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Business Review Board / Feb. 15, 2019

Amazon Pulls NYC HQ2 — Cuomo Blames Ocasio-Cortez

A state already reeling from tax revenue loss misses out on at least 25,000 new jobs.

The speculation turned out to be authentic. On Thursday, Amazon officially reneged on its New York City headquarters. The rumor that it would do so first appeared last Friday in The Washington Post, which disclosed that “Amazon.com is reconsidering its plan to bring 25,000 jobs to a new campus in New York City.” The Post elaborated, “The project … faces withering criticism from some elected officials and advocacy groups appalled at the prospect of giving giant subsidies to the world’s most valuable company, led by its richest man.” A man who, by the way, owns The Washington Post.

“After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens,” Amazon announced yesterday. Why? “A number of state and local politicians have 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 we and many others envisioned in Long Island City.”

One of those politicians is actually Rep. Alexandria Ocasio-Cortez, who crowed about having “defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world.”

Democrat Gov. Andrew Cuomo, already battling a revenue shortfall in the state, isn’t happy. He complained, “A small group politicians put their own narrow political interests above their community — which poll after poll showed overwhelmingly supported bringing Amazon to Long Island City — the state’s economic future and the best interests of the people of this state.” He didn’t name Ocasio-Cortez, but the Millennial heartthrob was clearly one of his prime targets.

The second headquarters was to be split between Queens, New York, and the DC suburb of Crystal City, Virginia — a determination that our Thomas Gallatin previously reported was cronyistic from the get-go. “In the end, the reasoning behind this decision is obvious: direct access to the levers of financial and political power in two high-profile leftist enclaves,” wrote Gallatin. “Instead of locating the new headquarters in the most business-friendly states and environments, Amazon chose leftist power centers knowing that the company will be able to seamlessly pass on any higher costs to consumers. And the tax benefits to Amazon work out to almost $50,000 per job created. Cronyism at its finest.”

In this regard, Amazon’s backtracking is good. It’s one thing if a neighborhood decides it doesn’t want a huge corporate HQ in its backyard, but Amazon had no other choice given the prevailing political headwinds.

According to New York City Mayor Bill de Blasio, “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.” The truth is New York City should not have been a finalist, especially when superior suitors were fiercely vying to be selected. Amazon says, “We do not intend to reopen the HQ2 search at this time.” Regardless, it has an opportunity to make a better business decision than it did back in November.

As the Washington Examiner saliently puts it, “In the end, the termination of this deal is a win for everyone. The socialists get to crow about keeping their neighborhoods poor. New York’s taxpayers don’t have to pay Jeff Bezos exorbitant sums to do business in their state. And Amazon, having learned its lesson about dealing with socialists, might benefit as well if, instead of seeking special handouts, it seeks in the future to create jobs in low-tax states with right-to-work protections and a friendly-but-fair business climate for everyone.”

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