What the Hell Happened to Amazon in NYC?
A Tale of Two Cities
In November 2018, New York was hit with the massive news that Amazon had confirmed its move into Long Island City. This plan brought with it the prospects of massive job growth, expedited development of one of the lesser frequented areas of the city, next-gen industry and education, and so much else. New York’s version of Silicon Valley has always been lacking in relation to California’s tech culture, so the idea of bringing in a giant like Amazon would mean making up a lot of lost ground.
The fairytale didn’t last long for the city, however, when in February ’19, New Yorkers were unfortunately updated that the headquarter development would not be moving forward as planned and would instead be settling in Crystal City of Virginia. There were a number of theories around the change in plan including a non-dedicated bid in NYC for publicity. However, the most explicit reason was the conflict and lack of agreement with the local residents.
There was an upsurge in opposition towards the project as more complications and misinterpretations started to arise. Protesters began to mobilize and petitions went out to energize the public against the impending impact of a tech behemoth in Queens. Politicians publicly condemned the lack of project sensitivity while others opposed those doing the condemning. After a few months of this escalation, both sides were essentially competing over misdirection tactics and ultimately dissuaded Amazon moving forward with that plan.
Building on Common Ground
Arguments fell to one of two sides. Many focused on the loss of a multi-billion-dollar development and industry that would have surely brought about long-term job growth, education, and opportunity, as well as bolster New York’s attractiveness in the tech domain. Others though, were sympathetic to the possible challenges the campus posed to locals, including inevitable displacement due to rising property values.
However, there was a common thread that tied both sides together, one which was bemoaned above all — the incapacity of both sides to arrive at an agreement or baseline conversation. The risk of gentrification is one that comes along with any urban development and when taking into consideration the potential upside and seemingly limitless resources of Amazon, finding a resolution seemed like something that should have been within reach. As new construction, Amazon would have gone through some degree of negotiation of what would be included in their plan, usual options being public space, subsidized housing, community facilities, and other forms of physical contribution to its surrounding community. With the corporation’s financial backing and a deep need for a development focus on Queens, finding common ground didn’t seem far-fetched and for once, New York would have enjoyed a high-profile win-win situation.
But alas, that future was struck from New York’s vision and it’s worth exploring the reasoning behind that ultimate move in that fatal process. Let’s see where we can place the blame…
It was Amazon’s Fault (?)
The entire process was heavily skewed to catering to Amazon and its needs above all. Cities across North America produced a total of 238 bids, and even each of the five boroughs competing for viability once they settled on NYC for HQ2. Above anything else, the bottom-line was about what any host city could provide the company and almost nothing about what Amazon would provide beyond the implicit job growth in the redevelopment process.
The communication was lacking as well, a fault of the New York City and state government as well. There were few public events or town halls or forums of any kind, severely limiting the opportunities New Yorkers could have to chime in on the deal and what could or would happen to their city. Besides the renders, there was little understanding of what the project would actually entail and offer to the existing community.
The process itself undoubtedly benefited Amazon the most, being more about what the city could provide logistically and financially as opposed to the other way around. Many have even criticized Amazon of abusing the process of bidding to accumulate data on the hundreds of urban candidates, a procedure that would have Amazon a sizable amount of time and resources to gather on their own.
There is a strong perception of wealthy corporations taking advantage of their massive influence to short change the communities they move into. The New York public is well aware of the disproportionately rising property prices that come about from a move like this, implicitly requiring any incoming entity to properly address and ideally plan for those concerns and inevitabilities. All-in-all, it’s very easy and understandable to come to the conclusion that Amazon’s intentions were singularly and unabashedly economic.
It was the Public’s Fault (?)
On the flip side, the prospects of any large-scale property development and following Silicon Valley/San Francisco’s model does not sit favorably in the mind of city dwellers. The collective response can and usually does quickly transition to a purely emotional one, stoked by misinformation and misguided thinking. Amazon’s plan had very explicit benefits to the long-term economy and social outlook of LIC. However, those talking points of interest were quickly drowned out by legitimately grounded but hostile concerns.
The potential of any change that might trigger gentrification is not well received in New York, where the vast area of property is either already developed beyond inclusion or is in the process of becoming the latest iteration of Soho or Williamsburg. Unfortunately, that trigger might be anything from a small 3-unit apartment or a cute new coffee shop, thus keeping NYC locals ever vigilant. The seemingly lack of willingness to engage the incoming tech company and resorted to immediate rejection. An allergy towards these discussions and changes brought about a stream of criticism that resulted in a very short-sighted conclusion.
It didn’t help at all that there was a tremendous and unbalanced focus on the tax trade-off with residents, assuming that city budgets would be going directly into Bezos’ pockets. Governor Cuomo and Mayor de Blasio clearly laid out the terms of the deal, attempting to illustrate why it was a large net-gain for the city. This didn’t prevent a great deal of misguided press to come out and settle poorly with an anxious general audience.
Misinformation around the taxation credits and the net gain that the deal would bring to the city in terms of long-term tax benefits, job growth, physical development, and so forth caused the inevitable breakdown in public reception. It can be debated whether this is the personal fault of activists or the media stoking misguided clickbait, but there was clearly a reluctance to come to a reasonable discussion on both sides.
It was No One’s Fault (?)
There is no doubt that if the process were to have been handled differently, both sides of the negotiation had a significant amount to gain. Amazon could have made great use of the existing infrastructure, high talent pool, and general urban culture of New York towards great productivity. The residents could have equally, or even more greatly, gained from the job growth, redevelopment potential, and technological resource that is embodied by Amazon. It’s most likely that both sides were deeply culpable of allowing the squandering of HQ2’s potential.
“The loss of revenue to the state, the loss to the suppliers, loss to the local businesses that would benefit from an infusion of workers walking into little bakeries and delicatessens,” [Kathy] Hochul said during the February interview. “And even Queensbridge, there were a lot of people that were anxiously awaiting what opportunities Amazon could bring to them and giving them the opportunity to get real job training in skills that are highly marketable.” [Source]
As always, we look at these extreme examples as precedent for how we think of urban governance within our own company and product. How do avoid the inevitable next HQ situation? How do we conduct proper agreements between incumbent stakeholders and prospective ones? And even when productive threads of communication are established, how do we ensure that the decisions promote both growth and security?
There are, without a doubt, no easy answers to these questions. Otherwise, a company as powerful as Amazon or a government with as much leverage as the NYC Mayor’s Office or a community as mobilized as that of the five boroughs would have been able to spearhead some workable solution to this dilemma.
All we know now is that if things had been handled differently, Bezos could have avoided at least one historic divorce.
What do you think? Is one of the two or three constituent groups the most guilty here? What could they do differently for HQ3? Do you think it was ultimately good that Amazon withdrew their development plans?
As always, let us know below or catch us on Twitter!
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