Amazon is scrapping its plans to build a corporate campus in New York City after caving in to mounting opposition from local residents and politicians.
The announcement comes as New York Governor Andrew Cuomo and New York City Mayor Bill de Blasio were pushing hard to bring the online retail giant in with the prospect of creating over 40,000 jobs in the next 20 years with an average salary of $150,000.
However, the move met heavy opposition after the proposed deal would include over $3 billion in government subsidies amid budget cuts. Furthermore, residents feared that rising rents as a result of Amazon’s arrival would drive out longtime residents in the process and an influx of new workers would exacerbate over crowdedness in the subway systems.
“Amazon’s decision to withdraw from New York is no doubt a blow to our local economy,” said Julie Samuels, executive director at Tech: NYC. “New York City is today one of the most dynamic tech hubs in the world, but there is no guarantee we will maintain this status in the future, which makes this news so disappointing.”
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The announcement comes after Amazon executives were heavily questioned regarding the proposal on topics, such as unions, jobs, local neighborhoods, and taxes. To some analysts, the move was seen as critical as New York City could no longer lean on Wall Street to be a major economic hub.
Instead, Amazon’s arrival would help the city use tech as another viable source of economic activity.
“This is a stunning development, with Amazon essentially giving in to vocal critics,” said Mark Hamrick, an analyst at Bankrate.com. “For those who didn’t want Amazon to bring the promised 25,000 new jobs and added economic vitality to the area: Be careful what you wish for.”
Furthermore, other analysts fear that this could prevent future businesses from setting up shop in New York City for fear of similar opposition.
“While polls show that 70 percent of New Yorkers support our plans and investment, 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,” Amazon said.
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