Can New York win another HQ2?

Amazon headquarters located in Silicon Valley.
Amazon headquarters located in Silicon Valley.
Sundry Photography/Shutterstock
Amazon headquarters located in Silicon Valley.

Can New York win another HQ2?

Some are still begging for Amazon to come back, but their approach to winning the next HQ2 might need some adjustments.
March 1, 2019

Gov. Andrew Cuomo is still fighting to win back a new Amazon headquarters in Queens – along with more than 70 other parties who signed an open letter this week to Amazon boss Jeff Bezos – despite the fact that Bezos and his company have shown no signs of regretting their decision to cancel plans to place half of Amazon’s HQ2 in Long Island City.

On Friday, Cuomo said that his behind-the-scenes maneuvering is less about winning them back and more about maintaining New York’s reputation as a business-friendly city. “I have no reason to believe that Amazon is reconsidering,” Cuomo said during an interview on WNYC’s The Brian Lehrer Show. “I think the point was more, not that Amazon is going to change its mind, I don’t think that they do. But, the truth should be known because this was a national story and it had damning consequences for New York. We don’t want anyone to think that New York doesn’t understand that we are the home of entrepreneurial business, and we want young people coming here and new talent. And New York is open for business.”

The report about Cuomo’s last-ditch phone calls to Bezos – as well as the open letter signed by elected officials, union bosses, and business and community groups U.S. Rep. Carolyn Maloney, whose district includes Long Island City, and the Partnership for New York City, a pro-business organization – first ran in The New York Times late this week. “We know the public debate that followed the announcement of the Long Island City project was rough and not very welcoming. Opinions are strong in New York – sometimes strident,” the open letter read, calling to mind New York City Mayor Bill de Blasio’s comments about New York’s grit after Amazon pulled out. “We consider it part of the New York charm! But when we commit to a project as important as this, we figure out how to get it done in a way that works for everyone.”

But the problem with the HQ2 deal was that opponents believed it didn’t work for everyone. Aside from the nearly $3 billion in tax breaks and subsidies that angered many progressives, a new tech headquarters also promised to introduce added strains on New York’s already-crumbling subway system and the influx of new high-paying jobs would force some current Queens residents out of their homes due to the rising cost of rent. These are issues that other cities which house giant tech companies – like Seattle and San Francisco – are still fighting, but critics say that New York didn’t do enough to ensure that the city wouldn’t face the same problems when HQ2 moved into Long Island City. If that’s the case, why send a letter without answering those criticisms, or even producing a plan to make HQ2, or attracting other big new corporate campuses, beneficial to New Yorkers who wouldn’t personally work there?

Lena Afridi, director of economic development policy at the Association for Neighborhood & Housing Development, a coalition of affordable housing advocacy groups, said that the responsibility is not solely on Amazon to assure community members that the negative effects of their presence could be mitigated. “It's really up to the state,” she said. “One of our concerns when the project was still slated to happen was that the immediate area outside of the proposed site, it's comprised of a ton of rental (housing) stock that's not regulated at all. So those folks already face displacement pressures that would just become compounded by a huge, huge, development like Amazon coming in.”

Signaling how demanding some of Amazon’s foes could be, however, Afridi called for policies that were unlikely to be enacted, including universal rent control. That, and broad tenant protections, would have gone a long way in allaying community concerns about affordable housing and displacement, she said. “The universal rent control and real tenant protections are a tangible solution that could help not just in this instance, but in big development in general,” she said. Universal rent control is hardly a narrowly tailored or Amazon-specific proposal. It’s a pre-existing policy proposal in certain corners of the left and it would represent an enormous and controversial shift in state policy – one which the housing industry contends would actually exacerbate the housing shortage by discouraging development.

Afridi also said that Amazon should have guaranteed that some of the promised 25,000 jobs go to Queens residents – and, to members of various demographics and populations, based on neighborhood. Amazon did commit 30 jobs to residents of New York City Public Housing Authority developments, but Afridi said that wasn’t enough.

Tom Wright, who signed the open letter to Bezos this week and is the president and chief executive of the Regional Plan Association, pointed to the other half of HQ2 in Crystal City, Virginia, as a model for how New York could strike deal that would both appease critics and attract tech companies in the future. “The situation in Arlington was that they had a vacant space and they've been doing a community based plan for bringing jobs and economic development there, and then when Amazon came, essentially they were just signing on to the plan that had already been created,” he said. “That's what should be happening here.”

The $3 billion deal to attract Amazon was kept private between the city, state and Amazon – angering local lawmakers who were cut out of the process – but Afridi said that it’s the community members who need to be brought into the fold, too.“Without a public process, we can't really speak to what folks would need in their communities, because there's no capacity for them to speak on it.” Wright agreed that an open process would be more likely to draw in community members and assure tech companies that blowback from critics could be minimized. “The bigger thing is that it should never be a secretive process,” Wright said. “It's gotta be something that's done in an open, transparent, collaborative way – ideally, before it's negotiating with a single company.”

While proponents of the deal often responded to criticisms that the new headquarters would strain public transit and cut back on affordable housing by pointing to the $27.5 billion in tax revenue that Amazon promised to produce, a more effective method might have been communicating what investments should be made into those needy areas ahead of time. “With Amazon, it became, ‘They're going to bring these jobs so what transportation investments do we need? ‘What kind of parks and schools and community investments do we need?’” Wright said. “That's the reverse order, of course. It ought to be, ‘Here, we're going to make these investments in transportation, in housing, in community resources, and make ourselves an attractive place for an Amazon to come to.’”

Jukay Hsu, who also signed the open letter, is the founder and chief executive officer of Pursuit, a tech training organization that was set to operate the job-training center on the HQ2 site. Hsu agreed that communication was an issue, but that details about community investments were just at their beginning stages. “I think there's a lot more to communicate. I think we were just seeing the beginning of the process, and I think that's why a lot of people were, myself included, disappointed by this outcome,” he said. “Oftentimes these projects are long, and I think there's a lot more we would both want to communicate, and I think that could have certainly been better on all parties.”

Kathryn Wylde, the president and chief executive officer of the Partnership for New York City, who also signed the open letter, was optimistic that commitments to the community would have been made. “There was a process that began with real community engagement on workforce planning and infrastructure issues that I think would have led to a very good end, where people would've been satisfied, had input and impact on the project,” she said. “But just as it was getting started, Amazon pulled out.”

Cuomo is still pulling for the deal, despite admitting himself that Amazon is unlikely to come back to New York, but Democratic political consultant Bruce Gyory said that is a smart strategy for Cuomo. Given that the Amazon headquarters was supported by a majority of New Yorkers – both in Queens specifically and in the suburbs – it behooves Cuomo to show that he won’t give up fighting for HQ2 even if the end goal is moot. “You punch until you hear the bell and the bell hasn’t sounded, and until somebody rings a bell I'm going to keep pushing,” Cuomo told Brian Lehrer on Friday morning. “I don’t believe that they will reconsider, but I am hopeful. But I think sending the message to other business, please don't be confused, we're open for business.”

Annie McDonough
Annie McDonough
is a tech and policy reporter at City & State.