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Amazon Friction Rises in Virginia as Cuomo Woos Bezos to Return

The company is facing calls for hearings on its HQ2 project in Virginia.

(Bloomberg)—In New York, Governor Andrew Cuomo begged Amazon.com Inc. to reconsider its decision to back out of plans to bring 25,000 jobs to Queens after public criticism, while in northern Virginia, the company is facing protests and calls for hearings on a similar project.

Eighteen months after the e-commerce giant launched its search for a second headquarters, the company’s site-selection plans are no less controversial. Boosters see a vast windfall that will create high-paying jobs and spill over into other parts of the local economy, while critics say governments shouldn’t be lavishing subsidies on Amazon, whose presence is likely to drive up housing costs and increase traffic congestion for regular people.

In the latest sign that the argument isn’t close to over, New York civic leaders published an open letter to Amazon Chief Executive Officer Jeff Bezos, promising that Cuomo will personally oversee state approval and a package of tax incentives totaling about $3 billion, and apologizing for the “rough and not very welcoming” debate that prompted the company to withdraw. Cuomo himself didn’t sign the letter, but the New York Times reported that he had made a personal pitch to Bezos in an effort to revive the deal.

The letter, signed by local politicians and executives, appeared in the New York Times just hours after protesters disrupted a networking event in Arlington, Virginia, where hundreds of local real estate professionals had paid $200 each to hear from Holly Sullivan, Amazon’s head of economic development, talk about the company’s plans for an area in Virginia that Amazon has rebranded as National Landing.

“Pay to play is not OK! We want a public hearing today!” the demonstrators chanted, echoing community activists who have called for a public hearing before the county signs a deal to give tax incentives to the e-commerce giant.

"I’m glad to welcome a few of my friends who like to follow me around the country," Amazon’s Sullivan said of the protesters, who were escorted from the event. "It comes with the territory.”

Dubbed Amazon HQ2-Apalooza by host Bisnow Media, Thursday’s event gave the northern Virginia business community a chance to discuss new opportunities to profit from Amazon’s arrival, while the demonstrators complained that the general public had been excluded from the negotiations and decision-making.

“The message is, if you have $200 and you’re a real estate developer, you can meet with Amazon,” said Roshan Abraham, an organizer with Our Revolution Arlington, which is part of a coalition of local groups that opposes the incentive-deal used to attract the e-commerce company to the region. “They have yet to speak to us.”

The company plans to add 25,000 jobs that will help diversify the local economy and generate billions of dollars in tax revenue, an Amazon spokeswoman said in an email. “We are excited to bring our new Amazon headquarters to National Landing and help support the community," she said.

HQ2 Search

Amazon’s rapid growth in Seattle, where it started, has contributed to soaring housing costs, and put stress on transportation and other services. Those concerns didn’t stop more than 200 cities across the country from competing to lure the tech giant when it embarked on a yearlong search for a so-called HQ2 that would bring 50,000 or more high-paying jobs.

Amazon ultimately chose the Long Island City neighborhood of Queens, New York, and northern Virginia, as well as Nashville.

The company dropped its plans for New York after it met with resistance from local lawmakers, who criticized the promised $3 billion in tax incentives and raised concerns about the impact on the already strained public transportation system.

Activists’ success in New York has emboldened opponents across the country. Legislators in Arizona, Illinois and New York have introduced legislation to prevent state government from tailoring incentives to a specific company. Activist groups in Northern Virginia and Nashville have called for greater scrutiny of their area’s bids.

There was already a conversation about "being more responsible about what we do with taxpayer incentives,” said Odessa Kelly, an organizer at Stand Up Nashville, a coalition of local organizations focused on equitable growth. “Amazon is a big catalyst for us to have public awareness around it. Is this how we want to do this, or do we want more accountability?”

That question will remain even after the dust settles in Nashville, New York and Northern Virginia, where even Abraham concedes the chance of derailing Amazon’s plans is a long shot. On Feb. 5, Virginia Gov. Ralph Northam signed a bill granting the lion’s share of the $800 million incentive package used to bring Amazon to the Washington area. The Arlington County government is set to vote on its own contribution, which amounts to $23 million in subsidies tied to local hotel taxes, on March 16.

Two members of the five-person county board recently told a local publication that they didn’t want to vote on the subsidy package until Amazon engaged with the community. One of those members, Erik Gutshall, signaled support for the incentive deal at a public meeting on Feb. 23, saying that Amazon has met “quietly” with community groups.

“Amazon is making significant progress satisfying my desire for meaningful engagement with their new community,” Gutshall said in an email. “They are understandably reluctant to participate in a public forum where they could be subjected to a dysfunctional shouting match with angry opponents who may be more interested in creating a spectacle than actual civil dialogue.”

--With assistance from Henry Goldman.To contact the reporters on this story: Patrick Clark in New York at [email protected]; Carlyann Edwards in Washington at [email protected] To contact the editors responsible for this story: Debarati Roy at [email protected] Rob Urban, Christine Maurus

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