Take your 25,000 jobs and $5-billion investment, Jeff Bezos, and stay in Seattle, where you belong! You’re a labor exploiter, a competition-stifler! You’re killing independent businesses!
These are the slogans noisily proclaimed by progressive activists. Enough hysteria.
The denunciations are not necessarily meritless. Preventing Seattle-based Amazon from opening its so-called second headquarters in New York City won’t address these nor other alleged sins of the online-shopping giant. A more strategic approach, and one likely to be successful, is to take the causes to the venues that can actually make change (Congress, anti-trust officials, etc.), and get the most out of the move instead.
No doubt city and state officials are now mortified at offering some $3 billion in incentives—especially Governor Cuomo, whose groveling before the Internet-shopping giant was particularly cringe-inducing. Progressives correctly called out the giveaway. Taxpayers have already ponied up to finance the Bloomberg plan to build tech capacity in the city, including Cornell Tech, the city’s splashy icon of tech leadership that is a stone’s throw from the site Amazon selected in Long Island City. That’s plenty.
Amazon validated New York’s tech-development strategy by declaring that the city’s chief attraction lay in the ample talent it offers. Worse for the politicians, The New York Times and others were quick to point out that substantial expansion by Google, Apple and others came without demands for subsidies and tax incentives.
While negotiating to reduce the incentives New York should point out the many ways Amazon and the city could work together to mutual benefit.
“Social” tech in the city that won’t shut up
New York City’s workforce is valuable to Amazon because it is both huge and diverse. Native talent is augmented by children of immigrants who are ambitious and entrepreneurial but are readily stymied by the high cost of education. Even the city’s relatively affordable CUNY and SUNY system remain out of financial reach for too many. Amazon could help with that. (Right now, the agreement with the city and state requires Amazon to pony up pocket change—$5 million—for workforce development, to be matched by the city and state. It also must set aside about 378,000 square feet in the development for a variety of incubators, workforce development, and artists, not all of which need be on-site. It’s unclear the degree of subsidy needed and who will pay, but it’s a great means by which Amazon could invigorate its own and the city’s workforce. )
Tech played a small role in New York until the rise of social media. Unlike the isolated, introverted office parks of Silicon Valley and the engineering-geek culture that predominates in Seattle, New York is “social” by any definition. It is valuable to Amazon in spite of its costs and complications because it hosts interaction in every conceivable form, from street-corner schmoozing and dog-park dealmaking to conferences and conclaves of just about any conceivable description from the hyper-local (Brownsville activists) to the hyper-global (the UN).
A celebrity can build gardens in needy neighborhoods (Bette Midler) and a child growing up in South Bronx public housing can ascend to the Supreme Court (Sonia Sotomayor).
Amazon’s campus: Fortress or friendly?
Amazon could be encouraged to be a good neighbor by creating an exemplary development on its extraordinary site in Long Island City. Its buildings in Seattle are not isolated in suburban office parks like most tech companies, but are part of the downtown cityscape, mixed in with residential development and cheek-by-jowl with biotech companies, a university research center, and global-health nonprofits.
This is a recipe for a vital urban cauldron bubbling with ideas, but Amazon’s headquarters buildings in Seattle are relentlessly ordinary and hermetic, having nothing good to say about the company or the unique setting in the South Lake Union neighborhood.
In Long Island City Amazon has a spectacular waterfront site, adjacent to two of the best-designed parks in America (Gantry State Park and Hunters Point South Park—the work of Thomas Balsley, landscape architect (both), and Weiss/Manfredi, architect, who are among New York’s sterling talents). Stunning views of Manhattan open from what today are crumbling piers. Long Island City’s brand-new tower skyline rises as a glassy Ozlike presence to the east.
Amazon needs to make the most of these endowments which means hiring architects and landscape architects with a great deal more talent and insight than it has used in Seattle. Accommodating Amazon will require very high density with multiple towers, some of which could be quite bulky to get the floor sizes desirable for office use.
The city and state agreements commit Amazon to develop significant public access to the waterfront and about four acres of total public space. It must link these to esplanades that were built by high-rise developers along the Brooklyn and Queens East River waterfronts.
Access to the river is among the best-loved and most remarkable spinoffs of the city’s enormous recent growth. Parkless neighborhoods of endless gridded asphalted blocks were cut off from the river for generations by industry. Now residents discover that they live in a water city, with panoramas of sky and skyline, chattering seagulls, cormorants flapping atop the water surface, the evocative smell of the ocean, and water edges that can be touched and boated upon. Amazon should set a new standard for design quality and public welcome.
Resisting the retail apocalypse
Amazon has learned much from the impressive retailers that have grown up in Seattle. Its “grow big fast” ethos owes something to Microsoft; its obsessive focus on customer service comes from Nordstrom; its pricing strategy (including Prime) learns from Costco’s membership model, and its (belated) improvement in the lot of its low-wage workers owes a debt to practices pioneered by both Costco and Starbucks.
Amazon no doubt will benefit from New York City’s deep resources in creative services, advertising, media, and retail. New York has much to teach Amazon about selling real stuff in real stores to real people passing by. Among its first forays into physical stores, Amazon’s 4-Star store in SoHo looks like a popup where everything fell off a truck, no better than the Amazon Fresh pickup sites the company has rolled out in Seattle.
Amazon is blamed for unleashing a “retail apocalypse” as “for lease” signs multiply along New York’s great shopping streets. The worst depredations (or to be kinder, “right sizing”) affect streets overwhelmed by chains.
Good riddance. As late as the 1990s, you could barely find a chain store in New York. Now you cannot escape them. In Manhattan alone, mall stores dominate Fifth Avenue, Times Square, Herald Square, Union Square, Ladies Mile, SoHo, Battery Park City, the Upper East Side, the Upper West Side . . . . They obliterated local stores then steadily contracted in service and selection—aided by Amazon, it must be said. The “apocalypse” is likely to be overblown; lower commercial rents may solve much of the problem.
Amazon may be on a quest for world retail domination, but keeping the retail giant’s offices out of New York will do nothing to address its monopolizing tendencies. New Yorkers may compete better if they come to know the enemy more intimately. Amazon arrives in the midst of a pitched battle by stores against both homogenizing online shopping and homogenizing chains. It’s a battle that is Amazon’s to lose. Publishers and bookstores—the company’s first target—appear to be making a halting comeback. Hegemony may be done-in by increasingly savvy stores learning to compete both online and off, and the fact that Amazon may someday conclude that it can’t make money delivering one-click diapers.
NYC’s Amazon ask
New Yorkers should not forget that it is in Amazon’s interest to be thought a good corporate citizen. Though Jeff Bezos, the company’s founder, is a cutthroat competitor and a bully at times, he believes himself to be a missionary and that his “everything store” makes the world a better place. His position may be deemed delusional, as are the do-gooder proclamations of once-admired tech companies now hoisted on their own petards by privacy violations, security breaches, and relentless exploitation of personal data.
New York could learn a few things by looking at the wide ranging qualities that Amazon sought in its competition brief: many deal with quality of life. Amazon defined its quest for a good place to do business broadly. What little leaked out about the bids during the competition process suggested that the company took the criteria seriously, since many cities found themselves wanting—especially in transit access, quality of local universities, recreational and cultural amenities, and the nurturing of a diverse local workforce—all elements of well-being and economic health that many states and localities have chopped—in the interests of luring businesses interested only in lowering costs to themselves.
The company chose cities that check most of its boxes. Amazon itself did not name incentives as the chief criterion. In the media tizzy around competition process pundits were nearly unanimous in their presumption that incentives would rule Amazon’s decision—and still are not looking at evidence to the contrary.
Amazon has shown it was well acquainted with what it takes to truly create a healthy urban economy—and if it wasn’t, it is now. It can be expected to help shore up the city’s diverse advantages. After all, Bezos, a New Yorker before he founded Amazon, chose Seattle in no small part because it had nurtured—not purchased from elsewhere using incentives—among the world’s most influential companies, from Boeing to Nordstrom, from Costco to Starbucks, and from Microsoft to global health.
New York should not have sold out to Amazon, but it could get a lot more savvy in the development of potentially transformative investments.