fDi Markets Newswire:

Home / Locations / Why did Amazon return its Long Island delivery?

Who is to blame for Amazon's decision to ditch its planned headquarters in Long Island, New York? Erika Morphy examines the arguments on both sides. 

As one of the most valuable companies in the world, Amazon is used to a certain level of deference from local and national politicians. For example, the controversial beauty contest it staged when searching for a second headquarters in the US was eagerly welcomed by local officials.

The mood changed, however, when the decision was eventually announced and critics loudly voiced their opposition to the New York site. Some local residents and politicians believed the local infrastructure would not be able to meet the demands that Amazon’s headquarters would require. 

There was also an undercurrent of outrage that New York had agreed to offer twice as much in incentives than Virginia, the other state selected for its headquarters. Additionally, labour activists (including unions) opposed hosting Amazon under any circumstances because of what they considered to be its workforce practices.

They're leaving today

Amazon was clearly taken aback over the outcry. Eventually the company concluded it could not achieve what it wanted in New York with such an array of opposition, announcing: “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.”

One misstep that Amazon was accused of was a lack of transparency in the negotiations with the state of New York. The company had insisted on a non-disclosure provision and, even now, the full negotiations have not been publicly revealed, according to Peter Curry, partner in the law firm Farrell Fritz, who also serves on the New York State Economic Development Council. “That doesn’t work well in the economic development process. I do believe the state government should have convinced Amazon that it was in everyone’s best interest to be as transparent as possible,” he says.

New Yorkers thus became suspicious that the state had promised even more incentives than were publicly disclosed – and were also concerned about any promises given to Amazon about new infrastructure.

It appears Amazon executives felt they were being forthcoming in answering questions, however. They had attended two city council meetings and a third had been planned. Encouraged by polls that showed the investment was favoured by 70% of local residents, they had begun working on a hiring plan, people with knowledge of the planning process told the New York Times.

Political concerns

But according to the New York Times and other news sources, the company was disturbed to learn that senator Michael Gianaris, an outspoken critic of the deal, had been nominated to sit on the Public Authorities Control Board, which had the power to kill the project at any point down the road; Amazon was facing about a year of uncertainty until the board gave its final okay. (After Amazon’s decision to abandon the deal, Mr Gianaris’ nomination was pulled.)

There was much dismay and hand-wringing over Amazon’s change of heart and the state of New York immediately launched a campaign to woo the e-commerce giant back. But some politicians’ reactions have no doubt solidified Amazon’s impression that it would find New York’s rough-and-tumble political scene too hard to navigate.

“You have to be tough to make it in New York City. We gave Amazon the opportunity to be a good neighbour and do business in the greatest city in the world,” New York City mayor Bill de Blasio said in a tweet. “Instead of working with the community, Amazon threw away that opportunity.”

This article is sourced from fDi Magazine
fDi Magazine

Global greenfield investment trends

Crossborder investment monitor

fDi Markets is the only online database tracking crossborder greenfield investment covering all sectors and countries worldwide. It provides real-time monitoring of investment projects, capital investment and job creation with powerful tools to track and profile companies investing overseas.

Click here to find out more about fDi Markets

Corporate location benchmarking tool

fDi Benchmark is the only online tool to benchmark the competitiveness of countries and cities in over 50 sectors. Its comprehensive location data series covers the main cost and quality competitiveness indicators for over 300 locations around the world.

Click here to find out more about fDi Benchmark

Research report

fDi Intelligence provides customised reports and data research which deliver vital business intelligence to corporations, investment promotion agencies, economic development organisations, consulting firms and research institutions.

Find out more.