Newark Airport deal for $432M Amazon air hub collapses

Amazon and the Port Authority of New York and New Jersey have walked away from a controversial $432 million air freight hub proposed for Newark Liberty International Airport.

Without specifying what led to the breakdown, the Port Authority, which owns the airport, announced in an emailed statement Thursday that the two sides were parting ways after almost a year of talks.

“Unfortunately, the Port Authority and Amazon have been unable to reach an agreement on final lease terms and mutually concluded that further negotiations will not resolve the outstanding issues,” Port Authority Chief Operating Officer Huntley Lawrence said in the statement.

A Port Authority photo showing Buildings 339 and 340 at the airport, where Amazon planned to create a regional air freight hub in a $432 million deal.
A Port Authority photo showing Buildings 339 and 340 at the airport, where Amazon planned to create a regional air freight hub in a $432 million deal.

The bistate agency and the e-commerce giant announced last August that they were negotiating a 20-year lease to repurpose two cargo buildings at Newark Airport. The project would create about 1,000 jobs and help speed shipping times for consumers across the region, they said.

But some labor groups and environmental advocates have been sharply critical of the deal, citing what they call Amazon's poor record on worker safety and warning of increased pollution for nearby neighborhoods. After the Port Authority's June board meeting, board Chairman Kevin O’Toole told reporters that the agency was pushing for guarantees of “fair labor” practices at the hub, but did not elaborate further. It’s not clear what role these conditions played in the deal collapsing.

Christie Peace, a spokesperson for Gov. Phil Murphy's office, likewise reiterated in April that any company doing business with the state "should embrace our state's strong history of partnering with labor organizations."

Flight cancellations:United to cancel 50 flights out of Newark. Here's what you should do if you're affected

Local:State probe finds over a dozen North Jersey towns cut hefty sick leave checks despite ban

Critics of the deal, including some elected officials, welcomed the news.

“While our communities fought for basic health and safety, Amazon was unwilling to comply with basic labor and environmental standards,” Elizabeth resident David Lenis, a member of the advocacy group Make the Road NJ, said in a statement. The group organized the campaign against the Amazon hub.

“This fight has shown us that when we come together and fight against corporate greed and environmental destruction, our communities win," Lenis said.

Amazon facilities around the country have been the target of union drives in recent months, with the movement securing its first victory at a Staten Island warehouse in April. Opponents in New Jersey cited the company's opposition to organizing and its allegedly poor track record on worker injuries.

Workers for Amazon's 53 New Jersey facilities suffered 1,605 workplace injuries in 2021, according to a report touted in April by Make the Road. That was nearly twice the injury rate of all other New Jersey warehouse workers last year, the report said.

Communities in Newark already are hounded by poor air quality from the airport, factories and the New Jersey Turnpike, the critics added.

The state has seen a surge of warehouses driven by the coronavirus-fueled e-commerce boom and New Jersey's proximity to several major ports, with Amazon leading the pack. But that expansion may have reached its limits. With online shopping not growing as fast this year, Amazon has been looking to lease out or sell some of its warehouse capacity, Bloomberg News reported in May.

Dozens of elected officials last month, including U.S Rep. Donald Payne Jr., D-Essex, sent a letter to the Port Authority urging the agency to halt any “secret negotiations” with the online retailer, after criticisms that last year’s deal was announced without public input.

"Today, workers' rights and dignity won in a battle against corporate interests, and I am so thankful to the Port Authority of NY/NJ for siding with the workers,” another of the letter’s authors, state Sen. Joe Cryan, D-Union, said Thursday.

Amazon spokesperson Maria Boschetti said the online retail company was” disappointed” that the deal fell through.

“Despite this outcome, we value our relationship with the Port Authority, and we’re proud of our robust presence in New Jersey and look forward to continued investments in the state,” Boschetti added.

The Port Authority selected Amazon's proposal last year over those of two other firms that bid on the 23-acre site at Newark Airport.

"The growth of air cargo and the redevelopment of airport facilities in a manner that benefits the region as well as the local community remain a top priority of the Port Authority," Lawrence said in Thursday's statement. "Moving forward, the agency will examine options and determine the best future utilization of these cargo facilities.”Board members of the agency didn't respond to messages seeking more details on what torpedoed the deal.

This article originally appeared on Amazon, Port Authority drop plan for $432M Newark Airport freight hub