Amazon Follows Facebook to Expand in NYC After Earlier Pullout

Alexandria Ocasio-Cortez responds after initial opposition

People stand in the lobby for Amazon offices in New York on Feb. 14, 2019. Mark Lennihan/AP Photo

Tech giant Amazon is expanding in New York after agreeing to take new office space in Manhattan.

The multinational company has signed a new lease for a 335,000 square-foot space on Manhattan’s west side in the new Hudson Yards neighbourhood, The Wall Street Journal reports. The new facilities will employ more than 1,500 people.

The move represents a complete U-turn for the company, which in February announced that it had scrapped plans to open a second headquarters, dubbed “HQ2,” in New York following backlash from local politicians and activists.

A protest message directed at Amazon is spray painted on a wall near a construction site in the Long Island City neighborhood of the Queens borough of New York City, on Jan. 9, 2019. Drew Angerer/Getty Images

At the time, a spokesperson for the company said: “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.”

Among those politicians who challenged the move was democratic socialist Rep. Alexandria Ocasio-Cortez (D-N.Y.) who condemned what she claimed was an offer by New York officials to Amazon of a reported $3 billion in state and city financial incentives to encourage the move to Queens.

Rep. Alexandria Ocasio-Cortez speaks to the media about Amazon scrapping its plans to build a new headquarters in Queens, New York, on Capitol Hill on Feb. 14, 2019. Mark Wilson/Getty Images

Ocasio-Cortez, who represents parts of Queens and the Bronx in congress, had argued that the move would also raise real estate prices to levels that local residents could not afford, forcing many of them to move.

“The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here,” she wrote on Twitter.

However, she was quickly criticised for incorrectly suggesting that New York City was paying Amazon $3 billion for the jobs that the company was creating.

Democratic New York City Mayor Bill de Blasio pointed out that the $3 billion figure was a tax incentive that the city would provide only after Amazon had built its headquarters and created the 25,000 jobs.

“And that $3 billion that would go back in tax incentives was only after we were getting the jobs and getting the revenue,” New York City Mayor Bill de Blasio said, “There’s no money.”

He and other leaders noted that the move had numerous benefits in addition to job creation, including potentially $4 billion in wages and $12 billion in economic activity.

On Friday after learning that the company would now be purchasing office space in the city, Ocasio-Cortez took to Twitter to say that she expected an apology for being “proven right on Amazon” and having “saved the public billions”—revealing that she still didn’t understand the nature of the tax incentive agreement.

“Won’t you look at that: Amazon is coming to NYC anyway - *without* requiring the public to finance shady deals, helipad hand-outs for Jeff Bezos, and corporate giveaways. Maybe the Trump admin should focus more on cutting public assistance to billionaires instead of poor families,” she wrote.

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The move by Amazon comes shortly after social networking giant, Facebook, also expanded its presence in New York.

In November, the company announced it has signed a lease for more than 1.5 million square feet of space across three buildings in a development at Hudson Yards—one of the biggest-ever real estate transactions for the tech firm.

“When considering the next phase of our growth in the city, it was important that our newest office space was situated in the heart of a vibrant community that offered access to arts, culture, media and commerce,” John Tenanes, Facebook’s vice president of global facilities and real estate, said in a via CNBC.

“Hudson Yards offered this and more, and we’re excited to expand our offices there starting in 2020,” he added.