Amazon Drops New York City HQ2 Location

E-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) scrapped plans to build new offices in New York City.

What Happened

Amazon said it will no longer proceed with plans to build a new complex in Long Island City, Queens, The New York Times first reported. The company said it would have created more than 25,000 new jobs in the city but faced opposition from local lawmakers over the proposed $3 billion in local and state wide incentives.

Amazon said in a statement the decision to scrap plans is based on a lack of "positive, collaborative relationships with state and local elected officials who will be supportive over the long-term." Instead, the company faced local and state level politicians who "made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project."

Realted Link: Not Win Nor Place, But Nashville A Show In Race For New Amazon Locations

Why It's Important

Amazon does not intend to re-open its second headquarters at this time but will proceed as planned with new facilities in Northern Virginia and Nashville. The company will also continue to hire and grow across its 17 corporate offices and technology hubs in both the U.S. and Canada.

Statement from Mayor Bill de Blasio on Amazon:

"You have to be tough to make it in New York City. We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world. Instead of working with the community, Amazon threw away that opportunity."

— J. David Goodman (@jdavidgoodman) February 14, 2019

"This is a stunning development, with Amazon essentially giving in to vocal critics who bemoaned the tech giant’s decision to set up a new substantial outpost in Long Island City, New York," said Bankrate.com's senior economic analyst Mark Hamrick. "From a broader view, this decision will do nothing to resolve the challenges associated with housing affordability voiced by critics of the Amazon decision and the generous tax incentives offered by government. That requires a bigger conversation which could very well unfold along with the 2020 election cycle."

Amazon shares were little changed Thursday afternoon.

Brooklyn Bridge, Spanning East River between Brooklyn & Manhattan, New York City. Photo courtesy of the Library on Congress.