The Bridge Is Over
Or, Amazon finds the suburbs more congenial
I say, the bridge is over, the bridge is over, biddy-bye-bye!
The bridge is over, the bridge is over, hey, hey!
The bridge is over, the bridge is over, biddy-bye-bye!
The bridge is over, the bridge is over!— KRS-One, Boogie Down Productions
Today, Amazon announced it was shutting down plans to locate a satellite headquarters in Long Island City/Queensbridge, New York, bowing to fierce opposition from activists, residents, and city and state politicians. And I have time today! So you’re getting a special “The Bridge Is Over” edition of The Amazon Chronicles; this maybe the only time folks in Queens will actually enjoy listening to this song, because the people of Queensbridge actually won.
Here’s Amazon’s full statement:
After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.
We are disappointed to have reached this conclusion—we love New York, its incomparable dynamism, people, and culture—and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.
We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult.
We do not intend to reopen the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.
Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time.
Okay, so: where in the heck does that “70 percent of New Yorkers support our plans and investment” figure come from? As I noted in yesterday’s issue, Amazon consistently polls well, but not that well. Support for HQ2 in New York, whether in New York City or statewide, has consistently been in the high 50 percent. This is true whether you look at the recent Siena poll or the Quinnipiac poll conducted late last year.
70 percent is about how many New Yorkers use Amazon, not approve of its HQ2 plans. And when you start to drill down and ask questions about the state subsidies, or whether New Yorkers approve of how Mayor De Blasio and Governor Cuomo have handled the HQ2 process, those approval numbers get a lot softer. Amazon could have stuck with a simple “a majority of New Yorkers,” but the company had to go bigger. It overshot itself.
J. David Goodman at The New York Times had the best early story on Amazon pulling out of the deal, with this choice quote by State Senator Michael Gianaris, one of those New York politicians who wanted to rework Amazon’s deal:
“Like a petulant child, Amazon insists on getting its way or takes its ball and leaves,” said Mr. Gianaris, a Democrat, whose district includes Long Island City. “The only thing that happened here is that a community that was going to be profoundly affected by their presence started asking questions.
“Even by their own words,’’ he added, pointing to the company’s statement on the pullout, “Amazon admits they will grow their presence in New York without their promised subsidies. So what was all this really about?”
Congresswoman Alexandria Ocasio-Cortez refused all interviews on Amazon, instead posting this to her Twitter account:
How did we get here? Business Insider and Wired both had good overviews of the timeline of events, from Amazon’s 2017 announcement of an HQ2 sweepstakes to the present.
And where do we go from here? Well, Amazon’s Crystal City headquarters and Nashville logistics hub become correspondingly more important, even though they won’t get the full headcount that would have gone to LIC.
The early commentary has this as a “stunning defeat” for Amazon, (Jason Del Rey, Re:code) and a correspondingly large win for New York and New Yorkers. At The Atlantic, Derek Thompson writes that “New York City doesn’t need an Amazon headquarters to be the global capital of advertising and retail, and Amazon doesn’t need New York subsidies to expand its footprint in the city.” Thompson also railed against corporate subsidies, calling them “often pernicious and usually pointless.” Matthew Yglesias at Vox pivots to broader policy issues around land use and job development:
Simply put, while locating large pools of high-salary white-collar positions in the New York and DC metro areas makes a ton of sense for Amazon, it doesn’t actually make that much sense for either greater New York City or greater Washington. Amazon’s presence will tend to exacerbate those cities’ crises of housing affordability and overburdened transportation infrastructure.
And it makes no sense at all for the United States of America, which urgently needs more economic opportunity in dozens of other metro areas that have a different set of problems. America needs to find a way to do better than this. Being the home to a very large share of the world’s most dynamic high-tech companies is an incredible source of national strength, but in practical terms it does not benefit most Americans. With better policy, it could.
The open question, I think, is whether Amazon ever really wanted to build a headquarters anywhere else, or whether this was all a shell game designed to extract the largest possible subsidies from its targets of choice (New York City and Arlington, Virginia) while also gaining insight into the development plans of (and smaller growth opportunities in) dozens of other cities across North America.
When it comes down to it, Amazon doesn’t really want to be middle America’s corporate savior. It didn’t really want to be Queensbridge’s savior either. Amazon wants young, affluent, ambitious workers eager to make a lot of money cranking out the new best thing. It’s not looking to build careers for a lifetime, or any of that 20th century crap. It’s looking to crank it out.
Jeff Bezos admitted as much in a 2014 speech to shareholders that a friend pointed me to this week. I don’t have shareable video or audio of the whole thing, which is a tragedy. I do, however, have this Geekwire story that gives the piths and the gists:
“We could have built a suburban campus,” Bezos said, noting that a location outside of the city might have saved the company money. “I think it would have been the wrong decision.”
He said the types of people Amazon employs and wants to attract in the future “appreciate the energy and dynamism of an urban environment,” which means the company is more likely to get the talent it wants with an urban campus.
This is benign language, and Bezos also talks about the low commuting costs and corresponding environmental savings. (Eventually, Amazon would butt heads with the government of Seattle over a “head tax” designed to fight homelessness; it played hardball, and got its own way. For whatever reason, Amazon didn’t see that playing out the same way in New York.)
But if you look at Amazon’s history, the way it promotes people, how it vests stock options, and how it moves talent from team to team, it’s really a machine built to move people through it rather than allow them to settle in. Amazon’s not built to accommodate itself to local conditions, but to bend them to accommodate them to it.
Why did they ever think that New York City would or even could go the same way? Because the governor and the mayor told them it would. And Amazon believed that that would be enough.
New York was also a huge prize for Amazon. It’s a huge prize for any company, and Amazon was going to get billions of dollars to build there. In advertising, media, and entertainment, especially, Amazon was going to get to rub shoulders with all the companies it considers its peers: i.e., all of them.
And Amazon’s growing ad business and the unfortunate concentration of the advertising business in New York City necessitates further investment in New York. As Michael Gianaris says, that’s going to happen anyways. Queens’s loss (as it were) will be Manhattan’s gain. And Queens is going to continue to develop by leaps and bounds. It’s New York’s most interesting borough, with some of its best food and people.
But let’s say we’ve had enough of these dreams that Amazon’s going to rebuild some beleaguered city. Even if that kind of economic development worked (and it doesn’t), it’s never going to happen. Amazon’s looking for the new hotness. Amazon likes Santa Barbara. It was never going to like Schenectady. (Which is actually quite lovely.)
More next week,
Tim Carmody
https://tim-carmody.glitch.me