Mark Lennihan/AP

Amazon’s HQ2 Fiasco Will Cost the Company More Than It Costs New York

The mega-company has bucked dealing reasonably with New York City, Seattle, and any community that asks them to pay for its freight.

In an economic development Valentine’s Day from hell, Amazon broke up with New York City today. As Amazon dropped Long Island City, Queens, as part of its second headquarters, the company showed its true colors.

Despite being a trillion-dollar enterprise, Amazon has refused to pay for its freight in communities, including Seattle. Instead of reacting reasonably to opposition to the HQ2 deal from state Senator Michael Gianaris, city council members, Congresswoman Alexandria Ocasio-Cortez, and neighborhood activists, Amazon decided it only wants to play its game on its own terms.

But how big companies enter communities shouldn’t be handled like a ploy directed at gaming the system and extracting maximum incentives from cities. Amazon should not treat cities with tactics of exploitation and abuse.

The right thing for Amazon to do would have been to be a true partner for New York City: stay, make it work, and hire people in support of New Yorkers. Instead, Amazon has decided to leave New York City behind in favor of other regions it considers to be more hospitable. (Amazon has announced that it will not re-open the search process and will proceed only with northern Virginia and Nashville.)

As I have written before and will say again, it’s past time for city leaders across the country to stand up to Amazon, demand much-needed tax revenues instead shying away from taxing big businesses, and show support for the people in their neighborhoods. In New York, this movement has started in earnest. In a new proposal this week, state lawmakers are asking their fellow states to join them in an interstate compact to oppose incentives races like the one for Amazon. I would add to that call an ask for the mayors and former mayors considering running for president to stand up against incentives.

For such an analytically-minded company, which did such an extensive selection process, Amazon should have been able to predict that the incentives would generate a backlash. Even during the selection process, the signs of resistance movements across the U.S. were evident, from new legislative proposals, to protests and rallies. New York City in particular, a region with an already-robust economy, was well positioned to resist Amazon. And yet, the company turned a blind eye. New York Governor Cuomo and Mayor de Blasio drank the Kool-Aid they sold to Amazon. The Amazon HQ2 process has created a PR fiasco that has damaged the potential for cities and tech companies to work together effectively and to communities’ benefit. It will almost certainly hurt Amazon more than losing the HQ2 will hurt New York.

And that PR fiasco may just be getting started. To assume that everything is rosy in Crystal City, Arlington, and nothing like “activist NYC” is flawed. The mega-company shouldn’t expect zero backlash from the greater D.C. area. In fact, Amazon’s departure from New York City might embolden activists in the D.C. area, which has a large activist community as well. It would be perfectly reasonable to anticipate backlash left to come, especially after the news of an Amazon exit from New York City.

This is far from over.

CityLab editorial fellow Nicole Javorsky contributed research and editorial assistance to this article.

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