Following weeks of vocal unrest from a group of New Yorkers staunchly opposed to its expansion efforts in the city, Amazon ditched its new headquarters plans Thursday.
The about face has left many asking, what's next?
While experts believe Virginia could absorb the workforce that New York was supposed to hold, current plans indicate the National Landing, Virginia, project will move forward as expected without the addition. New York was a tech powerhouse before Amazon decided to build the new headquarters, and its appeal and magnetism for technology talent and investment will persist.
What happens to New York?
Technology jobs in New York City have steadily increased since the turn of the century, cementing the city's reputation as a top technology destination, and more big tech companies have established campuses and offices within city borders.
In the last decade, the city has come close to rivaling traditional technology centers such as Silicon Valley and Seattle. The city surpassed San Francisco in a recent ranking of global tech cities by real estate brokerage firm Savills.
"I don't think anyone is shedding a tear for New York City, including New York City," said Sucharita Kodali, in an interview with CIO Dive. It is "one of the most resilient, diversified and largest cities in the world."
Anyone who has ever looked for an apartment or bought a bag of groceries in New York City knows that demand far outpaces supply — and costs are high across the board as a result of it. Organizations footing the bill of doing business in the area feel the pain.
In Manhattan particularly, there will never be a shortage of takers, and it would be "foolish" for the city to try to give incentives away when demand is so high, according to Kodali. In outer boroughs such as Queens, where demand is lower and the city might want to incentivize more development, it can be a different story.
"I don't think anyone is shedding a tear for New York City, including New York City."
Sucharita Kodali
VP and principal analyst at Forrester
The combination of how public the HQ2 process was in conjunction with the lack of transparency around the actual deals left a bad taste for many, Kodali said.
What happened with Amazon is likely to discourage other companies from engaging in such a public show, she said. Amazon came out looking like the bad guy, trying to extract value from the city and take advantage of taxpayer dollars — though many city leaders who negotiated the deal didn't come out looking clean either.
With or without Amazon, other technology companies are beefing up their New York City presence. Google, for example, announced a $1 billion investment in its Hudson Square campus in December, with intentions to double its workforce capacity in the city over the next decade.
But for many years, Google has pulled in millions of dollars worth of incentives through secretive deals as it expanded its geographic footprint around the country, according to a report by The Washington Post. Other technology giants such as Apple and Amazon have done the same.
Amazon said it wouldn't restart the HQ2 bidding process, but will proceed with plans in National Landing and Nashville, Tennessee, and continue to hire across its 17 corporate offices and technology hubs on the continent.
The company continues to grow its New York City base, which currently consists of 5,000 employees across Manhattan, Brooklyn and Staten Island. The company did not say if deals from other finalist cities are off the table.
Amazon is unpredictable, Kodali said, and she could see the company going back to other cities and negotiating over the terms they had offered before.
Attention turns to Virginia
Many people are wondering if the National Landing location could grow as a result of the New York cancelation. The Arlington project was set to add 25,000 jobs in Phase I of the project with the potential for 12,850 in Phase II.
Leaders from Arlington County and Nashville — where the city is set to expand its operations business — have said they do not expect changes to their respective deals in light of the New York news. Virginia's legislature already approved a robust incentives package for the company.
The National Landing area could accommodate the full 50,000 jobs that both headquarters projects were cumulatively set to add, but Arlington County Board Chair Christian Dorsey does not think the county will present itself to assume the volume of the New York project, he told reporters on a conference call Thursday.
However the New York changes affect Virginia, "it certainly makes it less complicated whether we call this HQ2 or HQ2B."
Christian Dorsey
Chair of the Arlington County Board
Many local businesses, especially tech companies, and leaders were thrilled at the addition of Amazon to Virginia.
"When Amazon announced half of its HQ2 would be in National Landing, this move was a capstone solidifying what we've known for a long time — the DMV can compete as a world-class center for technological advancement, R&D, innovation, and tremendous growth," according to Steve Cooper, partner and co-founder of Arlington-based Excella and board member for the Arlington Chamber of Commerce, in a statement provided to CIO Dive. "If we can capture more of the HQ2 project, then New York's loss will be our gain."
It's no surprise that local leaders would be quick to publicly assure stability in the remaining headquarters project.
But local grassroots opponents in Virginia have not given up on fighting the HQ2 plan and will continue to fight Amazon's project, Smart Cities Dive Reports.
For many opponents, the argument against extending so many incentives to a corporation like Amazon goes down to the fact that the company will avoid paying a lot of taxes even as it benefits from the public goods others are funding, Kodali said.
Does hiring thousands of people mean a business did its duty as a corporate citizen and can call it even, she asked. Or should it have to pay?
Cooper was surprised by the opposition from many New Yorkers. "An economic opportunity like this doesn't come along often, and Arlington gets this," he said. The message of Governor Cuomo and other state leaders was not unified and shared by everyone, but Cooper believes Virginia's leaders and its workforce understand the jobs and progress for Virginia.
National Landing could accommodate all 50,000 HQ2 jobs, but the county will not present itself to assume the volume of the New York project.
Christian Dorsey
Chair of the Arlington County Board
Virginia Economic Development Partnership President and CEO Stephen Moret reinforced Virginia's business climate and world-class talent as an "ideal combination for any leading tech company or corporate headquarters," reinforcing his pride in having Amazon as a corporate partner in the Commonwealth in a statement provided to CIO Dive.
"We are excited that Amazon's plans for Virginia remain in place and that we can continue working together to position Virginia's dynamic tech sector for healthy, sustained, statewide growth," he said.
Others hope the project will boost Arlington's reputation as a tech center — a designation it has been "underappreciated" in, according to Cooper. Amazon — and other tech companies like Google, which is expanding its Virginia presence — recognize the talent pool in the area, "and now more of this talent will be flocking to our backyard," he said.
National Landing has the infrastructure, energy and talent to expand the HQ2 project in a way that "won't be bad for anyone," bringing in high-paying jobs, tax revenue and infrastructure development, Cooper said. This will boost the entire area and its tech community.
The newly-branded "National Landing" area set to house the project is an underutilized area in the central D.C. metro area.
The city was planning for growth and investments in the area a decade ago, long before Amazon's new headquarters was on the table, according to Dorsey. Officials were prepared for the influx of people into the area, as well as what opposition might come out of it.
However the New York changes affect Virginia, "it certainly makes it less complicated whether we call this HQ2 or HQ2B," he said.
