Less than a week ago, New York City’s real-estate brokers assuredly brushed aside reports that Amazon would scrap its plans to open an “HQ2” in Long Island City, reasoning that cancelling its move to NYC would be bad for both the e-commerce giant (it would lose access to top tier talent and a lucrative incentives package) and for the city itself (think of all those good middle-class jobs!) Some brokers dismissed the report as a semi-serious “trial balloon” intended to send an unequivocal message to Governor Cuomo.
Fast forward five days, and Amazon has officially scrapped its move to the borough, potentially leaving dozens of brokers, buyers and sellers in the lurch. And already, as Bloomberg determined during another canvass of some of the area’s largest brokers that the game of finger pointing has already begun, with most brokers blaming New York’s progressive politicians who opposed the deal for squandering what could have been a tremendous opportunity for the people of Queens, not to mention the broader region.
As the CEO of one brokerage put it, “I think those local politicians, their careers are over.”
Amazon.com Inc.’s decision to drop its expansion plans in the Long Island City neighborhood of Queens plunged local real estate brokers into despair – just months after the euphoria that followed the company’s announcement that it would open offices there and bring thousands of jobs. But not just despair. Also anger.
“I think those local politicians, their careers are over,” said Eric Benaim, chief executive officer of Modern Spaces, a Long Island City brokerage, who distributed pins and posters supporting the Amazon deal. “They’re responsible for losing 25,000 jobs.”
In a symbolic gesture that basically sums up the local business community’s reaction to the news, one broker described how one of their employees pulled down a sign proclaiming “this business supports Amazon” after the company released its statement. One broker said he felt bad for all the local businesses who had been counting on Amazon.
The sign displayed in the storefront of a Douglas Elliman brokerage in Long Island City summed up the real estate industry’s attitude toward the controversial deal. “This business supports Amazon,” it read. Someone inside pulled the sign down after the company released a statement Thursday that it was pulling out.
“I was sitting down, so I had nowhere to fall,” said Adrian Lupo, manager of Nest Seekers International next door on Vernon Boulevard. “We thought they were playing poker to get more concessions, but in the end it was not the case.”
Without the boost from Amazon that could have transformed Long Island City into a 24/7 district, Benaim said he thinks it’ll remain just a place for Manhattan commuters to sleep.
“It’s still going to be a bedroom community, and I feel bad for all the local restaurants, all the local mom-and-pop shops who were counting on this,” he said. “They needed this.”
A vice president at another realtor argued that the fallout from Amazon’s decision will continue to reverberate throughout the city for years to come, as companies ascertain that the city isn’t a business friendly environment, and the political risks associated with moving there are simply to great to stomach.
Another said clients have been calling him non-stop since the decision was announced, and that he’s worried that several deals he recently finished negotiating would fall through. Meanwhile, many doubt that AOC and her cronies will manage to produce any economic growth to speak of – and certainly not enough to offset the loss of Amazon.
Amazon’s withdrawal “sends a terrible signal to the marketplace about the ability for companies to expand in New York,” said Seth Pinsky, an executive vice president at RXR Realty. “The people who are younger and don’t remember the fact that New York was not always thriving, I think don’t understand that as bad as the problems of growth are, the problems of decline are even worse.”
Jason Haber, a broker with Warburg Realty Partnership Ltd., said at least 10 clients have already called to discuss what Amazon’s absence from Long Island City means for them. He said he hopes none of them back out of deals over the news, but “real estate is an emotional thing.”
“We literally just threw the baby out with the bath water, Haber said. “You want the Rockefellers, the Carnegies, the Bezos coming to our shores and that economic growth that comes with them. We’re not setting up New York for success in the 21st Century. What happened today is a real tragedy.”
Another broker said he was riding the subway when he read the news. He then turned to his partner and the two men breathed a sigh of relief that they didn’t have any deals being negotiated in Long Island City.
Chad Sinsheimer, a managing director at Ackman-Ziff Real Estate Group, who was on the subway when he heard the news.
“This definitely sets back the commercial market for Long Island City for sure,” Sinsheimer said. “My partner and I looked at each other and we said, ‘Boy are we glad we don’t have anything that’s being negotiated in Long Island City right now because it’s got to be chaos.'”
As one academic explained, Amazon’s decision to pull out of NYC at the first sign of serious resistance was probably due to the fact that most big tech companies are used to operating in smaller cities or suburban towns in the Bay Area that are more willing to do their bidding. When Seattle adopted a new corporate tax on Amazon, the company simply flexed its political muscles, threatened to abandon its projects in the city – or perhaps even more its headquarters – and the city backed down.
That’s not how things work in New York City. Especially not now that a certain former bartender is representing New York’s 14th Congressional district.