(This story has been updated.)
For many in New York, it’s a case of “no love lost.” But for business schools with campuses in the city, Amazon’s announcement Thursday (February 14) that it is withdrawing plans to locate half its new headquarters there — taking with it 25,000 jobs and proximity to one of the world’s top employers of MBAs — is akin to a Valentine’s Day massacre.
Amazon’s “HQ2” plan, announced in November after a year-long search, faced strong opposition among many in New York from the start. Among the main objections: the massive subsidies that New York offered to lure the tech giant, which included $1.525 billion in incentives from the state of New York alone. Opposition ranged from local activists to high-profile politicos like Democratic congresswoman Alexandria Ocasio-Cortez, whose district abuts the proposed Long Island location of the site.
“After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens,” Jodi Seth, an Amazon spokesperson, said in a statement.
ONE GROUP WELCOMED AMAZON TO NYC: B-SCHOOLS
Business schools in New York were not among those opposing Amazon’s move — quite the opposite.
“There’s an enormous opportunity to continue the growth of the technology sector in New York City that has been booming so much the last five years, to the extent that New York is seen as the only real competitor to Silicon Valley in the U.S. at this point in time in terms of scale, size, and growth rate,” J.P. Eggers, vice dean of MBA and graduate programs and an associate professor of management and organizations at NYU Stern School of Business, told P&Q late last year. “It’s a great place to be, given that that’s not really where we were at all 10 to 15 years ago.”
David Capaldi, director of the Career Management Center at Cornell University’s Johnson Graduate School of Management, told P&Q in December that he expected Amazon’s arrival in New York City to be a boon to the school’s MBA grads who are interested in going into tech but not enticed by the prospect of relocating to the West Coast.
To what degree Amazon would boost the school’s MBAs, Capaldi was less certain.
“You see that a lot of our students like to stay in the Northeast, so having a major tech employer headquartered in D.C. and New York City, we’ll see some interest from people who didn’t want to go to the West Coast to that company,” he said. “It should help but I don’t know if it’s going to be a huge jump. I guess we’ll see.”
INFRASTRUCTURE CONCERNS AIRED FROM THE START
In speaking with P&Q last year, Eggers acknowledged the widely aired concerns about housing prices and the expected strain on infrastructure. “These are all legitimate concerns,” he said, “that any growing and fast-paced city has been dealing with for a long time, and I hope the government is able to figure out potential solutions to help mitigate the problems that are certainly going to occur.” But, he added, that is all part of the “process of forward-moving development for a city.”
“This is the kind of thing that New York City has done on an ongoing basis — whether it’s been different periods of time or there’s been enormously fast growth rates, the city has been able to find ways to manage the adjustment,” Eggers said. “In terms of access to talent, in terms of access to airports and transportation options, quality of living for your employees, you’d be hard-pressed to think of a better place to come than this. There are always problems that are going to occur anywhere where you see this kind of growth, but one of the nice things that is true both for New York and Washington, D.C. is the fact that the infrastructure drain will be a little offset by the fact that we are both places that are relatively heavily public transportation-run. Just imagine in cities where everyone drives, this kind of rapid growth could really cripple infrastructure. This is an opportunity to justify continued reinvestment in the infrastructure to help support the growth that Amazon is going to need in New York City.”
Contacted by P&Q after Amazon’s announcement that it was abandoning plans to locate in New York, Eggers said, “When Amazon was just on the West Coast, the company was NYU Stern’s top employer two years in a row. While we may be disappointed not to have them right in our backyard, we will continue to nurture this very strong relationship regardless of their geographic location.”
Cornell Johnson, not NYU Stern, was the school that perhaps stood the most to gain from Amazon landing on Long Island. Cornell opened a tech campus on Roosevelt Island, across the East River from the proposed HQ2 site, in the fall of 2017; in December of last year the school reported a 50% jump in tech employment for its MBA grads.
Cornell officials declined to comment for this story.