{"id":8687,"date":"2019-04-16T14:38:32","date_gmt":"2019-04-16T18:38:32","guid":{"rendered":"https:\/\/blog.brainstation.io\/?p=8687"},"modified":"2020-05-07T13:03:12","modified_gmt":"2020-05-07T17:03:12","slug":"amazon-in-new-york-why-the-break-up-is-for-the-best","status":"publish","type":"post","link":"https:\/\/brainstation.io\/blog\/amazon-in-new-york-why-the-break-up-is-for-the-best","title":{"rendered":"Amazon in New York: Why the Break-up Is for the Best"},"content":{"rendered":"

It\u2019s been two months since Amazon pulled out of its plan to develop part of their HQ2 in Long Island City, and despite attempts to get the company to reconsider, it looks like the deal is officially dead. <\/span><\/p>\n

Depending on who you talk to, this is either a huge win for community engagement and future city building or a massive political failure that will have economic repercussions for decades to come. There are, however, a few things we can all agree on. <\/span><\/p>\n

Here is what we learned from Amazon canceling HQ2 in New York, and why it might be for the best. <\/span><\/p>\n

The City’s Tech Sector is Still Growing (and Fast)<\/b><\/h2>\n

\"New<\/p>\n

If this proves anything, it\u2019s that New York continues to be a big draw. Amazon even felt the need to profess their love when announcing the pull-out, noting the city\u2019s \u201cincomparable dynamism, people, and culture.\u201d<\/span><\/p>\n

We recently wrote about how <\/span>New York was poised to surpass Silicon Valley<\/a><\/span> and highlighted this dynamism, as well as the city\u2019s diverse industries and workforce. As an example, we quoted Shan-Lyn Ma, the Founder and CEO of Zola, who put it this way: \u201cIf you\u2019re in fashion, if you\u2019re in the financial services […] or any industry that happens to thrive in New York, then you want to be here, because it\u2019s a 10-minute ride to anyone you would ever want to meet, and you could set up a meeting that morning and meet them that afternoon.\u201d<\/span><\/p>\n

This sense of being in the center of it <\/span>all<\/span><\/i> is why so many tech giants have already expanded into New York in the last ten years. Google, Facebook, Uber, and Twitter, for example, all have offices in the city, and despite Amazon backing out of Long Island City, the company still has leases for <\/span>more than 400,000 square feet<\/span> of office space. <\/span><\/p>\n

New York\u2019s tech industry is now the third-largest component of its economy. It is also the fastest-growing \u2013 the city added <\/span>more than 76,000 technology jobs<\/span> over the last decade. In all, there are now more than 7,500 New York-based tech companies, which employ more than 120,000 people, an increase of 60 percent in 10 years.<\/span><\/p>\n

The growth of the industry, though, may have been part of what doomed the Amazon deal. 238 cities threw their hat in the ring for the company\u2019s HQ2, and the majority would have done just about anything to get the nod, regardless of what Amazon demanded. <\/span><\/p>\n

But as the numbers above make clear, New York is not like everywhere else. Ultimately, this is why opponents of the deal were so determined to fight it; New York\u2019s economy would have benefited from having Amazon, but it\u2019s already proving that it doesn\u2019t need Amazon.  <\/span><\/p>\n

The World of Work Is Changing<\/b><\/h2>\n

According to estimates, Amazon would have created anywhere from 25,000 to 40,000 new jobs over the next decade. If New Yorkers didn\u2019t roll out a massive red carpet, it\u2019s because the world of work is changing quickly, and it\u2019s making many people nervous. <\/span><\/p>\n

According to <\/span>BrainStation\u2019s 2019 Digital Skills Survey<\/span><\/a>, 74 percent of organizations are actively involved in digital transformation, and 89 percent claim there are elements of their products and services that did not exist five years earlier. However, nearly half of employees fear change when digital transformation initiatives are introduced, and almost 60 percent are concerned about job security. Considering the change proposed to the city\u2019s workforce and neighborhoods, it\u2019s easy to understand the less-than-enthusiastic response afforded Amazon. <\/span><\/p>\n

As Eduardo Porter wrote in the New York Times, \u201cthere is a small island of highly educated professionals making good wages at corporations like Intel or Boeing…that island sits in the middle of a sea of less-educated workers who are stuck at businesses like hotels, restaurants and nursing homes.\u201d <\/span><\/p>\n

\"Bill

New York City Mayor Bill de Blasio<\/p><\/div>\n

To use his example, a restaurant worker might not feel very confident about landing one of those specialized positions at Amazon. They might, however, worry about the company\u2019s impact on their neighborhood and the cost of living, especially when it was revealed that Amazon, one of the richest companies in the world, would receive a $3 billion incentive package.<\/span><\/p>\n

Mayor Bill de Blasio tried to defend the incentives, saying the deal had an \u201castounding return on investment,\u201d which would create \u201can unprecedented number of jobs\u201d and turn New York into a five-borough city that did not have to rely on Manhattan. That might have been true, but it was still hard for some to accept, given how tight-fisted the city has been when it comes to funding things like education, affordable housing, and upgrades to the aging subway system \u2013 issues that were only magnified by the news that Amazon executives planned on using a helipad as a transportation hub. <\/span><\/p>\n

To address these concerns, the company sent a flyer to Queens residents in the new year, touting \u201c<\/span>career training for local residents<\/span><\/a>,\u201d which included \u201ctechnology and relevant training that will help New Yorkers be better equipped for Amazon and other potential employment opportunities.\u201d <\/span><\/p>\n

There is a good reason they included this: Around the world, organizations are <\/span>reskilling employees to prepare for the future<\/span><\/a> and to address the anxiety caused by the changing world of work. <\/span><\/p>\n

Amazon evidently understood the importance of skills training for the future but waited too long to address it. Had retraining been a part of the conversation earlier, it may very well have limited some of the opposition to the deal. <\/span><\/p>\n

This Could Have Been Handled Better<\/b><\/h2>\n

It\u2019s hard to shake the feeling that this was a poorly managed process. Michael Gianaris, a State Senator who represents Long Island City, said, Amazon \u201cacted like a petulant child\u201d who picked up and left when \u201ca community that was going to be profoundly affected by their presence started asking questions.\u201d<\/span><\/p>\n

In an <\/span>op-ed column<\/span><\/a>, de Blasio echoed the sentiment. <\/span><\/p>\n

\u201cPut simply: If you don\u2019t like a small but vocal group of New Yorkers questioning your company\u2019s intentions or integrity, prove them wrong. Instead, Amazon proved them right. Just two hours after a meeting with residents and community leaders to move the project forward, the company abruptly canceled it all,\u201d he wrote. <\/span><\/p>\n

It’s worth remembering, however, that de Blasio was part of the team that had hammered out the deal in secret, without input from State Senators or city council. The deal even went through a General Project Plan (GPP), instead of the usual Uniform Land Use Review Procedure (ULURP), which needs to be voted on by New York City Council.<\/span><\/p>\n

In its statement, the company did not address this lack of community involvement, and instead put the blame on \u201ca number of state and local politicians,\u201d who they said, \u201chave made it clear that they oppose our presence.\u201d Many took that as a shot at the deal\u2019s most vocal opponents, including Alexandra Ocasio-Cortez, who was quick to celebrate the canceled development.  <\/span><\/p>\n

\u201cToday was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon\u2019s corporate greed, its worker exploitation, and the power of the richest man in the world,\u201d she tweeted. She would later defend her stance by picking apart the incentive package, which included a $505 million capital grant and $897 million from the city\u2019s Relocation and Employment Assistance Program.<\/span><\/p>\n

\u201cIt was written into the deal that we were going to build a helipad for Amazon. We were actually putting hard capital into helping them build their campus while we\u2019re constantly told that there isn\u2019t enough hard capital to heat the rooms in NYCHA,\u201d she said. <\/span><\/p>\n

Congresswoman Ocasio-Cortez, and many of the deal\u2019s critics, had argued that these kinds of investments should be made in infrastructure, education, and training programs, which would diversify the city\u2019s economy and boost entrepreneurialism. Already, the city\u2019s startup ecosystem is valued a $71 billion, the third most valuable in the world, and it\u2019s growing.  <\/span><\/p>\n

New York betting on itself may not be as sexy as a brand new tech campus in an underdeveloped part of the city, but given the changing world of work, and the tensions it is creating, it may be what\u2019s needed. <\/span><\/p>\n

And really, if you needed a group of people to bet on, who better than New Yorkers? As de Blasio tweeted when the deal fell through, “You have to be tough to make it in New York City.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Two months on, there are a few things we know for sure about the Amazon-NYC affair. <\/p>\n","protected":false},"author":7,"featured_media":8692,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[692,336],"tags":[452,242,693],"yoast_head":"\nAmazon in New York: Why the Break-up Is for the Best | BrainStation\u00ae Blog<\/title>\n<meta name=\"description\" content=\"It\u2019s been two months since Amazon pulled out of its plan to develop part of their HQ2 in Long Island City, and now that the dust has settled, there are a few things we can be sure of. 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