Spotlight: Experts, officials say Amazon's retreat potential loss for New York City

Source: Xinhua| 2019-02-15 18:12:40|Editor: Yamei
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by Xinhua Writers Wang Wen, Zhou Xiaozheng, and Chang Yuan

NEW YORK, Feb. 14 (Xinhua) -- Amazon's retreat from New York might be more detrimental to the city rather than the company, local experts and officials said here Thursday.

The online retail giant announced earlier in the day that it would not build a second headquarters in New York City as planned, due to strong opposition from a number of local politicians.

Its decision was made "after much thought and deliberation," said the company in a statement.

"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," said the statement.


The change of the plan might not affect the company's expanding strategies much, experts commented, as Amazon will still push forward its plan in Crystal City, a neighborhood in southeastern Arlington, Virginia.

In November last year, the online retail giant announced its plan to split its new headquarters between Long Island City in New York's borough of Queens and Crystal City.

It originally planned to invest 5 billion U.S. dollars and create more than 50,000 jobs at the two new headquarters locations.

Without New York City, Amazon still has a lot of growth opportunities in Crystal City and many other regions across the country, said Ari Ginsberg, professor of entrepreneurship and management at New York University's Stern School of Business.

He added that Amazon's announcement is unlikely to affect its stock price, "because they are growing their revenues tremendously through technological innovation, and the consumer demand continues to grow for the services they provide."

Amazon's reputation will be little affected too, because the announcement did not look like the company itself was reneging on the deal, said the expert, who has been following tech companies' development plans.

That's because the company has presented its position clearly. While it had to secure the best deal possible for its shareholders, the deal would be a good return of an investment for the city as well, said the professor.

Amazon shares barely moved after the announcement, closing 1.06 percent lower at 1,622.65 dollars apiece.


New York City Mayor Bill de Blasio on Thursday expressed disappointment on the news.

"You have to be tough to make it in New York City," de Blasio tweeted. "Instead of working with the community, Amazon threw away that opportunity."

The city has the best talent in the world and the city government is working on growing a stronger and fairer economy for everyone, added the mayor.

"If Amazon can't recognize what that's worth, its competitors will," the mayor said in a following tweet.

New York State Governor Andrew Cuomo denounced the New York State Senate in a statement, saying that they should be "held accountable for this lost economic opportunity."

"A small group of politicians put their own narrow political interests above their community ... (and) the state's economic future and the best interests of the people of this state," he said, without naming those vocal political figures in opposition of the Amazon deal.

Both de Blasio and Cuomo had previously welcomed the deal and promised to offer the company a total of some 3 billion U.S. dollars in tax breaks if it realized the employment goal.

But the plan incurred fierce opposition from local residents and some politicians, who argued that the deal would not directly benefit New Yorkers and the incentives should instead be invested in improving local infrastructure.

Ginsberg said New York's potential loss is mainly focused on two areas.

Developing the city's innovation ecosystem would be slower than it would otherwise because talents and startups that would have followed Amazon to New York might now change their mind, he said.

Another downside is that the government of New York could be considered difficult to deal with, and companies planning big projects might turn to other states or cities for incentives, added the expert.