Amazon's HQ2 decision starts local firestorms
Amazon is caught in a surprise grassroots battle with local critics who are furious that it's been promised billions of taxpayer dollars to put jobs in New York, Arlington and Nashville, the winners of its search for a second headquarters.
Why it matters: Amazon won the top-down battle, with support from governors, mayors and economic development organizations. But it’s now confronting bottom-up outrage from activists and local lawmakers who were cut out of the bidding process.
The big picture: Jeff Bezos’ empire is no stranger to fights, having taken out retail rivals with brute force and neutralized Washington, D.C., threats with grand gestures like backing a $15 minimum wage for its employees. Still, it has struggled to head off these local fights — all while Google and Apple plan major expansions in crowded cities without the backlash.
- Google on Monday announced it will spend $1 billion and lease 3 new properties (on top of the $2.4 billion purchase of Chelsea Market this year) to more than double its NYC workforce, already at more than 7,000 workers.
- Apple last week announced a $1 billion, 5,000-employee expansion in Austin.
How Amazon's HQ2 choices are playing out around the country:
- In New York, members of the city council took turns brutalizing Amazon executives over the tax incentives that are part of the deal for the company to set up shop in Queens. They also harshly questioned Amazon's engagement with the legislative body and the necessity of a helipad that could accompany its office.
- From outside NYC's city hall, Rep.-elect Alexandria Ocasio-Cortez’s criticism of the company has been echoed by progressive activist organizations emboldened by her election win.
- Activists in Nashville and Virginia — the other HQ2 winners — are organizing around their own concerns about how Amazon’s negotiations will affect their communities. (Nashville isn't one of the two HQ2s, but Amazon is developing a new operations center there.)
“I don’t think they expected the level of public, grassroots outcry and the level of pushback from elected officials, neighborhood residents, the critical look that was taken at them by the press in New York City. I think they were surprised.”— City Council Speaker Corey Johnson, a critic of the tax incentives
Across the winning locales and the losing cities, the criticism is the same: The entire process was shrouded in secrecy.
- "One of the things that the majority of people who ran for local office ran on is transparency, but then we woke up one day to find out that Amazon is coming to town,” said Odessa Kelly, an organizer in Nashville.
In a statement, an Amazon spokesperson said the company is “excited to work with New Yorkers over the coming months and years to bring a new Amazon headquarters to Long Island City and help support the community."
- The spokesperson noted, "We expect our new headquarters to generate more than $20 billion in new tax revenues for community improvements and the people of New York."
- The company has also pointed to the fact that it will not receive many of the incentives unless it delivers on its promise to create jobs.
Amazon has responded to the criticisms by hiring more lobbying firepower in communities where it could face backlash to the office deals.
- Since October, Amazon has registered four more lobbyists in Virginia, according to public records.
- The New York Times reported that Amazon retained new lobbyists in New York City ahead of its council hearing.
Yes, but: The opposition to Amazon is making lots of noise, but it lacks legal authority to shut down the new satellite offices.
- Amazon also has buy-in from key officials, including governors, mayors and many federal lawmakers.
- According to a Quinnipiac University poll, 57% of New York City voters approve of Amazon’s headquarters project in Queens' Long Island City while 26% disapprove. They are more split on whether they support the tax incentives used to lure the project.
What to watch: Lawmakers in New York are looking to hold more hearings with Amazon, and activists in Nashville and Virginia are seeking out allies in city governments.
The bottom line: "This backlash is serious,” said Nate Jensen, a professor at UT Austin who studies tax incentives. “We haven't seen this kind of resistance at the grassroots."