The Amazon smile turns to afrown./ (Design parody by Steve Lubetkin.)

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NEW YORK CITY—It's hard to listen to people with whom youdisagree. And especially difficult when you reallydisagree. Add to the mix how New Yorkers are known for their strongopinions and the wealthiest man on Earth.

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Amazon withdrew its plans to bring its second headquarters toLong Island City, Queens, citing opposition from some politicalleaders. Several members of the CRE community expresseddisappointment, calling the news an “awful” or “sad” missedopportunity. They cited the loss of jobs, tax revenue and economicstimulus. Other politicians and civic leaders opined that Amazonhad not shown itself to be a strong corporate partner. The HQ2became a divisive issue, and one lesson learned was the importanceof bringing different people to the table—especially those withwhom you may not normally break bread.

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Below are highlights of different perspectives on Amazon'sdecision:

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Voices from the CRE Industry

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Andrew Barrocas is the CEO of MNS Real Estate. His firm has morethan 3,000 residential units with approximately 30 projects in theQueens market. He was in talks regarding a more than one millionsquare-foot residential building, leasing possibly an entire towerto Amazon. Now that deal is no longer happening. “People madecommitments based on the news. People were negotiating contracts,planning buildings, in contract. When the news broke, they jumpedon it quickly to solidify deals,” Barrocas told GlobeSt.com.

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But it's not just about his deals. Barrocas commented it's alsonot just about the 25,000 jobs Amazon had promised to bring to LongIsland City. “It's really a shame for the 10,000 constructionworkers that would have been building this for the next 15 to 20years. It's the man or woman working in the new restaurant thatwould have opened that is not there.”

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He stated no new Amazon employees had yet moved to New York sothere was not a spike in rentals, although that would havehappened. He pointed to a direct correlation between employmentrates and the rental market. But he said LIC condominium purchasesincreased as people felt the news bode well for a long-terminvestment.

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If Amazon had proceeded with the HQ2, it would have been like ashot in the arm, accelerating the pace of LIC's growth, saidBarrocas. He added now it may take a little longer but he'sconfident the neighborhood will get there.

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Robert Whalen, Halstead's director of sales in Long Island City,called the news “an unfortunate occurrence.” Yet he pointed outthat the e-commerce giant's reasons for selecting LIC remaininherent to its location. With ample parks, the waterfront, shortsubway rides into Manhattan, a Long Island Rail Road station, andLaGuardia Airport 10 minutes away, the neighborhood offersconvenience, connectivity and a high quality of life. “That reallydoesn't change,” he said. “Amazon's November announcement shined avery bright light on Long Island City. Probably more people knowabout Long Island City than ever before. That's a good thing.”

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Jason Pennington, managing partner at RIPCO Real Estates, toldGlobeSt.com that Amazon's decision would not have a massive impacton LIC's retail environment compared to its current state. Hepointed out that Tishman Speyer's JACX building is fully leased with Macy's andNewYork-Presbyterian. “Initially asking rents will stutter but theimpact to retail of the Amazon campus beyond the Citigroup Buildingwould have been years out,” said Pennington.

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Eric Anton, an associate broker at Marcus & Millichap, whohas sold many properties in LIC said, “Clearly this is a majorsetback for the Long Island City waterfront, principally forhigh-end office and residential properties.” He pointed out the onemillion square-foot office space of One Court Square which theowner Savanna intended to lease to Amazon. Citigroup's lease endsin 2020. He predicted the Amazon news will depress the residentialmultifamily and condominium market in the neighborhood. “I wouldexpect to see a dip in pricing and an increase in concessions bylandlords and owners,” he said.

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Political Leaders Respond

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Similar to how the real estate industry has interests and peoplewhom they represent, politicians also have constituents whosevoices they try to make heard. Some political leaders expressedconcerns about the $3 billion in state and city tax incentives.

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Governor Andrew Cuomo, who was a strong proponent in the city'sbid for the HQ2 continued to tout New York as the capital of theworld and best place to do business. He stated Amazon would havebrought 25,000 to 40,000 good paying jobs to the state and nearly$30 billion dollars in new revenue to fund transit, housing,schools and other quality of life measures.

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He sharply criticized the opponents of the HQ2, “[A] small groupof politicians put their own narrow political interests above theircommunity… the state's economic future and best interests of thepeople of this state. The New York State Senate has done tremendousdamage. They should be held accountable for this lostopportunity.”

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Mayor Bill de Blasio's statement focused on Amazon.

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“You have to be tough to make it in New York City. We gaveAmazon the opportunity to be a good neighbor and do business in thegreatest city in the world. Instead of working with the community,Amazon threw away that opportunity. We have the best talent in theworld and every day we are growing a stronger and fairer economyfor everyone. If Amazon can't recognize what that's worth, itscompetitors will.”

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New York State Senator Michael Gianaris represents District 12,which includes Queens and Long Island City. He provided thefollowing statement:

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“Today's behavior by Amazon shows why they would have been a badpartner for New York in any event. Rather than seriously engagewith the community they proposed to profoundly change, Amazoncontinued its effort to shakedown governments to get its way. It istime for a national dialogue about the perils of these types ofcorporate subsidies.”

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Corey Johnson, the New York City Council speaker and actingpublic advocate, provided this statement:

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“I look forward to working with companies that understand thatif you're willing to engage with New Yorkers and work throughchallenging issues New York City is the world's best place to dobusiness. I hope this is the start of a conversation about vulturecapitalism and where our tax dollars are best spent. I know I'dchoose mass transit over helipads any day.”

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Lessons Learned

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Barrocas noted Amazon is more skittish about negative press thanother companies. Media accounts including a May 2018 CNNBusiness article “For Amazon HQ2 Hopefuls, Seattle Serves as aCautionary Tale” reported on the disputes which arose overSeattle's increase in homelessness due to an escalation of housingprices relating to the higher salaries for employees at Amazon andother tech companies. It also reported Amazon balked at efforts toraise taxes to address homelessness. On February 14, theBloomberg BusinessWeek article “Escape from New York”reported on Amazon's disagreements with local politicians inSeattle regarding housing prices, homelessness and the company'sresistance to higher taxes.

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While encouraging large corporations to come to places like LongIsland City, Barrocas acknowledged people's concerns for affordablehousing, diversity and schools. “We have to give more buy-in to thepeople who object and we have to really speak to them. You need toget them on board and say, 'Hey, you obviously feel strongly aboutthis area. What do you think we should be asking for as apriority?'”

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Whalen noted the non-disclosure agreements that the city andstate entered into with Amazon started people off on a sournote.

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“I understand a lot of the concerns that were raised by peoplein the community. I understand what they were afraid of. Peoplecould have had a better explanation,” said Whalen. “In the future,that should be a takeaway.”

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Amazon has stated it will not seek another HQ2 to replace theone in Long Island City. Paul Leonard, managing consultant atCoStar Portfolio strategy, said he expects to see Amazon increasetheir focus on the Northern Virginia site. What happens in thatcity will certainly be of heightened interest.

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Betsy Kim

Betsy Kim was the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.