Amazon's grave NYC HQ2 mistake: the political landscape changed but the company's playbook didn't
others are disappointed. Diana Budds / Curbed NY : Amazon HQ2 v. NYC is a lesson on the importance of transparency Stephanie Denning / Forbes : Why Amazon's Decision To Pull Out Of NYC Is A Loss Graham Rapier / Business Insider : Uber is suing to block New York's cap on new ride-hailing vehicles Zachary Karabell / Wired : New York and Amazon Played a Zero-Sum Game—And Everyone Lost Chris Nuttall / Financial Times : Amazon and New York count the cost PYMNTS.com : Fizzle Of The Week: The NYC Amazon HQ That Will Never Be Sara Salinas / CNBC : Amazon held last-minute negotiations with union and local officials before canceling New York HQ2 plans Tweets: Lloyd Blankfein / @lloydblankfein : After killing Amazon's NYC HQ, not sure some progressive democrats deserve either title. This move was both anti-progress (negative for development and tech jobs) and anti-democratic (polls show 70% of NYers were in favor). Victory lap for them, not for NYC. #AmazonHQ2 @wsj : Amazon doesn't need another Seattle, writes @mims. It needs to stimulate tech growth by spreading its resources across the country. http://www.wsj.com/... Steve Case / @stevecase : Why Amazon's New York U-Turn Is Good for America's Tech Economy http://www.wsj.com/... @WSJ: “The answer to overcrowding in Seattle & Silicon Valley wasn't to build yet another tech headquarters in an already crowded city like New York, but to spread out.” #RiseOfRest http://twitter.com/... Meghan Lapides / @megletny : Wise words. Like many of us in NYC and in Tech, I'm frustrated by how all of this went down from every angle. There are many lessons to be learned here and what upsets me the most is I'm worried everyone is too sure they are right to actually learn them. http://twitter.com/... Jorge Ortiz / @jorgeo : Smartest take yet on HQ2. “There are a lot of lessons here. And none of them will be learned by simply accusing the other side of not getting how economics works.” http://twitter.com/... Buzz Andersen / @buzz : “No matter whether you think Amazon HQ2 in New York was a good or a bad idea, it is worth considering how terrible the execution of the whole affair has been.” So true—tone deaf to the max. http://twitter.com/... Karen Weise / @kyweise : MORE in the update: Even as the HQ2 deal was in peril, Jay Carney, who oversees Amazons's press and government relations, never went to New York to meet with officials, three people with knowledge of the meetings said. Cc @jdavidgoodman http://twitter.com/... @semil : “[The NYC-Amazon story] is all about misunderstanding where we are on the perception of tech companies and their role and responsibility with regard to the polarization of society.” - @albertwenger http://continuations.com/... Christopher Mims / @mims : The largesse that Amazon would have poured into NYC is now going to go to 17 regional Amazon offices + other global offices.GOOD!http://www.wsj.com/ ... Jason Del Rey / @delrey : Another important point on this HQ2 deal and Amazon's unwillingness to stray too far from its historical playbook: timing was everything http://www.recode.net/... http://twitter.com/... Jason Del Rey / @delrey : Amazon launched its HQ2 contest in one political climate and ended it in an altogether different one. It never seemed to recognize that. And to make sense of why Amazon wasn't able or willing to compromise, you need to understand its DNA http://www.recode.net/... http://twitter.com/... Jason Del Rey / @delrey : Amazon's grave HQ2 mistake: the political landscape changed but the company's playbook didn't. Amazon had a chance to show itself to be a model for tech responsibility. Instead, it did what it almost always does: refuse to back down. https://www.recode.net/... pic.twitter.com/FzxVO3ylqR Lydia DePillis / @lydiadepillis : The craziest thing to me about the LIC HQ2 fiasco is how, with the most killer team of economic development pros money can buy, and a two-year-long process engineered to extract the best deal possible, Amazon STILL misjudged New York: http://www.cnn.com/... @nytopinion : There's a lesson in Amazon's pull-out from NYC: Tech is a business, like any other, and this time the deal wasn't worth it. Why do we keep buying into the myth that these companies are interested in making the world a better place? http://www.nytimes.com/... by @karaswisher Karen Weise / @kyweise : Amazon execs realized they were staring down a decades' long commitment to a political climate in which *everything* the company did would be scrutinized—and it bailed. Here's @jdavidgoodman and my look at WTH happened w HQ2 http://www.nytimes.com/... Tim Logan / @bytimlogan : “Amazon badly misjudged how it would be received in New York, apparently because the company has rarely ventured into such a raucous political arena as it has pursued a breakneck expansion in recent years.” http://www.nytimes.com/... J. David Goodman / @jdavidgoodman : Last minute calls. On the ground organizing. A hiring plan. Hints of a union deal. In the final days before Amazon decided to cancel plans for New York, things were looking up. Then they came crashing down. http://www.nytimes.com/... Daniel P. Aldrich / @danielpaldrich : Amazon was not accustomed to being forced to respond publicly on its policies and operations http://www.nytimes.com/... Jason Del Rey / @delrey : One more thing on Amazon and NYC. If Amazon was never going to compromise on incentives (should have, but not in its DNA: https://www.recode.net/... ), then the timing of pullout made sense. State board approval would not come til 2020, and plans would have been in limbo until then @nytopinion : A few years ago, it would have been easy for Amazon to saunter into a place like Long Island City. What changed? http://www.nytimes.com/... by @karaswisher Dylan Byers / @dylanbyers : In interview, AMAZON policy comms chief Jodi Seth tells me Amazon pulled out of NYC because of three months of sustained opposition from @AOC, @JimmyVanBramer & other officials... “We decided we don't want to work in this environment in the long term.” http://www.nbcnews.com/... Kara Swisher / @karaswisher : As they say in NYC: Meh. Amazon Isn't Interested in Making the World a Better Place via @NYTimes http://www.nytimes.com/... Alexandria Ocasio-Cortez / @aoc : This deal wasn't a simple tax break. It was $3 BILLION dollars. When the community wanted to negotiate, Amazon said “all or nothing.” They bailed when they didn't get 100% of what they wanted. Google came into NYC just fine. Amazon wanted to be FoxConn: https://www.bloomberg.com/... Bernie Sanders / @sensanders : If you paid the $119 annual fee to become an Amazon Prime member, you paid more to Amazon than it paid in taxes. Our job: Repeal all of the Trump tax breaks for the top 1% and large corporations and demand that they pay their fair share in taxes. http://twitter.com/... Judd Legum / @juddlegum : If you go into a convenience store and steal a pack of gum that's a crime If you run a company that turns an $11 billion profit and pay zero in corporate income tax that's called “being strategic” http://fortune.com/... Gabe Rivera / @gaberivera : Here are 4 questions: 1. Are tax incentives for a company from a city ever prudent? 2. Are tax incentives for a company from NYC ever prudent? 3. Are tax incentives for Amazon from NYC ever prudent? 4. Are tax incentives for Amazon from NYC prudent given how they were negotiated? Kim-Mai Cutler / @kimmaicutler : “For them to not have anticipated a political backlash to this kind of incentive package, when it sits right in the backyard of people like Alexandria Ocasio-Cortez, just shows complete incompetence,” —@Richard_Florida https://twitter.com/... Seth Fiegerman / @sfiegerman : A key point on Amazon's decision to withdraw from New York, from @bradstone the reporter who knows Amazon (and Bezos) best: http://www.bloomberg.com/... http://twitter.com/... Ryan Mac / @rmac18 : .@BradStone says Amazon's HQ2 decision-making was a string of policy fails and this point about Bezos not showing up is a good one. This after all is a guy who dressed in an Indian suit and rode on a lorry w/ a giant $2B check when his co invested in Indiahttps://t.co/2Z1LrXXuXp http://twitter.com/... Albert Wenger / @albertwenger : Amazon and NYC massively misread perception http://continuations.com/... http://twitter.com/... Dan Primack / @danprimack : Two things can both be true:@AOC gloating over what amounts to loss of local jobs, rather than working to negotiate a better deal, is malpractice.@amazon blaming its decision on the rhetorical opposition of a local congressperson is ludicrous. Downtown Josh Brown / @reformedbroker : Yes. That $3 billion in subsidies is not being “spent elsewhere” because it doesn't exist without the revenue and economic activity created by thousands of new jobs. http://twitter.com/... Matt Day / @mattmday : Yesterday, Amazon, Cuomo and union reps were talking about an agreement to pave the way for peace in Amazon's move to NY. “We all agreed to it, and we said the next step was to start drafting language.” http://www.bloomberg.com/... This morning, Amazon said they were out of NY. Tom Giles / @tsgiles : SCOOP on the 11th hour negotiations between Amazon and union leaders aimed at keeping Amazon in NYC; one party came away hopeful that different sides had reached a deal. by @josheidelson with @dinabass http://twitter.com/...
Context & Ripple Effects
The arc here runs fast: after a wave of political and community opposition, Amazon executives spent early February in internal discussions exploring alternatives for HQ2, then on February 14-15 formally canceled the New York City project and refocused on Northern Virginia and Nashville. The Recode piece is the post-mortem: it argues the political landscape around big-ticket corporate incentives had shifted, while Amazon ran a top-down negotiation playbook built for an earlier era.
What makes this more than a local story is who was in the room at the end — reporting shows Amazon held last-minute negotiations with union leaders and local officials before pulling out, meaning the deal died despite a final push, and figures like Alexandria Ocasio-Cortez and Cuomo are now central to how the loss gets assigned.
First-order effects
- Amazon abandons its planned Long Island City campus and concentrates HQ2 growth in Northern Virginia and Nashville, while the New York officials and union leaders who negotiated the incentives are left defending a deal their constituents rejected.
- New York forfeits the projected jobs and investment tied to the campus immediately, and the state and city's incentive offer expires with the agreement rather than being renegotiated.
Second-order effects
- Cities and states courting Amazon-scale relocations now have to price in organized local opposition as a deal risk, pushing economic-development officials toward earlier community engagement or smaller, less contested incentive packages.
- Rival bidder cities for major tech campuses gain leverage: they can pitch themselves as lower-friction alternatives, as Northern Virginia and Nashville effectively just did by absorbing what New York declined.
Third-order effects
- If the pattern holds, the standard mega-relocation model — a governor and mayor negotiating subsidies behind closed doors, then announcing a done deal — gives way to relocation processes where grassroots and elected opposition can veto projects outright, raising the political cost of large incentive packages everywhere.
- For big tech specifically, expansion decisions become reputational and political calculations, not just real-estate ones, which favors distributed or incremental hiring over single flagship campuses.
The trend: Corporate mega-site selection is shifting from closed-door incentive negotiations toward politically contested processes where community opposition can kill a deal outright.