NYC rejected Amazon’s HQ2 plans. Now some New Yorkers are second-guessing that decision.

The Coronavirus pandemic revives an old debate about what cities should give up to bring in more jobs.

Christopher Mills
May 19, 2020 · 5 min read
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It seems so long ago. Amazon’s announcement dominated headlines: they would withdraw their planned HQ2 from Queens, taking an estimated 25,000 jobs along with them. No one expected an upcoming global pandemic that would lock down the nation and put tens of thousands of NYC residents out of work.

Many New Yorkers celebrated when the tech behemoth finally withdrew their plans to build in Queens. They didn’t want to subsidize a massive corporation accused of annihilating small businesses. In the DC area too, speculation was rampant about what the new Amazon headquarters there would mean for jobs and traffic.

Meanwhile, DC area startups rejoiced. Amazon’s headquarters would bring in a wave of fresh tech talent.

As we’ve written before, with Amazon’s announcement, the DC metro area felt like it was finally, officially, an East Coast tech hub. The “DMV” (that’s DC, Maryland, Virginia for the DC outsiders) was the new destination for software engineers and developers looking to make it big. Crunchbase lists almost 900 DC area startups currently, and it seemed as though that list could only grow.

Then the big #lockdown changed everything. It hit nearly every industry hard, but tech startups were among the hardest hit. Thousands of New Yorkers had celebrated when Amazon first withdrew its HQ2 plans. Now they had to look for high-paying jobs that would allow them to work from home.

Now that they were stuck indoors watching unemployment rates skyrocket, did New Yorkers regret dismissing the online retail giant? 25,000 jobs would have only been a small dent in the hundreds of thousands of unemployment claims NYC has seen recently. But the needs of all those extra employees, construction workers, and more might have kept many New Yorkers in business.

I used to live in New York. I biked from Brooklyn to Manhattan and back every day. During that time, I learned that New York is a city unlike any other. Its residents are scrappy and competitive, yet fiercely proud of their city and defensive of their turf.

In that regard, NYC is remarkably different from Washington DC. District residents love their city too, but for many, it’s a temporary stop in their careers. Contract workers, college students, and political parties come and go every few years.

It was no surprise that New York City and DC residents would have different reactions to HQ2. But did the Coronvirus pandemic and comorbid economic recession change anything? I asked around.

The question sparked fierce debate everywhere I asked it. Though many people insisted that they never cared much, and had never felt strongly about it — they all had an opinion.

One of the first arguments I encountered was that Amazon would not have brought the promised jobs. Many NYC residents saw HQ2 as an excuse to get tax breaks, then find a way to hire remote workers. Many New Yorkers suspected that if they had given in to Amazon, the company would have found a way to back out of the deal or fail to live up to the terms.

Others argued that whether Amazon lived up to the terms of the deal didn’t matter. The point was moot once the city locked down. Amazon would have halted construction and changed its plans once the pandemic hit.

When I posted this question on Reddit, u/flat_top suggested that “companies are either going to need less office space or even more, depending on social distancing and WFH policies going forward.” Amazon would have put its plans on hold and likely had to make major changes anyway.

Other members of the “good riddance” camp held the opposite opinion. They argued that Amazon would have increased traffic in an already overcrowded city. HQ2 would have displaced people from their homes.

To these New Yorkers, Amazon would have held up its end of the bargain, but always intended to create only white-collar jobs. The people who needed jobs most would never have benefited. Amazon’s HQ2 would have increased traffic, skyrocketed rents, and displaced many of the people who were already living there. Many of those people were barely scraping by, but Amazon would not have given those people jobs.

To many New Yorkers, Amazon had failed to respond to these concerns. If Amazon didn’t want to help the New Yorkers at the bottom, it didn’t deserve the subsidies it would have received at the top.

As it is, Amazon is still expanding in New York City — only without the taxpayer subsidies they would have gotten. Amazon recently purchased the Lord and Taylor building from WeWork. To many NYC residents, the purchase was a sign that New York had won. NYC got the best of both worlds. Amazon will still move many jobs into the city, but now they’ll pay the same taxes as everyone else.

NYC residents disagree a lot about what Amazon’s HQ2 would have meant for the city. But, there’s one fact everyone seems to agree on: Amazon’s entire contest had been a manipulative marketing ploy, designed to get tax breaks they didn’t deserve. If Amazon hadn’t forced their city to compete in a contest for its new headquarters, New Yorkers might have had a very different opinion about it.

Redditor u/sokpuppet1 summed the HQ2 contest up, saying it “left a real sour taste and contributed to the backlash.” Ultimately, most New Yorkers seem happy that Amazon never received the incentives and tax-breaks it demanded to open its Queens HQ2.

All these arguments have their appeal, but a look at DC tells the full story. So far, Amazon has not pulled a bait-and-switch here. They are still building. As we’ve written before, Amazon’s HQ2 has had an incredible ripple effect in the nation’s capital. It has inspired startups and tech talent alike to see DC as more than a political swamp. Though most DC residents haven’t felt a direct impact of Amazon’s HQ2 yet, it has helped speed up the process of converting DC into a tech hub.

When I first took this question to Reddit, u/nychubris responded:

“We missed gaining a bunch of professional jobs that would have further anchored New York as a tech hub and created a bunch of supporting roles in other industries […] We would have additional COVID-resistant income taxes and economic activity to bolster city funds for the less well off during this crisis. We shot ourselves in the foot.”

Though Amazon still has a large presence in New York City, their presence there is more like the presence they have in other cities in the US. They did not build an official HQ2 there. Amazon’s HQ2 might have brought valuable jobs to New York City. In contrast, construction continues on the two, 22 story tours that residents expect to house thousands of new employees in DC.

To most New Yorkers, Amazon’s hubris was too much. Amazon demanded too many concessions New Yorkers weren’t willing to give for free. Amazon ignored the concerns of the people who lived there. As a result, New York City rejected the deal. It’s unclear whether it was a loss for Amazon or a loss for NYC. Both may have gotten exactly what they really wanted. But one thing is for sure — it’s a win for DC.

The Startup

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Christopher Mills

Written by

I interview startup gurus and recently founded my own business, Wrenworks — helping startups launch MVPs.

The Startup

Medium's largest active publication, followed by +775K people. Follow to join our community.

Christopher Mills

Written by

I interview startup gurus and recently founded my own business, Wrenworks — helping startups launch MVPs.

The Startup

Medium's largest active publication, followed by +775K people. Follow to join our community.

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