Amazon 'considers pulling the plug on its New York headquarters' and jeopardizing 25,000 new jobs after public backlash against tax cuts

  • Amazon announced in November it would have two new headquarters, one outside DC in Virginia and one in Long Island City, Queens
  • Some local lawmakers said Amazon received too many tax and other benefits
  • A Washington Post report says the firm is now reconsidering the branch's New York location 
  • Alexandria Ocasio-Cortez celebrated the alleged about-turn, urging 'everyday people' to stand up and continue opposing Amazon
  • Under the plan, Amazon would receive performance-based incentives of $1.525 billion from the state, including an average $48,000 for each job it creates  
  • Governor Andrew Cuomo lambasted New York Senators on Friday saying the resistance shown by lawmakers is a 'governmental malpractice'  
  • Amazon has denied the claims to CNN, saying they remain dedicated to the project and proving to local residents what benefits they'll bring 

After a litany of local opposition, Amazon is said to be considering pulling the plug on its plans to open a new headquarters in New York, potentially jeopardizing 25,000 new jobs in the city. 

The online retailer has not yet purchased or leased any land for the multi-billion dollar project, which would allow it to withdraw the plans easily, an anonymous source told the Washington Post.

According to the source, Amazon executives have allegedly held internal discussions recently to reassess the situation in New York and explore alternative sites.

Amazon.com is reconsidering locating part of its new headquarters in New York because of local opposition. Amazon said in November it would branch out from its home base in Seattle with plans to create more than 25,000 jobs

Amazon.com is reconsidering locating part of its new headquarters in New York because of local opposition. Amazon said in November it would branch out from its home base in Seattle with plans to create more than 25,000 jobs

This November photos from Long Island City shows the area Amazon had planned to take over for their New York headquarters

This November photos from Long Island City shows the area Amazon had planned to take over for their New York headquarters

The reported change of heart coincided with Amazon's share prices falling around 2.4 percent on Friday.

In November, the Jeff Bezos-owned firm revealed it would branching out from its home base in Seattle, and unveiled New York City and Arlington as the lucky suitors of its 50,000 combined job plan.

The retailer said it planned to spend $5 billion on the two new developments, and hoped to get more than $2 billion in tax credits and incentives with plans to apply for more.

At the time, New York Governor Andrew Cuomo lauded the announcement as an economic triumph, but critics hounded the state for providing too many subsidies in order to sanction the deal.

Amazon has mailed flyers to Queens residents touting the economic and employment benefits of its New York expansion hoping to blunt opposition, but protests still persisted.

Amazon announced after a yearlong search that it would split its 'HQ2' between Arlington, Virginia, outside the US capital, and the Long Island City neighborhood in the New York borough of Queens (above)

Amazon announced after a yearlong search that it would split its 'HQ2' between Arlington, Virginia, outside the US capital, and the Long Island City neighborhood in the New York borough of Queens (above)

A demonstrator holds a sign at a rally to protest Amazon's new location workplace in Long Island City in Queens

A demonstrator holds a sign at a rally to protest Amazon's new location workplace in Long Island City in Queens

A critic of the plan, Queens state Senator Michael Gianaris, was appointed to a panel charged with approving the new Amazon campus, and has the power to block the plan.

Last week, city council members challenged Amazon company executives for a second time at a public hearing where activists jeered and booed holding anti-Amazon placards. 

In a statement on Friday, Cuomo lambasted Gianaris and other members of the New York Senate for their short-sighted view of Amazon's potential impact on the borough and beyond.

'For the State Senate to oppose Amazon, was governmental malpractice. And if they stop Amazon from coming to New York, they're going to have the people of New York State to explain it to,' he said.

'I've never seen a more absurd situation where political pandering and obvious pandering so defeats a bonafide economic development project.  

'We incentivized Amazon to come, as we incentivize every big business to come. You know what the incentive package was? We get $27 billion in revenue, they get $3 billion back.

'I would do that all day long.'

The world´s largest online retailer plans to spend $5 billion on two new developments in Long Island City, in  Queens, and in Arlington, Virginia, and expects to get more than $2 billion in tax credits and incentives with plans to apply for more

The world´s largest online retailer plans to spend $5 billion on two new developments in Long Island City, in Queens, and in Arlington, Virginia, and expects to get more than $2 billion in tax credits and incentives with plans to apply for more

Amazon was met with disapproval and opposition. This photo is from a January protest

Amazon was met with disapproval and opposition. This photo is from a January protest

Democrat Alexandria Ocasio-Cortez, whose constituency borders the prospective Amazon site, has also voiced stark opposition towards the plans.

The freshmen US Representative cited inevitable rental hikes and displacement as her main causes of concern, using those seen in Seattle as evidence of what's to come.

In a tweet on Friday, she said: 'Can everyday people come together and effectively organize against creeping overreach of one of the world’s biggest corporations?

Yes, they can.' 

The social media message came as a follow up to her previous comments from when the proposal was initially unveiled.

'Amazon is a billion-dollar company,' she wrote in November. 'The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here.' 

The following month, City Council Speaker Corey Johnson echoed Ocasio-Cortez's sentiments.

'We have a crumbling subway system, record homelessness, public housing that is in crisis, overcrowded schools, sick people without health insurance and an escalating affordable crisis,' he said. 

'Is anyone asking if we should be giving nearly $3 billion in public money to the world's richest company?' 

Congresswoman-elect Alexandria Ocasio-Cortez, a self-proclaimed Democratic socialist whose district is adjacent to Long Island City, also spoke out to decry the deal to bring an Amazon campus to Queens

Congresswoman-elect Alexandria Ocasio-Cortez, a self-proclaimed Democratic socialist whose district is adjacent to Long Island City, also spoke out to decry the deal to bring an Amazon campus to Queens

In a tweet on Friday, the freshman US Representative urged 'everyday people' to fight back against Amazon's plans

In a tweet on Friday, the freshman US Representative urged 'everyday people' to fight back against Amazon's plans

The alleged leak was thought to possibly be a ploy by the e-commerce behemoth to negotiate even more favorable terms at the eleventh hour. 

But in a statement to CNN, Amazon denied they were considering revoking the HQ2 plans.

'We're focused on engaging with our new neighbors — small business owners, educators, and community leaders.

'Whether it's building a pipeline of local jobs through workforce training or funding computer science classes for thousands of New York City students, we are working hard to demonstrate what kind of neighbor we will be.'

According to The New York Times, Amazon executives are fearful over the uncertainty of the plans with regard to the senate, having already made significant investments of money and time.

They haven't however made any contingencies plans for a potential plan b should their proposal suddenly be blocked. 

The split second headquarters, which Amazon called HQ2, attracted 238 proposals from across North America in a year-long bidding war that garnered widespread publicity for the company. 

Amazon ended the frenzy by dividing the spoils between the two most powerful U.S. East Coast cities and offering a consolation prize of a 5,000-person center in Nashville, Tennessee.

At the outset of its search last year, Amazon said it was looking for a business-friendly environment. 

Buried in the 32-page proposal was also a controversial clause allowing the company to build a roof-top helipad - which have been banned in the city since 9/11.

According to Slate, Amazon's agreement with New York doesn't require the company to contribute any funds to the city's ailing subway system.

It does however include a clause requiring them to make 'payments in lieu of property taxes', which at least half of which will be invested in the 'Infrastructure fund' overseen by the New York City Economic Development Corporation.

The fund will support projects 'including but not limited to streets, sidewalks, utility relocations, environmental remediation, public open space, transportation, schools and signage,' around the eventual headquarter site.

The company said it will receive performance-based incentives of $1.525 billion from the state of New York, including an average $48,000 for each job it creates.

It can also apply for other tax incentives, such as New York City's Relocation and Employment Assistance Program that offers tax breaks potentially worth $900 million over 12 years. What benefit the company would actually get was unclear.

In November, President Trump renewed his assault on the retail giant and warned New York lawmakers they may regret showing Bezos' company so much leniency.

'They’re giving up a lot; they’re expensive deals. Only time will tell. Maybe Amazon will have massive competition and they won’t be the same company in five years in which case it would be a big mistake,' Trump told The Daily Caller.   

Amazon wasn't the only online giant to cement its future in America's financial captial.

In December, Google said it would invest more than $1 billion on a new campus in New York, creating thousands of jobs. 

WHAT WILL TAXPAYERS PAY AMAZON? WHAT WILL THEY GET?

Amazon stands to get nearly $2.5 billion in tax breaks and other incentives as part of its deals to open up two new offices with more than 25,000 new jobs at each location. New York City and Arlington, Virginia, won the competition Tuesday to house Amazon's two new offices, which are being called the second and third headquarters locations for the Seattle online retailer. Nashville, Tennessee, was selected to become an operations hub. Following are some of the perks Amazon says it will get, along with the benefits to the chosen cities.

NEW YORK CITY - Long Island City  

Incentives offered to Amazon:

  • Performance-based direct incentives of $1.525 billion, based on 25,000 full-time, high-paying jobs created. This includes a refundable tax credit of up to $1.2 billion calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to $48,000 per job for 25,000 jobs with an average wage of over $150,000.
  • Cash grant of $325 million based on the square footage of buildings occupied in the next 10 years. 
  • Amazon will also apply for as-of-right incentives including New York City's Industrial & Commercial Abatement Program and New York City's Relocation and Employment Assistance Program. There was no dollar figure immediately attached to this benefit.

City Benefits:

  • More than 25,000 full-time jobs.
  • $2.5 billion investment from Amazon.
  • Facilities totaling 4 million square feet, with the potential to double in size.
  • Projected incremental tax revenue of more than $10 billion over 20 years.

ARLINGTON, VIRGINIA - Neighborhoods close to Reagan National Airport

Incentives offered to Amazon:

  • Performance-based direct incentives of $573 million based on 25,000 jobs created with an average wage of over $150,000. 
  • Cash grant of $23 million over 15 years based on the incremental growth of existing tax on hotel rooms.

City Benefits:

  • More than 25,000 full-time jobs with average wage exceeding $150,000. 
  • $2.5 billion investment from Amazon. 
  • Facilities totaling 4 million square feet, with the potential to double in size. 
  • Projected incremental tax revenue of $3.2 billion over 20 years.

NASHVILLE, TENNESSEE

Incentives offered to Amazon:

  • Performance-based incentives of up to $102 million based on 5,000 jobs created over 7 years with an average wage of over $150,000.
  • Cash grant of up to $15 million based on $500 for each job created over the next 7 years.
  • Job tax credit to offset franchise and excise taxes from the state of Tennessee of $21.7 million based on $4,500 per new job over the next 7 years.

City Benefits:

  • 5,000 full-time jobs with an average wage exceeding $150,000.
  • More than $230 million in investment.
  • 1 million square feet of energy-efficient office space.
  • Estimated incremental tax revenue of more than $1 billion over the next 10 years.

               — Associated Press

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