Late last year, Amazon announced the 15-year building plan of HQ2, its second headquarters, in Long Island. The anticipated NYC office campus spiked opposition, support and real estate prices in anticipation of tens of thousands of new workers and salaries averaging at $150,000.
On Valentine’s Day this year, Amazon cancelled the $3.7 billion plan – which would have included a public school, space for technology acceleration and open community facilities with flood-resilient systems, evaporating up to 40,000 jobs and giving up almost $3 billion in tax breaks and corporate incentives.
The reversal not only highlights the risks of speculative real estate investment – including some $8 million of signed real estate contracts and up to $5 million of deals in negotiation – it also elicited a mixed slew of responses ranging from outright dismay to tepid dismissal.
While reactions to the exit are as polarized as the plan’s onset, the quiet consensus is that it’s all hype from start to end and that negative results can only be minimal. Many point out that the reversal is a welcome respite to the straining city infrastructure and services.
For now, Amazon looks to growth agility and on-demand flexibility. Instead of centralized work hubs, Amazon favors growth across its tech hubs in Texas, Massachusetts, Michigan, and in British Columbia. The 5,000 Amazon employees in Staten Island will be augmented for web services, fashion, and advertising.
Much of the suburbs adjoining Long Island City will remain unchanged including some of the most viciously exclusionary practices in the USA. Existing zoning practices will remain, unemployment and population will remain significant, rents will still rise, and Amazon employees will still buy real estate in Queens.
The $3 billion worth of tax breaks and the $505 million worth of capital grants that New York offered to subsidize Amazon – both the mayor and the governor had hoped that shelling out some $3 billion now will bring in $27 billion later – is not hard cash per se, but these are hard enough indicators of room in the state budget to support urgent public concerns and popular public projects.
Regardless of the pros and cons that an Amazon headquarters bring, this historic battle between a corporate giant and one of New York’s prime neighborhoods offers a myriad of lessons to be learned by future tech companies looking to move into the state.