NEW YORK (Reuters) - It was the lunch-hour rush at the Court Square Diner in New York’s Long Island City on Wednesday, and co-owner Nick Kanellos pointed to the elevated subway tracks that rattle overhead as he fretted over the news that Amazon may build a major outpost in the neighborhood.

Like many long-time inhabitants, he worries how this once-sleepy enclave in Queens would absorb the up to 25,000 people the online retail giant may employ here as it expands outside its Seattle home base.

“It’s a whole soccer stadium at 8 a.m. each day coming in,” Kanellos said, gesturing at the narrow metal staircases leading from the subway platform to the street, already crowded with commuters at rush hour.

Amazon announced in September last year that it was seeking a site for a second corporate headquarters that would eventually employ up to 50,000 people. But it now plans to split its new headquarters between two sites, including Long Island City, according to a New York Times report.

Amazon again declined on Wednesday to comment on its selection process.

Kanellos’ apprehension was shared by other long-time residents interviewed on Wednesday on their home turf, a rapidly gentrifying area that sits just across the East River from Midtown Manhattan.

Few, if any, objected to Amazon.com AMZN.O itself: Many conceded they were happy customers of the world's largest online retailer, some paying for its Prime membership service. They just fear that their neighborhood is already bursting at the seams, with scores of glass apartment towers transforming an area long characterized by a mismatched jumble of low-rise buildings.

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The cost of this rapid development, residents say, is that local hardware stores and pharmacies have been priced out and an aging sewer system is often overwhelmed by the more than 10,000 new apartments and 1.5 million square feet of office space built in recent years, according to city data.

Kanellos, 50, took over the Court Square Diner in 1991, when it was one of the few places where the artists then using old factory buildings as studios could sit down for a cheap meal.

The neighborhood’s cinematic views of Manhattan only heightened the sense it was a quiet village overlooked by the rest of New York City, residents say.

“We felt like we had the place to ourselves,” said Pat Irwin, a musician and composer who for years played with The B-52’s and settled in Long Island City in the mid-1980s.

The 50-story, blue-glass tower that Citigroup built in 1990 was an early harbinger of the transformation. The reports this week that Amazon had decided to build part of its “second” headquarters here, along with an outpost in northern Virginia’s Crystal City, feels to some residents like the death knell for a neighborhood they love.

“It feels like we’re being walled in and it’s out of control and the neighborhood can’t handle it,” Irwin said.

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Irwin’s wife, Terri Gloyd, is the co-owner of the LIC Corner Cafe, which sits around the corner from MoMA PS1, a major outer-borough arts museum, and sells coffee, cookies and a pastry confection described as “a guava goat cheese Pop-Tart.”

Some of the residents who moved into the new apartment towers have become welcome regulars, even while some artist friends have been priced out of the area, she said. But construction and the ubiquitous film and television shoots, thanks to the proximity of Silvercup Studios, sometimes make the streets barely navigable to pedestrians.

“It already feels so oversaturated,” said Gloyd, who moved here in 1987.

Even so, if Amazon’s arrival brought with it a decent supermarket or helped bring a much-needed school to an underserved area, then perhaps that could soften its landing, she said.

If there is one constant in the crane-filled neighborhood these days, it is Manducatis, a white-tablecloth, Italian restaurant that Vincenzo Cerbone, 88, has presided over since 1974, after moving to the area in the 1950s. His wife, Ida, still cooks there most days, walking from their home around the corner.

“My husband, in the ‘50s, he predicted this,” she said with a proud smile, explaining their decision to acquire property in an area so close to Manhattan, no matter how unprepossessing it seemed at the time.

As for Cerbone, he shrugged at the Amazon news: New York City has always been changing. “These days, everything is new,” he said. “I don’t know if it’s an upgrade or a downgrade.”