- So, you probably heard about
Amazon's New York headquarters.
It was this billion-dollar project.
There was gonna be a new helipad, a waterfront esplanade,
and four Empire State Buildings worth of office space.
But on Valentine's Day,
Amazon decided to break things off with the city.
The company was scrapping the plans,
pulling out of the Long Island City site
and New York entirely.
It was an ugly end to months of planning,
a major embarrassment for everyone involved.
But to understand how it got so messy so fast,
you have to look at the big picture.
Amazon's Seattle headquarters
is the biggest urban tech campus in America,
with 40,000 workers
and almost a fifth of the city's prime office space,
but that still wasn't big enough for Amazon.
In 2017, Amazon announced it was looking for a home
for its second headquarters, dubbed HQ2.
Two hundred thirty-eight cities jumped in with proposals,
usually dangling massive tax breaks.
There was a bizarre game show vibe to the whole thing.
ClickHole joked about the mayors of Pittsburgh
and Kansas City beating each other to death
for a chance at the headquarters.
After all that, Amazon's finally choice
was kind of an anticlimax.
Instead of revitalizing a smaller city,
Amazon would split the new headquarters
between New York and Washington, D.C.
There is also a small outpost planned in Nashville,
but, for the most part,
the company would be investing in cities
that didn't need the money.
Almost from the beginning, New Yorkers were skeptical.
In the days after the deal was announced,
there were a ton of protests.
Amazon even got booed out of a city council meeting.
- [Man] "Stop it!"
- [Crowd] "G-T-F-O, Amazon has got to go!"
"G-T-F-O"
- A big issue in the background was rent.
Those high-paid tech workers bring a lotta money
into the neighborhood, which has a way of driving up rent,
sometimes really fast.
The effect has been most extreme in the Bay Area,
where the influx of tech money
has driven up rents by as much as 50% since 2010.
That's led to a lot of conflict
between tech workers and everyday citizens,
some of whom see the companies as hostile invaders.
Anti-gentrification activists
have gone as far as blocking the buses
that take Google employees to work outside San Francisco
as a kind of protest of what Google's doing to the city.
If you're Amazon, you have to think:
Are we gonna see
that same kind of local opposition in Queens?
Locals also had a problem with the deal itself,
which gave Amazon $2.5 billion in tax breaks
as a reward for moving in.
This kind of deal happens a lot
and you can argue it's a good trait,
since the city still ends up collecting more tax revenue
than it pays out in subsidy.
But there's a lot that doesn't take into account,
including all the residents and other businesses
that get displaced by the new headquarters.
On paper, Amazon was offering the city a lot,
including job training at nearby housing projects
and internship programs with local high schools.
But the idea of paying Amazon billions of dollars
to remake downtown Queens
was just too much for local politicians,
particularly City Councilman Jimmy Van Bramer.
Jimmy Van Bramer: "Is giving Jeff Bezos $3 billion
of hard-earned taxpayer money progressive values?"
- [Crowd] "No!"
- It didn't help that Governor Cuomo,
who masterminded the deal, was wildly unpopular
and didn't have much goodwill to draw on.
But the most dangerous local opponent
was State Senator Michael Gianaris, who in January
joined New York's Public Authority's Control Board.
That has official oversight over the Amazon deal.
And since the board requires unanimous approval
for a lot of motions,
Gianaris would've had lots of chances
to make life difficult for Amazon.
In November, Gianaris told The Verge
his staff was digging in to the incentive package
to see legally what we can do.
But as it turned out, he didn't get the chance.
Three months later, Amazon backed out.
In its statement, Amazon said it was pulling out
because, "A number of state and local politicians
have made it clear that they oppose our presence
"and will not work with us."
Now, that could be a reference to Gianaris specifically,
but the broader opposition was just as scary.
None of the local politicians
had the power to stop the deal completely,
but they could make things a lot harder.
The Queens project would've taken 15 years to complete
and along the way, there were gonna be permit issues,
labor disputes, and the kind of headaches
that come with any ambitious construction project.
There would be lots of chances to make trouble
and extract real concessions from Amazon.
In the end, it just wasn't worth it.
Now, not every tech company is so unlucky.
At the same time that Amazon was fighting in Queens,
Google announced a massive expansion
to its Manhattan headquarters,
but they did it without the big subsidies,
without the game show, and, as a result,
without the public opposition.
And south of DC, where there are fewer people
being displaced and fewer activists to raise hell,
Amazon headquarters is going forward as planned.
It's like Mayor De Blasio said after the deal fell through,
"You have to be tough to make it in New York."
Thanks for watching. Ton of questions in this episode.
Was Amazon right to back out of New York?
Would it have been bad for the city, for the headquarters to go forward?
Let us know in the comments and as always, like and subscribe.
See you next time.