Much Ado About HQ2
By Gary J. Nix | Reading Time: 7 Min
Valentine’s Day was quite an interesting day in New York City. The “highlight” of the day came when the breaking news alert hit: Amazon says it will not build headquarters in New York after mounting opposition. Unsurprisingly, the innanets went off.
Although the oft-maligned deal was now off the table, the arguing and posturing continued — all of which I found interesting from the time the deal was announced, to learning what was in the memorandum of understanding (MOU, put a pin in that for a moment), up to and through today. The thing is, I’m not here to talk about whether bringing HQ2 to NYC was a good or bad idea. The fallout has led me to thinking about this from a branding perspective, my favorite thing to do.
To summarize, I find that the major issues that led to and gave way to Amazon’s latest decision were built on a foundation of bad messaging. Therefore, while I have no trouble admitting that I am neither an expert in economics nor politics, the expertise I’ve gained in 23 years of strategic communications lets me know that better discourse and more transparency could have led to plans not being scrapped and less side eye for Amazon as a brand. As a matter of fact, what happened yesterday could be used to teach a course on the differences between public relations and publicity. So, let’s get to it.
The lack of trust directed at Jeff Bezos, inevitable rent increases throughout the borough, and perceived negative overall value connected to the deal empowered citizens and politicians to be incredibly loud in communicating their shared disdain.
Anti-Amazon Position: Why are we giving up so much?
The most publicized point of contention when it came to this deal was the $3 billion in tax breaks to one of the richest companies/CEO on the planet. Now, if you don’t know how people tend to react when any form of the word tax is invoked, here’s a simple set of rules:
Tax cuts for the rich or tax raise for the not = bad; and
Tax raise for the rich or tax cuts for the not = good.
To the general public, this rule of thumb works no matter what details lay underneath. This account was repeated over and over again to the point where it seems as if some people view this tax break as something akin to a signing bonus. It doesn’t even matter if or that the pact would not have been carried out in that way.
The lack of trust (via stories about the negative effects that have been placed on Seattle, a potential for loopholes, etc.) directed at Jeff Bezos, inevitable rent increases throughout the borough, and perceived negative overall value connected to the deal empowered citizens and politicians to be incredibly loud in communicating their shared disdain. Moreover, the stance was not met by an opposition that was prepared to directly rebut any of the concerns that were voiced, so it allowed anyone telling this side of the story to plant their feet even more firmly into the ground.
The biggest key to the detractors’ success was the fact that any concerns that were presented were addressed horribly, at best. The validity of the concerns didn’t even matter at this point. The inability to address the most talked about issue, by Amazon, the City of New York and the State of New York, only fed the detractor’s narrative and the New York stakeholders who were in favor of this deal should have absolutely known better in 2019.
Speaking of the pro-Amazon stakeholders in New York…
That being said, in 2019, individuals have the power to questions… at scale, thus muddying the attitude on what was being posited as a great boon to NYC’s society.
Pro-Amazon Position: Power for the People
I want to be very clear here. People power, for the residents of New York City, was the platform on which the State of New York and Amazon tried to push this pact through. The problem is that they built their argument on an old, rotting platform.
For example: this deal was slated to bring a minimum of 25,000 good-paying jobs, at an average annual salary of $150,000, to the City. Before ubiquitous technology ran most people’s lives, a platitude such as this would have been enough to sway sentiment in a positive way because the powers that be had the money spend in order to control the distribution and flow of messaging. That being said, in 2019, individuals have the power to questions such as, “How do we guarantee that these jobs go to New Yorkers as opposed to new transplants from Seattle or other places?” and “What is the salary range for these jobs actually going to be?” at scale, thus muddying the attitude on what was being posited as a great boon to NYC’s society. In other words, that stay the course and don’t engage the critics strategy does not work in today’s world.
Additionally, Cuomo, Amazon, et al. claim that 70% of New Yorkers were in favor of HQ2 coming to Long Island City. When I encountered this nugget of information it made me wonder, if this was the case, why didn’t either party lean more heavily on this axiom in their outward communication from the beginning? We all know that, in many cases, the loudest voice belongs to a small group of people — the vocal minority — but, if approximately 14 million people want this to happen, why not actively use this stat and power to assure people that HQ2NYC is a good idea? Better yet, why wasn’t this brought up more often?
By the way, this is not the only stat that could have positively shifted opinions. Remember mention of the MOU earlier? Well, here are some stats that I personally saw change or soften the minds of quite a few detractors:
$186 Billion in economic development over the next 25 years;
$13.5 Billion in tax returns to the City and $14 billion to the State; and
$1.7 Billion of the tax credits contingent upon and only paid upon the achievement of job and investment goals.
Once again, the goal of pointing out these examples is not to change anyone’s mind here. My purpose is to draw attention to factors that created compelling conversations that increased comfort in what this deal could be for some.
So, once again, I ask… why weren’t any of these facts used to refute messages from the other side? Why didn’t New York or especially Amazon bring that same energy?
And maybe, just maybe… there’s the rub.
…what about the 14 million some odd citizens of New York — many of whom are likely loyal Amazon (possibly Prime) customers — who wanted this? Why did you not put more effort into this for them?
Amazon’s Positioning: ???
To remind you of the headline that started Thursday’s news about Amazon’s decision — Amazon says it will not build headquarters in New York after mounting opposition. One could say that this type of reasoning is a bit flimsy. Add this excerpt from Amazon’s statement regarding their decision to leave, it only gets worse.
“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.”
Are you trying to tell me that, because of a small number of state and local politicians were opposed, you would rather hang the millions (and millions) of people who wanted this deal out dry. I mean, as far as I know, an MOU is not an iron-clad agreement. Thus, while you don’t have an obligation to stay, what about the 14 million some odd citizens of New York — many of whom are likely loyal Amazon (possibly Prime) customers —who wanted this? Why did you not put more effort into this for them?
Was the tax break not enough? Were the eyes of 8 million people in the immediate area watching what you did too much to handle? Did you not know realize that you cannot build in New York City without union workers? Were you just looking for an out?
I already hear you, “Gary, why are you jumping to these conclusions?” to which I retort, “I have questions and you should too.”
Remember, I’m a brand strategist. I look at multiple elements that make brands and view a brand as a promise. Why was Amazon so quiet in the media regarding the details connected to the value they were bringing to LIC? Where were the partnerships with community leaders and if they did exist, why did they do so in darkness? How did they not know that a significant portion of what their brand is is what people think about them so they should have been more active in the conversation?
By being so quiet in the beginning, not addressing questions in any way that would make people in the affected communities happy, and now seemingly abandoning the people who they say had their back, they have damaged their status as a brand and as a good corporate citizen. To what extent, that remains to be seen.
Lastly, since this post is written from the standpoint of the importance of communication, I invite all of my marketing, advertising and PR folks to discuss their opinion on how the flow of information affected this deal. Let’s face it, this will not be the last large company with designs to have some level of headquarters in NYC.