EconomicsNews

Amazon cancels New York headquarters and 25,000 new jobs after political pushback

Amazon has dropped plans for his New York City headquarters after local leaders raised objections to its plans, the company announced Thursday.

“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,” the company wrote in a blog post discussing the decision.

While polls show that more than two-thirds of New Yorkers support the plan, politicians at the state and local level poisoned the relationship, the company suggested.

The move does not affect Amazon’s plans to open new corporate campuses near Washington, D.C. or in Nashville, Tennessee.

Amazon had planned to create 25,000 jobs and occupy as much as eight million square feet of office space in its Long Island City headquarters, but had not yet purchased the land.

Gov. Andrew Cuomo, who secretly negotiated the deal for Amazon to come to New York in exchange for almost $3 billion in incentives, criticized opposition to the project, calling it “political malpractice.”

Opponents criticized the secret nature of negotiations, with bypassed normal procedures, as well as the size of the incentive package that drew Amazon to the Big Apple.

Union interference also played a role in the opposition to the retail giant, and negotiations between union leaders and supporters of the deal clearly did not convince Amazon that moving forward was the correct move.

“This is the same reason why you see manufacturers, including automakers, build plants in Alabama, Tennessee, Georgia, South Carolina and other right-to-work states,” said Michael Crosby, a FreightWaves market expert in shipping. “Business leaders have many choices for where to locate their operations, and dealing with this level opposition to their plans can be easily overcome by going elsewhere.”

The cost of doing business in New England in general, and New York in particular, along with union-related inflexibility and expense, has been cited in the bankruptcy and ongoing dissolution of New England Motor Freight, a large less-than-truckload carrier that announced this week that it would shut down.

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