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Amazon Says No Thanks To NYC: What Do The Experts Think?

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Amazon Says No Thanks To NYC: What Do The Experts Think?

E-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) needs to return to the drawing board to decide if and where it will open its second quarters after scrapping plans for a facilities in Long Island City, Queens.

Expert takes after Amazon's Thursday announcement that it's pulling out of the project ranged from delight to pure disappointment over the loss of tens of thousands of potential jobs.

A Wall Street Take: Amazon Is Bluffing

Amazon could be "bluffing," as an office in New York City makes geographic sense and brings many strategic benefits, D.A. Davidson's Tom Forte said in a Thursday note.

The e-commerce company is known to be "incredibly shrewd" in terms of lobbying, and a location close to Washington, D.C. is consistent with this "shrewd behavior," the analyst said. 

It's difficult to imagine Amazon invested "so much time and energy" only to merely give up on the first blowback, Forte said.

"We will continue to monitor the situation as, in our view, the company may not, in fact, be pulling the plug on New York City, despite the article and blog post." 

A Victory For New York

New York City Council Member Jimmy Van Bramer told Bloomberg's Emily Chang Thursday that the city achieved a victory over Amazon.

Residents "fought for our values," as Amazon has a reputation of "not treating its workers right," Van Bramer said.

Amazon decided on its own accord to leave and "no one killed" the company, he said. Amazon refused to change its ways, with particular emphasis on not allowing its workers to form unions.

In response to Van Bramer's comments, Bloomberg's Brad Stone said Amazon was looking to hire for white-collar, high-paying jobs. Some of the jobs will focus on facial recognition technology that will be sold to the federal government, he said. This begs the question, he said: how does this help the tens of thousands of would-be workers who are losing out on an opportunity?

Van Bramer said that Amazon walking away not only helps the city but the entire country, adding that if the fight had not been fought in New York City, then other corporations would look to impose similar anti-union behavior as a precondition for new facilities.

Related Link: Was Amazon's Q4 A Game-Changing Thesis? The Street Debates

Is The NYC Tech Scene Dead?

Julie Samuels, executive director of Tech: NYC, separately told Bloomberg's Chang Thursday that the city suffered a big loss to the tune of tens of thousands of jobs.

This represents a lost opportunity for the New York City tech scene, but the overall tech industry in the region is still in "good shape," Samuels said. 

The region is home to more than 300,000 tech jobs, as technology companies demand access to the following, she said:

  • Diverse talent.
  • Local academic institutions.
  • A strong cultural and arts scene.
  • Public transit.

"These are things that are so uniquely New York," Samuels said. "Companies will continue to come here — I have no doubt."

At the end of the day, the New York City tech sector missed an opportunity to gain tens of thousands of jobs in one shot, she said, adding that it's "disappointing to lose that in one day."

Modern Spaces Founder: Business As Usual For Real Estate

Amazon's proposed location in Long Island City brought international recognition to the neighborhood, and some real estate investors started buying properties in the region, Modern Spaces Founder Eric Benaim told Fox Business News in an interview. Despite Amazon scrapping its plans, the local real estate market will remain "business as usual," as the region was a "hot neighborhood three months ago before Amazon," Benaim said. 

Nevertheless, local elected officials and small business owners in the region are "furious" over the decision, he said.

The people of New York — especially the people living in the nation's largest housing project in Queens — were used as a "sacrificial lamb" and won't have the opportunity to "bring a check home," he said. 

Venture Capitalist: Lessons To Be Learned

Amazon's HQ2 ambitions have proven to be a "terrible idea" since day one, Albert Wenger, a New York-based early stage venture capitalist, said in a blog post. 

The concept of holding a "secret bidding contest" for cities to pitch Amazon is far from a brilliant idea, as it gives the impression that one of the "most valuable companies, run by the world's richest person" is asking cities for "massive concessions," Wenger said. 

New York City is not blame-free in this fiasco, as the message it needed to communicate was that Amazon would bring benefits for everyone, the venture capitalist said — not just those in the tech sector whose salaries are already growing at a faster rate.

The city failed to present a compelling vision of how it can use a portion of the long-term tax revenue gains from Amazon to fix the transportation infrastructure and improve affordable housing, Wenger said. 

"This is all about misunderstanding where we are on the perception of tech companies and their role and responsibility with regard to the polarization of society." 

Related Link: Amazon Cancels New York Headquarters And 25,000 New Jobs After Political Pushback

Photo by Airbornelawyer/Wikimedia. 

Latest Ratings for AMZN

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Sep 2019MaintainsOutperform
Aug 2019AssumesBuy

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