Amazon cancels plans for New York headquarters

BY Dan Berthiaume

Start spreading the news Amazon is not making a brand new start of it in old New York.

In a blog post, the e-tail giant announced that after much thought and deliberation it will no longer move forward with opening a new headquarters in the Long Island City section of Queens, New York.

While polls show that 70% 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 says in the blog post.

Although Amazon is not building the new headquarters in New York, the company said it will continue adding to its base of more than 5,000 employees in the boroughs of Brooklyn, Manhattan, and Staten Island. Amazon also said it will not reopen the search for its second headquarters, which have come to be known as HQ2, at this time.

“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, New York,” said Mark Hamrick, senior economic analyst, “This outcome could also prompt other businesses to think twice before setting up shop or expanding in the region.”

The principal analyst at eMarketer, Andrew Lipsman, commented that even if New York doesn’t get the imprimatur of a second or third Amazon headquarters, he would be be very surprised if the online giant fails to significantly grow its presence there in the coming years.

“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,” he said.

The e-tail giant will proceed as planned with its other new headquarters slated for Crystal City, Virginia. Amazon is investing approximately $2.5 billion in the Northern Virginia office, which will be housed in a 4 million-sq.-ft. energy-efficient space, with the opportunity to expand to 8 million-sq.-ft. The Crystal City office has an estimated incremental tax revenue of $3.2 billion over the next 20 years. Average wages there will exceed $150,000, with hiring of a planned 25,000 employees beginning this year.

Amazon had also planned to invest $2.5 billion into the Long Island City location, which would have had the same square footage, energy efficiency and expansion potential as the Crystal City office. The New York location had an estimated incremental tax revenue of generating more than $10 billion over the next 20 years. Average wages and hiring plans were also the same as for Crystal City.

Amazon also said it will continue with a planned new “Center of Excellence” in Nashville, and continue to hire and grow across its 17 corporate offices and tech hubs in the U.S. and Canada.



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