New York City Development Chief Faults Amazon for Scuttled HQ2 Deal
February 21 2019 - 5:22PM
Dow Jones News
By Katie Honan
A top New York City official who helped draft the deal to build
an Amazon.com Inc. campus in Queens blamed the company for the
project's collapse, saying it did a poor job connecting with
residents and communicating the economic benefits to the state.
James Patchett, president of the New York City Economic
Development Corporation, said Thursday at a Crain's New York
Business event that the tech giant wasn't ready for critics.
"The company was not prepared for what happened in New York
City," said Mr. Patchett, one of the deal's chief architects. The
speech marked his first public comments since Amazon pulled the
plug on plans for a so-called HQ2 site on Feb. 14.
Under terms of the deal, announced in November, Amazon would
have invested $2.5 billion on the new site in the Long Island City
section of Queens and brought 25,000 jobs to the area over the next
decade. In exchange for the investment, city and state officials
promised the company $3 billion in tax incentives. The project was
expected to generate $27 billion in government revenue over 25
years, according to state officials.
While recent polls showed a majority of New Yorkers supported
the plan, Amazon faced opposition from some politicians,
progressive groups and unions who lambasted the incentives as
corporate welfare. Company executives and Mr. Patchett were grilled
for hours at two New York City Council hearings about the
incentives and Amazon's anti-union stance.
In a statement on its decision to abandon the deal, Amazon
blamed politicians who were unwilling to work with the company to
move the project forward.
"They didn't perform particularly well at their public
hearings," Mr. Patchett said Thursday. "They never hired a single
New Yorker to work for them to talk to New Yorkers. They never
really connected with people in the city."
Mr. Patchett's assessment mirrored Mayor Bill de Blasio's
postmortem of why the deal flatlined. In interviews in the past
week, Mr. de Blasio said the company failed to engage New
Yorkers.
"We'd all love to have a time machine and go back and figure out
how to make this work, but the fact is I actually think city
government, state government, agreed to a fair deal," Mayor de
Blasio said Thursday. "We were pushing Amazon to do more for the
community, which is our job, and they just walked away."
A spokeswoman for Amazon on Thursday said the company did
extensive outreach across the city, meeting with every city council
member who represents Queens, representatives from the City
University of New York and State University of New York, and local
businesses and residents.
Company representatives also held discussions with members of
public-housing tenant associations and met with a community
advisory panel, including local leaders who asked to provide input
on the project, the spokeswoman said.
Officials from the Economic Development Corp. and City Hall
spent months negotiating with Amazon, mostly behind closed doors,
before the deal was announced in November. Mr. Patchett said after
the deal rolled out, Amazon miscalculated its messaging around
it.
Mr. Patchett also said many people misunderstood the $3 billion
in tax incentives, believing that the money would now be available
for other needs. The incentives included $1.2 billion in state tax
credits tied to job creation. The state also promised more than
$500 million in a capital grant for the Long Island City site.
"Anyone familiar with the facts knows there was no $3 billion,"
he said. "I think it was the dialogue that poisoned it and the
company's reaction to that."
Since Amazon announced its exit, Mr. Patchett said he hasn't
heard of any other companies changing their minds about coming to
New York.
And he said he doesn't regret that the city pursued Amazon, even
after the deal was dead. "I remain incredibly proud of the work we
all did together," he said.
Write to Katie Honan at Katie.Honan@wsj.com
(END) Dow Jones Newswires
February 21, 2019 17:07 ET (22:07 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Apr 2024 to May 2024
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From May 2023 to May 2024