Dive Brief:

• Amazon announced Thursday it would not proceed with locating its second headquarters (HQ2) in New York City after facing significant political opposition.
• The company said it will not reopen its year-long search for another HQ2 location, and would instead “proceed as planned” in Arlington County, VA and Nashville, TN. Arlington Economic Development has not yet responded to a request for comment on how this will impact that HQ2 site.
• “While polls show that 70% 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,” the company wrote.

Dive Insight:

The news marks a major climb-down for Amazon, which had touted HQ2’s impact on Long Island City through a promise of 25,000 new jobs and more investment in infrastructure for the neighborhood. Politicians and local activists had raised concerns at the incentives being offered to the company and the impact the influx of jobs would have on local infrastructure and transportation. The backlash contrasts with Virginia, where the General Assembly easily passed an incentives package for the company as it prepares to move into the Crystal City neighborhood of Arlington County, dubbed “National Landing.” It remains to be seen if the backlash in New York City spreads to Northern Virginia.

New York City’s standing as a technology hub could also take a hit from this latest development. A recent report from real estate brokerage firm Savills put it ahead of the likes of San Francisco and London due to the large amount of venture capital available to invest in technology companies, a large pool of workers both from locally and elsewhere, and the myriad opportunities available. The report also factored in mobility options and the cost of both commercial and residential real estate.

This decision also calls into question the bidding wars that cities engaged in to secure HQ2. Hundreds of cities and jurisdictions put themselves forward as potential locations, leading to a great deal of self-examination as Amazon culled the initial list of bidders down to a shortlist of 20. Late last year, South Bend, IN Mayor Pete Buttgieg — now a candidate in the Democratic primary for president — said cities should worry less about “smoke-stack chasing” and trying to lure big tech campuses, and instead focus more on building up local businesses.

Amazon is facing significant criticism for this move. Richard Florida, a University of Toronto professor and expert on cities and urban development, said the company’s withdrawal from New York City means it has “shown its true colors,” and that it shows “how awful” the HQ2 bidding process was.