Amazon will abandon plans to build HQ2 in New York

Amazon.com Inc will not move forward with plans to build a headquarters in New York after rising opposition from local politicians, the third most-valuable public U.S. company said in on Thursday.

Amazon’s search for a second headquarters, which it described as HQ2, was deemed a massive, year-long public relations success, garnering worldwide publicity and interest from cities across the United States.

But its choice of New York ran into immediate criticism in the U.S. financial capital from potential neighbors in the Queens neighborhood it chose and for billions of dollars in tax breaks.

People briefed on the decision said Amazon had made the decision early Thursday after intense talks starting Wednesday and amid rising concerns about the small vocal minority. The people said Amazon will not shift any of the planned jobs to Tennessee or Virginia but plans to grow its existing network of locations.

Amazon had planned to have 700 employees in New York as part of the HQ2 project by the end of the year and did not plan to hit 25,000 in Queens for 10 years.

The company said it will not reopen the search process “at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.”

The company had begun considering alternatives last week. The online retailer has not yet acquired any land for the project, which would make it easy to scrap its plans, a person briefed on the matter told Reuters on Friday.

The proposal ran into opposition from local politicians who opposed the $2.8-billion in incentives promised to Amazon in a deal secretly negotiated by New York Governor Andrew Cuomo and New York City Mayor Bill de Blasio.

The company said, “for Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term.”

Newly-elected Congressional representative Alexandria Ocasio-Cortez was among the more high-profile critics of the deal from the Democratic Party’s leftward flank.

“Can everyday people come together and effectively organize against creeping overreach of one of the world’s biggest corporations?” she wrote on Twitter last week. “Yes, they can.”

Some residents in the neighborhood, once a scruffy haunt of artists that has rapidly gentrified with a burst of recent high-rise development, had also opposed the plan.

Long-time residents feared being forced out by rising rents and untenable pressure on already overburdened subway and sewage systems.

Cuomo was a staunch advocate of the project, touting not only the jobs it would create but the long-term tax revenues it would generate.

‘REALLY GOOD POKER PLAYERS’

Hours before the announcement, Amazon officials in New York betrayed no knowledge of the deal’s cancellation when they met with local community members on Thursday morning, said Kenny Greenberg, a neon artist and member of Long Island City’s community board.

“Either they are really good poker players or they were not aware,” Greenberg said of the Amazon representatives. “There was no hint of this at all.”

Greenberg said he had been open to Amazon’s arrival if it had led to improvements in infrastructure, but that “unanswered questions” continued to mount as time went on.

The meeting with Amazon officials had been held to answer concerns from the community about labor conditions for Amazon’s warehouse and delivery workers and the company’s opposition to labor unions.

One of the city’s most powerful private-sector unions, the Retail, Wholesale and Department Store Union, said the company’s abrupt exit confirmed its criticisms.

“Rather than addressing the legitimate concerns that have been raised by many New Yorkers Amazon says you do it our way or not at all, we will not even consider the concerns of New Yorkers – that’s not what a responsible business would do,” union spokeswoman Chelsea Connor said in a statement.

Chicago, Miami and Newark are among the passed-over finalists that have expressed interest in another chance to become the home of an Amazon project that could bring 25,000 jobs. Nashville, Tennessee, which was awarded a 5,000-person center, also said it was open to taking on a bigger role should New York withdraw from consideration.

Shares of Amazon were down 0.3 percent after the announcement.

Reporting by David Shepardson in Washington and Jonathan Allen in New York; Editing by Nick Zieminski