BREAKING: Amazon Cancels NYC HQ2 Plans, But Leaders Say ‘Nothing Has Changed’ for Arlington

by Alex Koma February 14, 2019 at 11:50 am 0

(Updated at 2:45 p.m.) Amazon is cancelling plans to build half of its “HQ2” in New York City, citing mounting criticism from local officials and activists in its reasoning for abandoning its other proposed location for a new headquarters outside Arlington.

But Amazon said in a statement announcing the change that it does not intend to re-open the HQ2 search and will “proceed as planned in Northern Virginia and Nashville.”

County Board Chair Christian Dorsey says the company told local officials that “nothing has changed” when it comes to Amazon’s plans for Arlington, and that the county isn’t likely to suddenly see jobs bound for New York head here instead.

Amazon originally announced plans to bring 25,000 jobs to Crystal City and Pentagon City in November, though the terms of the state incentive deal recently approved by Gov. Ralph Northam do allow for the company add another 12,850 jobs to the Arlington headquarters after that.

Dorsey told reporters on a conference call Thursday afternoon that the chances of the company reaching that larger number have likely increased with today’s news. However, he added that the county does not plan to try to lure any of the jobs originally set for New York to Arlington instead. Spokespeople for JBG Smith, Amazon’s future landlord in some buildings and development partner for others, declined to comment on Amazon’s New York City changes.

“If they want to occupy more square footage, that will be contingent on the community plans we already have in place for any business,” Dorsey said. “But at this point, there is no reason to speculate about that.”

Amazon pointed to a lack of “positive, collaborative relationships with state and local elected officials” in explaining its decision to abandon its New York plans. Rumors first started circulating that the tech giant could spurn the city once New York lawmakers appointed a vocal Amazon critic to a state board that would have oversight over the state’s incentive package for the company, and a coalition of lawmakers and left-leaning activists have been intensely skeptical of Amazon’s plans for the city.

But Dorsey says this development has done little to change his opinion of Amazon as a partner for the county, praising the company’s executives as “collegial and collaborative” thus far.

“They’ve been a completely honest broker and we feel good about our relationship with them,” Dorsey said. “I can’t speculate about what went wrong in New York… we’re just trying to treat Amazon as they’ve treated us: by being transparent, honest and forthright. They’ve not only accepted who we are and our values, but embraced it.”

Amazon’s skeptics in the county think it’s foolish for local leaders to view today’s news so charitably. Roshan Abraham, an outspoken Amazon critic and a leader of the progressive group Our Revolution Arlington, thinks the company’s sudden decision to pull out of New York should give county officials “significant pause” in dealing with Amazon.

“This demonstrates Amazon’s need for control,” Abraham told ARLnow. “Amazon wants things to go their way, and if it doesn’t, they’ll leave. They’ll hold the county hostage with that threat. They’re clearly not afraid to use that to their advantage.

Abraham hopes the company’s decision to leave New York demonstrates “the power of activists and what activism can achieve,” and emboldens the tech company’s opponents around the county. Though anti-Amazon sentiment has been a bit more muted in the county than in New York, activists have raised concerns ranging from affordable housing to labor and environmental practices to the use of public funds to benefit one of the world’s largest companies.

But local leaders say they aren’t worried about any sort of major community backlash derailing Arlington’s own incentive deal for Amazon, just yet.

“Some things could change a little bit in our performance agreement with Amazon… and this is likely to contribute to some increased heat over the next six weeks,” County Board member Matt de Ferranti told ARLnow. “I don’t want to underplay it, but we’re certainly not panicked by it.”

The Board is still mulling that agreement, which will work out to about $23 million in grant money for the company over the next 15 years. The cash will be drawn only from a projected increase in hotel stay tax revenues that Amazon is expected to generate.

A vote on that deal was delayed after originally being targeted for this month, and Dorsey says the Board is currently eyeing March 16 for the big decision.

“We are excited that Amazon’s plans for Virginia remain in place and that we can continue working together to position Virginia’s dynamic tech sector for healthy, sustained, statewide growth,” Stephen Moret, the president and CEO of the Virginia Economic Development Partnership (which helped broker the Amazon deal) wrote in a statement.

Here’s the full Amazon statement about its Valentine’s Day breakup with NYC:

After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. 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% 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.

We are disappointed to have reached this conclusion — we love New York, its incomparable dynamism, people, and culture — and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.

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.

We do not intend to re-open the HQ2 search 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.

Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time.

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