New York Could Have Avoided HQ2 Heartbreak
(Bloomberg Opinion) -- How romantic. Amazon chose Valentine’s Day to break off its engagement with New York City, announcing that it has withdrawn plans to build a sprawling corporate campus in Queens.
In truth, who could blame one of the world’s most valuable companies from feeling spurned? It promised a long-term relationship: as many as 40,000 jobs with an average salary of $150,000 over the course of two decades. And what did it get in return? A chilly response.
There were objections from citizens, politicians and neighborhood groups to the $3 billion in subsidies the city and state were offering the company. There were fears that affordable neighborhoods would suddenly become out of reach for New York’s struggling middle class. There was concern that the city’s crumbling transit systems would crumble even faster under Amazon’s burden. And there was petulance on the part of officials who had not been included in negotiations.
Some of these concerns were reasonable; all of them could have been addressed and resolved with smarter management and better leadership. New York City will survive without Amazon, but it would have been much better off with it. For this reason, it’s worth reflecting on the lost opportunity and the lessons it offers.
It’s not just the money. Tax breaks and subsidies certainly made New York attractive to Amazon. But lots of other cities offered similarly sweet deals. Amazon chose New York because of the creative capital the city had to offer. The HQ2 campus would have been a baseball’s throw from another one — that of Cornell Tech on Roosevelt Island. (Bloomberg L.P. founder Michael Bloomberg is a supporter of Cornell Tech.) The two would enrich each other — technology companies depend on a pipeline of graduates from good engineering schools — and the broader city. Vibrancy breeds vibrancy.
Leaders have to lead. The government officials who did so much to lure Amazon to New York failed to do enough to explain to New Yorkers what the company’s presence would mean for them. This includes the one big thing cities need to survive: jobs — in this case, the jobs Amazon promised, the estimated 82,000 indirect jobs that would follow, and the robust tax revenue that would accompany it all.
A word to the leaders who are trumpeting Amazon’s withdrawal: The city now has a reduced capacity to improve education, housing, health care and more. These are all services that Amazon’s presence would have supported. When they are constrained, the effects fall most heavily on the less fortunate. It’s incumbent on the officials who pushed the company away to account for the loss.
Business needs certainty. Businesses large and small need to plan; they need to know what’s ahead. Amazon’s future in New York got blurrier the longer it was here. It’s a cruel twist that the most definitive part of this adventure has been Amazon’s departure.
This is an unhappy day for New York — and potentially an ominous one. Tech-world entrepreneurs are going to think twice before considering a relationship with the city, questioning its steadfastness and commitment. HQ2 is no more. All cities should learn from this breakup.
Editorials are written by the Bloomberg Opinion editorial board.
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