Dive Brief:
- Amazon is reportedly reconsidering New York City as the second location for its new headquarters following local and political opposition to the deal, people familiar with the matter told the Washington Post. The company does not have specific plans yet, but executives have been assessing the situation and exploring alternatives.
- As the company prepares for more city and state meetings, it is unusual that the deal still hasn't been approved, reports the Post. Amazon has to start hiring or projects will fall behind. Governor Andrew Cuomo and Mayor Bill de Blasio remain advocates of the deal and point to opponents as a vocal minority.
- With the promise to bring 25,000 new jobs and a variety of development projects to the area, Amazon could use the threat to pressure city officials, according to the Post. The company has yet to lease or purchase any of the properties for the new location, and final approval from the state for the incentives being extended to Amazon are not expected until next year.
Dive Insight:
Hiring for the Arlington, Virginia headquarters begins this year and the company expects to bring 400 jobs to the area, according to its memorandum of understanding with Virginia.
The company projected 700 net new jobs in New York this year, with more than $64 million in investment coming to the city. With the plans for the headquarters deal potentially in limbo, Amazon could delay the bulk of the hiring until later in the year.
Political conditions in New York also took a turn recently when opponents named state Senator Michael Gianaris to the state board responsible for handling the $3 billion deal. Cuomo has yet to announce whether he will approve Gianaris, a vocal critic who has said he is not interested in trying to renegotiate.
Amazon's headquarters would bring 25,000 jobs to New York City with the potential for an additional 15,000. But critics have pointed to hundreds of millions of dollars in tax breaks being offered by a city struggling to meet the needs of many of its residents.
While top New York leadership has downplayed concerns that the deal will fall through, what would happen if it does remains unclear. The shadow of scrapping the deal in New York would loom over any alternative option, and cities could be wary of offering large incentives for headquarters because of political discontent.
