Less than a year after it pulled out of plans to open a new headquarters in New York City due to the local backlash over $3 billion in tax incentives, Amazon has signed a new lease in Manhattan ー without any subsidies from the city or state.
The company confirmed late Friday that it will move 1,500 employees into 350,000 square feet of space in a new building in the Hudson Yards development on the far west side of Manhattan. While significant, it’s a fraction of the 25,000 jobs Amazon had said it would bring to its ‘HQ2’ in Queens over 10 years across a proposed eight million square feet of space.
New York State Sen. Michael Gianaris, who helped lead the campaign against Amazon's original HQ2, told Cheddar in an interview Monday that the announcement shows that "they were always coming to New York."
"They always knew they were coming here," he said. "The only thing that's happened now is that they're not getting $3 billion in subsidies and incentives to do it."
Those subsidies were tied to Amazon's agreement to bring 25,000 jobs over a decade to the Long Island City neighborhood on the Queens waterfront. The Hudson Yards lease is for a fraction of that headcount and space. Gianaris said that he took with a grain of salt Amazon's 25,000 job pledge, which was not binding, and noted that the company would have had just 700 positions in its LIC campus after the first year. Amazon already had at least 5,000 employees in the five boroughs, including at a new fulfillment center in Staten Island, even before Friday's announcement.
"I bet you we'll have close to [25,000] if not more Amazon employees in New York anyway" over the next decade, Gianaris said.
The Democrat from New York's 12th District, which spans a wide swath of Queens, said his beef was not with Amazon or any other company that wants to build out its footprint in the Big Apple, but rather with the idea of handing out sweeteners to companies that are already among the wealthiest in the world. "We want jobs," he said. "We just don't need to be subsidizing it."
He said that if the HQ2 discussions had included provisions for Amazon to take on the cost of mass transit improvements or affordable housing development, he might have felt differently, acknowledging that the companies that move to Hudson Yards are also getting some subsidies that were granted to the developer of that huge complex ー though, importantly, that developer also shouldered some of the cost of infrastructure investments that benefit the public, such as expanding the subway.
"We shouldn't be throwing our dollars at incredibly profitable companies to make them even more profitable," Gianaris said. "That exacerbates income inequality."
Amazon's announcement that it would take space in Hudson Yards came the same day that the Wall Street Journal reported Facebook was also in discussions to lease more than 700,000 square feet of space in the nearby Farley Post Office building, across the street from Madison Square Garden. Meanwhile, Google has quietly been expanding its presence in the city, buying up the Chelsea Market and an adjacent building, as well as starting work on an entirely separate campus further south on the West Side.
And it's not just big tech. Last week, Bloomberg reported on the wave of fintech startups that are moving staff to Manhattan, realizing that they need to be physically closer to the financial giants they seek to disrupt and the talent they seek to poach.
The eastward drift of Silicon Valley is happening as San Francisco becomes less hospitable to the industry that has called it home, with voters in that city last year passing a ballot measure to tax large businesses in order to help alleviate the homelessness crisis and infamously byzantine density laws that make new development difficult.