Bowing under pressure from politicians and protestors

This was big news, particularly since Amazon announced just three months ago, after a year-long search for the ideal location for a second headquarters, that it had selected two cities for HQ2 – New York City and Arlington, Virginia. The new facility would have brought 25,000 jobs to the city, along with hundreds of millions of dollars in new investments to the area.

Axios reprinted Amazon’s statement. Here is an excerpt:

“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. While polls show that 70 percent of New Yorkers support our plans and investment, 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…." said Amazon.

“We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult,." Amazon said.

Amazon stated it would not reopen its HQ2 search. However, it will continue its plans to build in Northern Virginia and Nashville. The tech giant will also continue to support more than 5,000 employees located in Brooklyn, Manhattan and Staten Island, and the company renewed its commitment to grow those teams.

One of the incentives for Amazon to move to New York were city and state tax breaks, performance incentives and grants of $3 billion to build HQ2 in Queens, reports TheStreet. Residents against the deal said it was bad for taxpayers, and it would eventually price them out of their homes, reports CNN.

New York City Mayor Bill de Blasio took to Twitter on Valentine’s Day to express his disappointment.

Insider Take:

This is an interesting business decision by Amazon, but probably a smart one on behalf of the Bezos-backed tech company. Bezos didn’t become a billionaire by making bad choices, and he is known for testing ideas and quickly abandoning those that don’t work. This is likely one of those decisions. New York City and New York State made Amazon a very sweet deal, but with so much opposition, Amazon didn’t feel like it could successfully move forward.

With tens of millions of Prime members and one of the biggest bankrolls in the world, Amazon and Bezos don’t have to wade through political red tape. New York may regret this decision, but Amazon and Bezos will just move on – investing in Arlington and Nashville instead.

Dana Neuts is Subscription Insider's Senior Staff Writer, covering our daily subscription news as well as member features, case studies, and reports.  

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