Spotlight: Amazon's decision to ditch New York expansion plans leads to mixed reactions

Source: Xinhua| 2019-02-17 15:07:09|Editor: Li Xia
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by Xiong Maoling

WASHINGTON, Feb. 16 (Xinhua) -- U.S. e-commerce giant Amazon's decision to pull out of a planned corporate campus in New York City might came as a victory for those who strongly opposed its presence, but some argue that it's a major loss for the city in the long run.

In an unexpected announcement, the Seattle-based company said on Thursday it would not build a new headquarters in Long Island City due to opposition from "some state and local politicians." Amazon said it made the decision "after much thought and deliberation."

"I think it's a shocker for everybody, particularly in New York," David Reibstein, a marketing professor from Wharton School of the University of Pennsylvania, told Xinhua.

Reibstein, who has been following the issue closely, said he believes the strong resistance in New York came from some politicians and residents who argue that the reportedly 3-billion-US-dollar incentives are unnecessary. Labor unions regarded Amazon as "a hard negotiator."

The company's new headquarters plan has drawn backlash since November, when it announced its decision to split its new headquarters between Long Island City in the New York City borough of Queens and Crystal City, Arlington County in the state of Virginia.

Alexandria Ocasio-Cortez, who represents the Bronx and Queens in the U.S. House, has been one of the most vocal critics. She didn't refrain from expressing her joy shortly after Amazon's announcement.

"Today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon's corporate greed, its worker exploitation, and the power of the richest man in the world," she tweeted.

New York State Governor Andrew Cuomo didn't share Ocasio-Cortez's sentiments. In a statement, the governor denounced the New York State Senate, 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... the state's economic future and the best interests of the people of this state," Cuomo said.

Reibstein said he also believes Amazon's retreat would be "a huge loss" for New York. The 25,000 plus high-paying jobs, considerable tax revenues, all the auxiliary businesses, and the image of New York being even more of a "tech hub," are among the benefits that the city won't be able to enjoy, he said.

However, some are relieved that New York's incentive package is now off the table. In an opinion piece titled "New York doesn't need Amazon's sweetheart deal" published Thursday by The New York Times, Bryce Covert said that huge incentive packages are a burden for taxpayers, and she encouraged other cities to follow New York's lead.

"While not all of those who spoke out against the deal wanted it scrapped, they were united by a common concern: Why does a company with billions in profit need billions of New York's money to bring 25,000 jobs to a city where it already has a significant presence? Especially after the company admitted that such enticements were a secondary factor in its decision making?" she argued.

The U.S. online retail powerhouse currently employs over 5,000 workers in Brooklyn, Manhattan, and Staten Island in New York City.

These kinds of economic incentive deals are typically struck "with little public oversight," Covert said, noting that such tax incentive deals might not have the intended impact.

Reibstein said the pullout highlighted the importance of communicating with the public in such major decisions. "The city failed to do an adequate job of really understanding and assessing what the community's reaction was going to be," he said.

"They needed to educate the community about what would be the benefits of having Amazon located there," Reibstein said, adding that the company should have helped in that as well.

Amazon said polls show 70 percent of New Yorkers support its plans and investments in the city, but some in the community have voiced their concerns about the rising cost of living and added traffic congestion due to the influx of high-paid employees.

The company said it does not intend to search for an alternative site for its second headquarters, but it will continue its headquarters plan in Arlington, a suburb of the capital Richmond, and push forward with the construction of a new operation center in Nashville in the state of Tennessee.

Just hours after Amazon's announcement, Virginia officials held a call with reporters and confirmed that the company's expansion plans in Arlington remain.

Christian Dorsey, Arlington County Board chairman, said his area had done a better job in making preparations for the arrival of Amazon, which "highlighted a particular community dynamic in a region that has its act together."

Reibstein said the company can easily just expand what they had originally planned for the Virginia operation, instead of looking somewhere else. "They clearly need to do more diligence of what the receptivity is going to be. They don't want to go into another city and find the same repercussions."