HQ2: A Failure to Engage

Lesson Learned: New York is not Washington.

The Amazon HQ2 deal was both a great opportunity and a closed door deal that would be problematic from the beginning. The most interesting aspect of the deal’s collapse, is how it appeared inevitable for so many on the ground in New York City real estate, while those actually cutting the deal seemed oblivious to the opposition that would come with it. Even the most obvious efforts seem to have been neglected, including minority and women owned business involvement, community discussions and meetings, and engagement with those in NYC that would have been most directly impacted by HQ2.

I can’t fault Amazon for not anticipating the way real estate development works in communities within New York City, but I can fault them for not hiring people who could have forewarned them about the cost of not engaging. Especially in this political and socio-economic climate, especially outside Manhattan, and especially when the deal was presented to the public in such an obtuse manner.

My own MWBE company, The Hoeg Corporation,  directly and immediately reached out to Amazon but was never contacted. We anticipated the community opposition very early on in the process and offered services in connecting to the community and availing Amazon of opportunities to ensure that the process would work for everyone.

Some of the advice that we gave in our initial outreach was that Amazon needed to substantively engage with the community, make firmer committments to job creation, be sincere in their approach with the community, and identify local community stakeholders who would go out and advocate for them. Apparently, exactly the opposite was done, and though the underwriting may have worked and the project would have provided tangible benefits to NYC, there were quite a few holes in the project.

There is no question that HQ2 would have been a major project that created thousands of jobs, but where were these jobs going? Who was going to get them? How was it going to effect transportation and minorities?  And the list goes on and on…

New Yorkers aren’t opposed to business and they aren’t opposed to technology, but in this case, it doesn’t appear like anybody on the deal side was looking at the optics of HQ2, because if they did, they would have seen red flags.

Authored by Daniel Hoeg, The Hoeg Corporation

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