Amazon Reconsiders NY Expansion Plans Amid Opposition

(Bloomberg) -- Amazon.com Inc. managers have weighed alternatives to locating a corporate campus in New York City after local officials opposed the plan, according to people with knowledge of the matter.

Some people involved in the planning for Amazon's East Coast expansion have discussed whether to pare back the New York plans, said the people, who asked not to be identified discussing private deliberations. One of the people said a complete pullout from the project in Queens was unlikely. The Washington Post reported earlier Friday that Amazon is reconsidering the plans, citing unidentified people familiar with the matter. The company hasn't leased or purchased office space for the project yet, making it easy to withdraw the commitment.

Read more: How Amazon's Booming NYC Neighborhood Got Tax Perks Meant for the Poor

It's possible the reported threat to leave could be a negotiating tactic, the Post said. Inside Amazon, all indications are that the company is moving full-steam ahead with the expansion, according to a person familiar with the matter. In Seattle, executives on multiple teams have been notified they'd have to relocate to New York, two other people said.

Almost immediately after Amazon announced last year that it chose Long Island City as one of two sites to build new corporate offices, a backlash emerged from lawmakers and community organizers in the Empire State. They oppose the nearly $3 billion of financial incentives Amazon won from the city and state, and say the influx of new well-paid workers could push out existing residents and add to congestion on the already overcrowded subway.

New York Governor Andrew Cuomo, who has been a vocal champion of Amazon, reiterated the benefits of the deal for New York City, including 25,000 tech jobs with an average salary of $150,000 and $27 billion for government coffers.

“Amazon is the largest economic development program that NY has ever won,” Cuomo said, speaking to business executives on Long Island Friday. “We get $27 billion in revenue, they get $3 billion back -- I would do that all day long. For the state Senate to oppose Amazon was governmental malpractice and if they stop Amazon from coming to New York they are going to have the people of New York to explain it to.”

Meanwhile, Alexandria Ocasio-Cortez, a Democratic representative from New York who has been one of the most vocal critics of Amazon, saw the news of a potential withdrawal as a victory.

“Can everyday people come together and effectively organize against creeping overreach of one of the world's biggest corporations? Yes, they can,” she said in a Tweet.

Amazon expected it would face the biggest public backlash to a new headquarters in New York City, Bloomberg has reported. Amazon chose the location anyway, since the city offered a large skilled-labor pool, and ample opportunities for spouses and partners of recruited hires to find employment to further their own careers, the person said. It's building a similar project in Arlington, Virginia.

Amazon, run by the world's richest person, was also eligible for tax breaks intended for poor neighborhoods, contributing to the local outrage. A company official said Jan. 30 that the company wouldn't avail itself of the incentive.

How Booming Amazon NYC Neighborhood Got Tax Perks Meant for Poor

At a contentious City Council meeting last week, Amazon's public policy director Brian Huseman touted the deal's benefits for the city, but also said that Amazon wants to invest in a “community that wants us.”

The deal hasn't closed yet. It must be approved unanimously by the state Public Authorities Control Board. On Monday, New York State Senate Majority Leader Andrea Stewart-Cousins chose Senator Michael Gianaris, a Democrat who represents Long Island City, and one of the biggest critics of the Amazon deal, as one of three members of the board.

“Jobs are good but we need to get them the right way and we shouldn't be subsidising to the tune of $3 billion plus,” Gianaris said in an interview on Bloomberg TV. “This is the type of extortion by Amazon that's got us into this mess in the first place. They think they can sit there in Seattle and dictate terms and hope that governments bend to their will. Well. Its not going to work."

To contact the reporters on this story: Henry Goldman in New York at hgoldman@bloomberg.net;Spencer Soper in Seattle at ssoper@bloomberg.net;Matt Day in Seattle at mday63@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Molly Schuetz, Robin Ajello

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