensated for through several smaller new locations. Other cities which were previously considered would still like to see an Amazon offices established within them in the future and are hoping that Amazon will give them further consideration.