Amazon's spectacle reminds me of Lebron's "The Decision". It's one thing to work out the details and make an announcement, but to purposefully turn it into a show about "What can you do for me?" instead of "Here's what I can do for you" made it not sit well with people.
Also, the pull-out letter also basically dumps the blame on state/local officials for not wanting Amazon, despite not all stakeholders being present at the table when discussions started.
I am announcing an exploratory committee on whether or not I may or may not Apply for YCS19 - I wont tell you if I will apply or not - or how much money my [stealth] startup-unicorn will attempt to raise for an innovative and world-changing product we have yet to decide on seeking a co-founder for. But I am telling you now that I am planning on letting you know, at the end of this quarter - or maybe next month or who knows when, that I am looking into a potential announcement about this announcement where I tell you if I will make a further announcement about my announcements.
I think what's notable is that they can do that and people care - Lebron and Amazon are both desirable enough that people cared. You (and I) are not desirable enough that people care.
I don't see it as a "what can you do for me". A lot of Amazon's interest were aligned with that of many New Yorkers. Both Amazon and most New Yorkers want to have a strong transportation system and a diverse economy that doesn't just rely on taxing bloated financial bonuses to pay for services. They also want New York to be an in-demand tech hub with a deep labor pool and be a place where people actually want to live. Cities should strive to be places where employers want to invest. We aren't talking about handing over duffle bags of money to Bezos. They agreed to offset some of NYC's exorbitant taxes and regulations that make this city hostile to many businesses. And supposedly the incentives were available to any employer of that size. The fact is that having a large Amazon hub in NYC would greatly benefit the city and its denizens
Sure, but Manhattan is not a ghost town either. The usual crop of employers is present, there's certainly no surfeit of supply on the commercial real estate market, etc. There are cities with mostly-empty skyscrapers and overly ambitious commercial centers. NYC isn't one of them.
Given the broken nature of the subway in NYC that money would have gone to the state government and been spent on god only knows what boodongles and not on imporving transport in NYC
Even now the upside people are apparently angry at Albany for being too focused on the city. It makes no sense to me. This is clearly not true and yet everyone panders to those people.
NYC population is 08.6M
NYS population is 19.85M
Just the city is forty percent of the population. If you add the surrounding areas, you'll be a majority (I think they'd want things done in the city). How does the city not have better representation in the state assembly? How does upstate keep getting away with swindling the city?
Would it? Silicon Valley used to be a great place to live for normal people. Now it's hell for anybody who isn't rich.
As James Damore recently tweeted: "Amazon abuses its near-monopoly to bankrupt its competitors by selling at a loss, threaten brands with counterfeits until they sell on Amazon, and use third-party merchants’ data to undercut them. All while being subsidized billions by the government." https://twitter.com/JamesADamore/status/1094985319575969792
New York, the wealthiest, biggest city in the country can have good mass transit by properly spending the money it already collects.
New Yorkers already pay tremendous tax dollars yet we have the mass transit that we do. The idea that there are no tax dollars is a myth. The funds are simply siphoned off to some other who-knows-what, and the remaining is poorly spent. The purported Amazon tax base would have likely been spent the same.
Their employees still pay tax though. With tech wages as high as they are it is probably non-trivial amounts.
I am not advocating for big businesses evading tax mind you. Just suggesting it would probably still be a boon for the state tax income if a bunch of tech wages migrated to the NY tax base.
I am of the opinion that any and all "Foundations" should be required to put their financials into a common splunk log repo with NLP search tools made available to anyone.
I'm a nonprofit fundraising professional, and I could probably talk about all the reasons why that is a horrible idea for 2-3 hours straight without repeating myself. I mean, at the very least, it's a bad idea for the same reason that exposing all the financials of every individual, or all other organizations, with the added benefit that you'd be opening people up to harassment for supporting certain social causes or belonging to certain religious groups. You might as well start a government mailing list called "hate crime targets."
If you think there are a lot of non-charitable transactions occurring using charities as a front, it would be a way better idea to just have the IRS audit more 501c3 orgs.
If you are trying to decrease fraud, it would almost certainly make more sense to audit wealthy individuals and for-profit corporations far more often.
Publishing total income is way different than publishing all your financial information.
There is information in people's finances that should be 100% private. What if an employer looks at the financials of someone applying for a job and sees they claimed $100k in medical expenses last year because they had cancer? Companies will do that if they have the ability, and people will lose jobs because of it.
It doesn't matter if you make it illegal. I worked a recruiting agency for a while, and illegal hiring practices are incredibly common.
Not just "What can you do for me", but "We'd never consider you for a HQ in a million years, but by all means give us a bunch of business intelligence gathered on your own dime we can use to site fulfillment warehouses..."
A good portion of all of that is stuff Amazon could compile, but they got cities across the country to donate probably tens of thousands of hours of taxpayer salaries to do it instead.
The nature of special incentives each proposal offered - custom ones for Amazon-only, or unusual ones - will also have told them which cities they've got extra leverage over if they come offering a smaller project like a distribution center.
> The most jarring incentive reportedly comes out of Chicago, which, under state law, could redirect between 50 and 100 percent of the income taxes incurred by Amazon employees right back to Amazon.
That article misrepresents what the Illinois tax credit is. It only applies to the portion of the income tax that the employer pays.
Basically the state law allows employers who create new jobs to not have to pay their portion of the employment tax for a few years, and that tax credit applies to every company.
I'm pretty happy with the way Illinois and Chicago played their cards with Amazon, we were basically like "We've got a lot of great shit, and if you come here you can take advantage of this tax credit." We didn't offer Amazon any special treatment.
> > The most jarring incentive reportedly comes out of Chicago, which, under state law, could redirect between 50 and 100 percent of the income taxes incurred by Amazon employees right back to Amazon
Stealing the worker's surplus labor value isn't enough?
A big difference is that contrived drama is at the very core of the entertainment business of professional sports. It makes for much of the entertainment! It's less helpful in the more mundane enterprise of 'building a bunch of offices and warehouses'.
Cough Trump Cough. It does look like Amazon tried to stir the same soup as Trump, and it doesn’t work (Note that I won’t defend that it worked for Trump, it’s just that it may have made it seem ok to pull money from cities using newspapers, because of that precedent).
I don't really see any connection. My point is that for the business LeBron James and the NBA are in, spectacle is part of the product and people burning LeBron jerseys in Akron is business well done.
People in Long Island City calling their political representatives and yelling at them about how they don't want your offices and warehouses is not business well done if you have 'building warehouses and offices' as a goal.
On top of that he is a big NBA fan so that he might have “stolen” the idea from LeBron. Also, he kind of was mocked for the whole thing, he’s no Messi or Cristiano Ronaldo so the majority of football fans wasn’t that interested in his future club (even though he still is a pretty good player nonetheless).
And the company that owns vast swaths of cloud computing space doesn't have talent to back it up? Amazon is way more dominant than LeBron in their respective businesses.
I don’t know about having more talent, but amazon definitely has more ego...At least LeBron didn’t demand special tax deals and non-public data from cities to bring his talents.
First, state income tax is exactly that, income tax imposed by the state, and governed by the state. There may be local jurisdictions that impose additional income tax but any savings there would be trivial.
While sports are important to the local economy, my understanding is that they are relatively minor at the state level.
Second, LeBron (and other athletes) earn playing income in every jurisdiction they play in, not based solely on the jurisdiction that the team is based in.
This means they are responsible for filing taxes in each of these jurisdiction.
In addition to playing income, they make money through endorsements and other investments. These are considered income in whatever state they claim is their residence.
It's in a players interest to establish a residence in an area with favorable tax laws.
Cities may try to woo elite players to join them, but tax savings isn't very compelling.
>Second, LeBron (and other athletes) earn playing income in every jurisdiction they play in, not based solely on the jurisdiction that the team is based in.
This means they are responsible for filing taxes in each of these jurisdiction.
That’s pretty funny how well settled that area of Law is, and yet again Amazon thinks it’s pretty special in that regard also...historically they haven’t paid those taxes either (state or local) and there was just a Supreme Court case confirming that in fact amazon isn’t special and that all this time they themselves should have been paying taxes where they had been selling/shipping goods.
Merchants don't pay sales taxes, they collect them on behalf of the taxing entity. The tax is owed by the consumer to the entity regardless of whether the merchant collects it or not. Amazon was trying to give itself an advantage over physical retailers, but thus had nothing to do with Amazon trying to get out of taxes.
That’s cute, but not the way the Law works generally. Maybe you can point to a single state where the law is different, until then I’ll just say the general rule is if the merchant makes of $x they are required by law to collect sales tax. Where or not the merchant does, they will be liable to the state for payment of the same, not the individual consumers.
If the law worked the way you represent why would any merchant collect and pay sales tax to the states?
LeBron (and other athletes) earn playing income in every jurisdiction they play in, not based solely on the jurisdiction that the team is based in. ... This means they are responsible for filing taxes in each of these jurisdiction.
Do you have a citation for this? I'm skeptical. I live and work in Texas. When I travel to my company's office in NJ, effectively earning income for a week in that state, I don't pay NJ income tax on that income.
Assuming your income is over $20,000, you ARE required to file a NJ state tax return.
Also, note that even if you don't file a tax return, doesn't mean you are exempted from doing so.
Example, as a citizen of Texas, you are also required to pay use tax on any items aquired out of state/country and used in the state. My assumption is that you don't also pay that either, even thought you are legally required to do so. It turns out that use Tax is particularly difficult to audit and collect for, especially without a mandatory return like state income tax.
I had a paid remote internship for about 6 months for a Texas company while I lived in Missouri. I had to file a Texas state income tax form, or at least my reading of the law indicated that I had to, and Texas gladly took the money.
Agreed. I see no exemption there for “I was just attending a conference and just stayed in a hotel for a few days.” Much less spending weeks at a remote company location or job site.
I also am not a tax lawyer. However, at least the NY non-resident form specifies that the tax is only owed on NY sources. Probably, when you are on a work trip, the "source" of your income is still the office you work at in your home state. Also worth noting that if you're only there for a week, you'd have to make a great deal of money annually before you got above the standard deduction cutoff for that state.
If you’re doing client work there — and you may not be! —- you’re responsible for the portion of the income earned in that state (you have “nexus,” in the parlance — I’m less sure about merely having presence in a state even if the work isn’t generating company income, but in some cases I think that’s treated as nexus as well). In those cases, your company should send you state W-2s for your income; most decent consulting firms offer tax prep services if you end up working in a lot of state and international jurisdictions with tax consequences.
The original proposal was that star athletes attempt to negotiate tax incentives with cities, in the same vein Amazon did with NYC (and many other large corporations do).
City income taxes add a trivial percent to the total income tax rate when compared to the state income tax level. Thus, if you got incentives from a city, they would amount to trivial amount of savings.
Athletes would need to negotiate at the state level in order to have a material effect on their taxes.
I hope that clarifies my point.
I imagine Athletes pay accountants who are well versed in how to fill out those forms, and, at least in the NFL's case, a lot of players compensation may be in bonuses, and not necessarily game-day checks (which would be subject to local jurisdictional income laws).
Ironically, wasn't that one of the reasons people speculated during that process as to why he chose Miami, no income tax? Its obviously not some sweetheart deal but he could have formed a super team in any city that was willing to pay a few super max-ish contracts.
No, Lebron just demands the coach be fired, management take on horrible contracts for Lebron's buddies, and all organizational decisions be run by him. Truly, Lebron's lack of ego is staggering.
1. Basketball is entertainment, and 'The Decision' was the result of years of speculation by the fans and the media. Furthermore you see similar spectacles for such things as National Signing Day, where top recruits hold press conferences to announce what college they are attending.
2. There is animosity and jealousy towards 'entitled millionaire athletes' that was made worse with players being able to control their own destiny instead of suffering under terrible management. "If they get to choose where to work and do so with their friends, why can't I" yells Joe Six-Pack.
3. The super team. Somehow NBA fans forgot or were ignorant of how absolutely stacked championship teams had been throughout history, featuring multiple hall of fame players and coaches. Elements of #2 play into this as well where it is management, not players, that should build championship teams.
4. A player like LBJ is far, far more likely to deliver (which he did with multiple championships) in the NBA than a company like Amazon is to deliver a value worth the taxpayer dollars they absorb.
It's a fine analogy used in the way they used it. Drawing attention to yourself for a decision you know is going to be controversial only makes it more controversial and draws out even louder criticism.
It is always vocal minoirities who do things, even with very popular topics.
Animal cruelty? There is only a vocal minority who takes a public stance, despite this beeing a very clear cut issue in terms of public opinion. Migration is the other way round: most people don't give a fuck, but have a loud vocal base that will even hurt themselves to make a point and you will be heard.
anti-nimby housing activism is a better analogy. The case against more housing construction is very weak at a objective and public policy level, but the only opposition is arguably a minority of people because selling it to the public is difficult. Urban charter schools are another one.
I see the same thing with the Amazon HQ. It's easy for Amazon to spin it in a positive PR direction by talking about jobs and increased revenue, but the policy case for giving in to Amazon's demand is actually weak.
Animal cruelty is a great analogy because the people who oppose it, which are the minority, are more vocal than those who are proponents of it, which make up the majority.
Do you really think only a minority oppose animal cruelty? How many people are proponents of animal cruelty? Neither of us have data to back it up but if you polled people I think the majority would be against animal cruelty, they just wouldn't spend their time opposing it, that's the difference.
I do too, but animal cruelty still bothers me and I try to buy products where I believe that the cruelty has been minimized. Animal cruelty is a spectrum and a lot of people care where on the spectrum they lie.
Except when it's the animals that have been killed for their food, then suddenly the conditions those animals are in are not concerning enough to take action. At the moment it's the minority taking any sort of effective change. Boycotts are too much effort for people these days.
If they know how most food animals are treated, which seems likely, then most people who eat meat are OK with severe, sometimes grotesque cruelty. It goes beyond opinion: they put their money down for it.
People make compromises with their social circumstances.
They're not "ok" with the level of cruelty but in a pervasive environment of limited culinary and social choices, they're okay with living with that knowledge.
Personally, I think you get further raising better people than trying to impose a moral standard in a population that (for the most part) eats diets that hamper cognition and volition ala high sugar and ultra processed crap. Intermittent fasting and a decent diet would do much more for the quality of moral calculation of people than telling them that their entire culture is morally bad. Because we're humans who utilize different strata of values, not mere moral robots.
To paraphrase Nietzsche, the moralists and priesthoods of the world devalue the very small things which give arise to moral judgment: Diet, climate, and habit.
Knowing how many food animals are treated and having the option to choose differently are two different things.
Not everyone has the money to choose differently.
At times there is no choice. This is especially true if you are a 15 year old. At 15, you basically eat what your parents eat. You can't generally afford food. You can't always just get a job if your parents won't provide education and/or if your school decides your grades aren't up to working. Oh, and you can't work all that often due to child labor laws.
At times, the actual choice is a bad one. Take eggs, for example. When I have the choice, I choose eggs from hens with larger cages. I realize these are hardly large, but they are better than the alternative. I've only lived one place that I could buy eggs directly from the source (during summer time) - but I'm literally an ocean plus some away from that now.
People honestly need a little bit of animal proteins lest they must take supplements. (Truth: I take vitamin D, as I can't make enough at my northerly location). I'm also mostly vegetarian. I eat fish once a week and I eat eggs and cheese.
I can only speak from my personal experience from living in Perú and the US. So I'd say that the majority of Peruvians and Americans support animal cruelty with the decisions that they make every week at the grocery store.
Being a financial supporter does not make one a proponent. There is nobody out there that I know of (maybe lobbyists) who actively argue that there should be more animal cruelty.
"Vocal" is maybe not the most accurate word for this. The reason why things don't happen despite polls showing majority support for them happening (or vice versa), is because the polls don't show how much people care one way or the other. People who care more will also do more - being vocal is one of the things, but another one is e.g. fundraising for campaigns and voting in primaries.
An unrelated example: polls show large supermajorities in favor of many gun control proposals (universal background checks poll at ~90%, for example). But most people who say that they want it, don't consider the opposite stance on that a deal-breaker for their vote - there are many other issues that are more important to them. On the other hand, the 10% that is opposed, is very firmly opposed, and that issue is close to the top for many of them, to the point of single issue voting. And when those people all turn up in the Republican primaries and vote as a bloc, those votes are enough to prevent candidates that displease that crowd from even getting to the general. And so you have all those party line votes, with every single Republican voting against, even though the majority of their constituents - and even the majority of their supporters - would prefer them to vote differently.
Most people are quite happy to keeping buying cheap factory-farmed meat and dairy, despite vague awareness of the generally horrific conditions of the animals (and humans) producing it.
I've been thinking a lot about trying to purchase pasture raised and sustainable meat products lately and part of that has been buying pasture raised eggs.
My last incredibly priced carton actually included a little slip inside with pictures of the hens in their pasture, and I believe even an offer to visit their farm.
Was really nice to go the other way. Instead of thinking about or ignoring the cruelty, to think about these happy hens.
This is true, but the bulk of this hyperbolic criticism comes from vegans, and they're going to use terms like "animal cruelty" no matter what livestock welfare standards you set.
Do you dispute that current lifestock welfare standards in the meat/dairy/egg/etc. industries permit what most would agree is animal cruelty if the same things were done to, say, the family dog?
Yes, I dispute that, if we are talking about Australia. As a farmer (both meat and crop), the better you look after your stock, the more you make from them. There is no incentive for cruelty and it will cost you money. Admittedly, we don't have feedlots on the same scale as the US and the majority of beasts go pasture to plate fairly quickly.
My point is, it would have been clearer and more honest to use the term “factory farming” if you’re talking about factory farming. I don’t know or care much about factory farming itself.
I'm pretty unconvinced. I don't see any reason to believe your line of reasoning; that the original poster is a hyperbolic vegan. Do you have anything beyond your assertion?
Who else would derail comments on an article about Amazon cancelling their NYC expansion with tangential and disingenuous discussions about factory farms?
Also, the way different accounts seem to seamlessly continue a deep and tangential discussion thread is also kind of suspicious. Almost like it’s one person who keeps switching alt accounts.
This off-topic debate started because of the assertion that it's the vocal minority that have rejected Amazon. The discussion on industrial animal cruelty for cheap produce is an example of how the wants of the majority doesn't always produce the best outcome for the well-being of other people, creatures, and the environment.
Regardless of peoples eating lifestyles it's undeniable that factory farms which produce most of the economically accessible meat are little concerned about animal welfare or the environment. The public on this matter also are least concerned about these matters related to the meat they buy off supermarket shelves, only when it's a video of a 'cute' animal being abused. It is only the minority of people in this instance that take a principled stance, if the silent majority did care we wouldn't be producing so much factory farmed meat after years of publicizing the abuse in the media.
I'm not a vegan but the way you characterize anyone who has a 'minority view' as some radical that only wants to cause problems is the attitude that allows corporations to operate it's abuse of worker standards and public funding to no one else's gain but themselves.
> The discussion on industrial animal cruelty for cheap produce is an example of how the wants of the majority doesn't always produce the best outcome for the well-being of other people, creatures, and the environment.
The discussion would have been clearer if the unambiguous term "factory farming" was used instead. The use of these ambiguous and disingenuous tactics of argumentation is reminiscent of PETA in particular. If you don't want to be characterized as a nutjob, don't act like one. That's my point.
This is the second time you've claimed that this thread is some sort of conspiracy.
For myself (and maybe the others), your responses jumped one step beyond reasonable. Because someone used animal cruelty to describe factory farming, that poster is a hyperbolic vegan? I think the fact that you were being hyperbolic incited a few extra replies due to the... irony?
Well, either it's a sockpuppet conspiracy (go ahead, check out my post history), or multiple people agree that your hyperbolic snark was not constructive. I'll freely admit we've come a pretty long from Amazon's HQ though!
Migration meaning what? Immigration within the US? That's been a hot button topic since the first Bush nationally, and has been the source of propositions in California since the my first memories of the early 80s. Interestingly, the more the internet was adopted, the more high profile the immigration debate became, nationally. Clinton talked quite a bit (even after his presidency), Bush Jr ignored it, and so on.
> Almost everything in your comment is factually wrong
That is, in itself, incorrect.
> Reagan passed landmark immigration liberalization in 1986
Yes, bringing it to the forefront, but without a way to communicate effectively, the party in power passed landmark legislation without a national consensus. Most people were unaware, until it passed and had no recourse after.
> Clinton was an immigration hawk.
I'm not sure what you believe, but that's incorrect, imo. He gave strong lip service in "securing borders" but was instrumental in toothless legislation that paved the way for the current passive acceptance alongside the tripling (ish) of the illegal immigration. The insistence that legal immigration continued to outpace illegal immigration year-over-year before and after his presidency is classic Clinton doublespeak meant to push an agenda by interpretation, which he maintained after his presidency. See his last John Stewart Daily Show appearance. Winners write the stories, so this will likely just be forgotten by the future.
> Migration is the other way round: most people don't give a fuck, but have a loud vocal base that will even hurt themselves to make a point and you will be heard.
GWB's reforms were not well supported, so the initial point I made stands, regardless of what was reported. The idea that GWB was doing anything but appealing to a wider base. What he did, was speed up deportations (ending catch and release) and stopped talking about it after his election. So you can interpret that how you will, but it certainly wasn't "fighting hard".
Most New Yorkers don't live in LIC and won't be directly impacted. If you asked me about a proposal in a borough I never go to I'd probably say "yeah sure no problem"!
There are a vanishingly small number of long time LIC residents. Up until ten years ago it was mostly industrial, one commercial tower, and a smattering of low rise residential.
So who makes up this supposed groundswell of local opposition? People that moved in to one of those shiny new towers last week and are already looking to slam the door behind themselves?
That's silly. Most of the people working there weren't going to live in LIC. It's not like that was going to be a requirement to work at the Amazon campus.
Besides this sniffs of the "yea build shelters everywhere but my block" attitude.
Big ticket? Of the abatements, only $500M (the portion related to construction) wasn't available to any business that met the state's requirements. Giveaway? These are tax incentives that are part of the state's tax code -- taking less in taxes to incentivize a particular action is not the same as giving away money that could be spent elsewhere (to illustrate why it isn't the same, that money is not currently available to be spent elsewhere). NYC won HQ2 originally in spite of not giving nearly as much as other jurisdictions were willing to. The polling is much higher than 56% when the question is asked generally, and the polling is highest in Queens which stood to gain the most. The city may or may not "need" 25,000 new jobs but LIC certainly "wanted" those jobs. The proposal was most popular among Black and Hispanic Queens residents and least popular among White Manhattan residents -- suggesting that those who stood to benefit from local economic activity were most excited.
Of all the crummy talking points defending Amazon in this situation, the most odious is the idea that regular working New Yorkers lost an opportunity to get good jobs and upgrade their livelihoods. Amazon has an established record of being terrible to its workforce, and any fool knows that the workers in Amazon HQ2 aren’t going to be regular joes in Queens. At best, ordinary New Yorkers had a shot at serving HQ2 executives their coffee or delivering their food. Even then, their rents would be spiking due to gentrification and their businesses would be threatened by Amazon’s unique flair for vertical integration. And don’t even start with the tax-positive arguments. Amazon doesn’t pay taxes. Have a look at their federal returns.
LIC and the rest of the broader NYC region has been undergoing gentrification for many years now, and Amazon probably would not have had much impact on that. Amazon's vertical integration will impact local businesses regardless of where they place their offices. The reason New Yorkers are not going to suffer is that there are tons of jobs in NYC and numerous big corporate offices. This is probably one of the most overblown issues in NYC politics that I can remember.
True about LIC already undergoing gentrification. But it’s still kind of affordable, at least to young white collar workers who are priced out of Manhattan or the expensive parts of Brooklyn. Amazon execs are paid big bucks. My friends who work there left behind multi-million dollar salaries without missing a beat. Having that kind of money fall into a developing area would ensure that even the baby bankers and lawyers were sent packing to the Bronx or Newark or wherever.
I’d be pretty surprised if a large percentage of those 25,000 jobs were going to have million dollar salaries. And who is to say that the handful that might have income that high would live in LIC, as opposed to a neighboring area.
The "regular joe in Queens" may not get the SWE job in Amazon, but they most certainly can understand that with 25,000 well paid workers comes lots of other economic activity. Do you think that retail owners, restaurant owners, construction workers, etc. etc. etc. are too stupid to understand that they're not going to get hired as a UX designer? Maybe the people who run coffee and catering businesses would LOVE to serve execs their food, because they like new customers? I also find it remarkeble that your argument seems to be: "amazon treats their workers poorly, but also they're too well paid and they'll gentrify the place, but also regular Queens residents won't get the jobs anyway" -- so they're going to gentrify the area with their terrible jobs? Why would the Queens workers want to work there if it's so terrible?
Amazon treats even highly-paid workers poorly. It’s a grinder from the warehouse to the boardroom. As for local businesses, do you think Amazon will hire some local catering company? They own Whole Foods. Go visit the campus in Seattle. Amazon has its own bars, restaurants, stores, etc. Their entire business model is undercutting and assimilating small business owners on terms that only get worse.
And they still will, with different employers that hopefully have a better reputation for the treatment of their employees (and hopefully pay a fair tax contribution).
> NYC won HQ2 originally in spite of not giving nearly as much as other jurisdictions were willing to.
Because the entire "competition" was a sham. Amazon was never going to park the future of the company into a place lacking talent.
> The proposal was most popular among Black and Hispanic Queens residents and least popular among White Manhattan residents
That's a good point, but the counter is that the Black and Hispanic residents are the ones who would end up pushed out by Amazon's white and asian workers.
It's not a thin skin so much as it is submitting on an ongoing narrative. They probably hoped they could do this and end up with the tax breaks, the NYC offices they want, more favorable conditions, and the public would laud them for it.
Instead they got a pretty massive backlash that adds more fuel to the already burning story about Amazon's mistreatment of workers, Amazon's 0% tax rate, Amazon lobbying defeating taxes in Seattle, etc... They have a PR problem already. They are bringing a whole lot of negative attention to themselves. They will have it worse in the future when they try to do the same sort of thing in Washington state.
For some reason, it doesnt surprise me that Amazon is not very committed to hiring the kind of people that want to live in New York. While they're probably not enjoying their PR, I can't believe this is their biggest lost.
"The kind of people that want to live in New York" includes Google, Microsoft, Facebook, and Amazon employees (Amazon has about 5000 employees in NYC already). There is also the financial sector with all those quants and risk managers and whatnot. I am pretty sure Amazon wants to hire people like that but convincing them to move to Nashville won't be easy.
Majority of the incentives are from Amazon’s taxes. 27B in economic activity for 3B in tax breaks for just 10 years is wayyy better than almost every other corporate deal. Better than Tesla for sure. That 3B will no longer be generated. You want a net 24B or a net 0B? New Yorkers chose 0
It's New York City, we don't need to give the largest company in the world a huge discount to do business here. It's not like the economic development of NYC is dependent on Amazon. It's a central hub to so many industries because of its infrastructure, talent, connection to capital markets etc, not because of handing out discounts.
> we don't need to give the largest company in the world a huge discount to do business here
Looks like you do, because now we have - no discount, no business.
> It's not like the economic development of NYC is dependent on Amazon
Of course, losing several billions of added value and 25K jobs won't kill the economy of the size of New York. Just as shooting oneself in the foot won't kill most healthy people. But keep at it, and sooner or later there would be a surprising development that the health is not what it once was...
Amazon is already in New York and their own statement today says they will continue expanding those teams despite not moving forward with HQ2. No discount, still business.
"There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams."
NYC generates about 10% of US GDP, already houses Amazon, Google, and every other global player. We have our fingers in everything already. We don’t need to play this kind of needy urban development three-card monty nonsense to continue kicking ass economically all day and night long.
Again, shooting oneself in the foot by losing 25K jobs won't kill New York. It just would make it a little poorer than it otherwise could be (some people a real lot poorer - talk to some RE developers that bought properly expecting Amazon to move in nearby...) New York doesn't need HQ2, it doesn't need any one particular development at all. But if it starts approaching all of them with this attitude, it gradually will start losing them, one by one, becoming poorer and poorer as they go. Would it kill it? Probably not, Detroit still exists. Is it a smart way to conduct affairs? I guess that's for New Yorkers to decide, if they think losing 25K jobs and billions in future tax income worth sticking it to Bezos - well, they can rejoice.
Amazon’s loss is another company’s gain. There will be more deals and more jobs, you’re acting like this is a recoverable loss when this is not a loss at all but an opportunity for someone else to fill the void, without drastic tax breaks.
New York City wasn't going to give Amazon a special discount. The company qualified for existing incentive programs that are already available to everyone: the Relocation and Employment Assistance Program, and the Industrial & Commercial Abatement Program.
It doesn't make a lot of sense for a city to offer incentive programs and then complain when companies attempt to use them. The city should make up its political mind about what incentive programs are available, and who qualifies for them, as part of the decision about whether to offer such programs. Programs should then be implemented neutrally, in a way that does not play favorites or pick winners and losers. Many other companies have benefited from these programs - the entire point of these programs is to achieve some kind of policy objective by being used.
The uproar in this case seems more like political brinkmanship, not any kind of sound economic policy designed to benefit the constituents of the city. These incentive programs were presumably passed in the first place to benefit constituents - that's why they're there, to attract additional investment to areas of the city that otherwise would not receive it. ("The Relocation and Employment Assistance Program (REAP) provides a refundable business tax credit for commercial and industrial businesses relocating to designated areas of New York City and making capital improvements to their space")
If people in NYC think that these incentive programs are a bad idea, harmful, inappropriate, or whatever else, then they should direct their anger at their political representatives, and cancel those incentive programs - not direct anger at the companies who take up the offer that the city put forward.
Other businesses can move into those spaces and will end up paying more in taxes. Property values will go up slower. Having one company move in sounds great but diversity might be a better longterm strategy.
> Other businesses can move into those spaces and will end up paying more in taxes
The first is likely, the second is very unlikely. For the simple reason that Amazon would not plan such project in a market that is so hot that is able to generate tax income at the same rate as concentrated investment project of the Amazon HQ size. Surely, it won't turn into a barren wasteland, but I would not expect it to produce more in tax revenue than big development like Amazon HQ would.
The waterfront is slowly getting nicer, but as soon as you go even a few blocks inwards it's still sketchy and/or industrial. An anchor like Amazon HQ would have had a ripple effect of improving the whole area (like maybe we could finally get a decent grocery store? It's cheaper to take the train into Manhattan and go to Whole Foods than visiting the local LIC Food Cellar and Key Food markets!), especially the more eastern neighborhoods within walking distance, which really aren't seeing much of any development today.
I guess the huge Citigroup office does not count? Also when last I looked a bunch of high rises were going up near Sunnyside Yard which is pretty far from the waterfront.
When I was 16 LIC was a pretty sketchy place, but as of a few years ago when I lived there it was completely different. There is still some light industry related to food trucks and taxi cabs, but you have to walk pretty far to get to anything more significant. The only sketchy area I can think of is the Queensbridge projects but that is north of the 59th st. bridge and pretty far from the rest of the neighborhood.
I know the Key Foods you are talking about - I used to live nearby it roughly 10 years ago. I can’t believe that it’s still really the only choice. Something is holding back LIC’s development to where it doesn’t seem to be keeping pace with surrounding areas. I think amazon could have been a big boon to getting things like a Whole Foods or other, better grocery stores into the area.
But that economic activity will go _somewhere_, and allowing businesses to pressure them into tax breaks is collectively gutting the ability of many city governments to function.
NYC is not exactly desperate. NYC is the anchor of an enormous economy that houses dozens upon dozens of large corporate offices and a vast number of jobs at all pay levels. NYC can afford to not deal with a corporation that is known for its poor working conditions and that did not even conduct its search in good faith.
Other cities are not so fortunate, but Amazon has no interest in truly desperate cities (or even cities that are not so desperate but could use the boost, like Newark and Baltimore).
NYC as a whole not being desperate still makes throwing billions in income for residents, not all of whom make as much as Amazon would bring, a dumb move.
Amazon’s role is not charity. It is to be as productive as possible. NYC does have the role in being a good steward of resources for its citizens. It threw out a lot of money and job for them due to a vocal minority.
There was no "giving away" anything. There was "not taxing Amazon as harshly as others". It's like I tell you "I want to rent space on your frontyard for my sign" and you say "ok, $100 per day would do nicely" and I say "I need it for the whole month and $3K it too much, maybe $1.5K would do it?" and you say "I am not giving you away fifteen hundred bucks!". Then I say "OK, was nice talking to you" and you got $0 now instead of $1.5K you could have. But you're somehow happy you didn't "give away $1.5K", which you never had.
I think the numbers in these pools are moderate enough to cast doubt on your claim. Would need to know about methodology, who paid for the survey, etc.
Even after reading this, I think the claim “most New Yorkers supported the project” is extremely dubious.
Amazon could have easily ignored them for all eternity if they wanted. A vocal minority can't influence a random housing development, you think they had any say over Amazon? That's a STRETCH
The politician that grants approval to the developments was just selected. He is the most anti Amazon person, he grants approval or not with a small committee. He refused to even meet with Amazon executives. 3 times they asked for an audience, he rejected all 3 and chose to grandstand. He built a name for himself, saw him on the news this morning and he looked like a complete fool.
The opposition is not because some high tech firm, whether it is Google or Amazon, is expanding in NYC.
The opposition is because of the Massive tax breaks and other $$$ giveaways New York was going to hand over to Amazon. I don't recall Google extorting NYC for $$$ before they decided to expand....
A "tax break" is just a reduction in taxes that otherwise wouldn't be paid at all. It still means a profit for the city.
It's not like NYC is paying Amazon to come to NYC. NYC would still make huge tax revenues from additional sales, real estate, income taxes, and corporate taxes.
Now they're turning that all away. It's such an irrational decision that if I were Amazon, it would raise a big red flag for me as well.
No need to open in a community that doesn't want your money.
The opposite is true, 100% of those taxes will be paid by some other business. Maybe you could make your argument about the New York City of the 1970s, but you sure as heck can not make that argument about the New York City of 2019. New York City is not starving for investment, rather, its biggest challenge nowadays is managing its fast growth. Other businesses will move into those buildings, and hire those workers, and they will pay normal taxes, which is a lot more than what Amazon offered.
How long would it be before other businesses would fully occupy the particular block of Long Island City Amazon was prepared to invest in?
And would the employees of these businesses earn on average equal to or greater than the average NYC Amazon employee?
These aren't rhetorical questions, and I don't know enough about Long Island City to have a confident guess at the answers but when evaluating whether Amazon HQ is economically a net positive, these are important to know.
It's like Amazon will occupy and populate all of the buildings from day 1. They will also eventually hire people or transfer people over, I remember reading that they plan to bring 25,000 jobs over the next 3 years.
This was the proposed location of the Long Island City campus along Vernon Boulevard bordered by 44th Road, 46th Avenue and East River: https://goo.gl/maps/6G43qfpqLws . Whether provided by Amazon or otherwise, tech employees would at least ostensibly be a net positive in terms of tax revenue.
> And would the employees of these businesses earn on average equal to or greater than the average NYC Amazon employee?
Does it matter? If they earn enough to live and spend locally then isn't that good enough?
Some Amazon employee giving a developer an extra 1000 bucks a month for a luxury apartment and getting their food delivered instead of going to the store isn't exactly an amazing economic benefit.
Are you sure? 25,000 employees * 12 months * 1000 = 300 million in economic activity.
Obviously not all 25000 employees would get an extra 1k, but the point being...these things can scale significantly when you're talking about Amazon. It's not a trivial thing for SMBs to fill the void that Amazon is leaving.
The obvious answer is what is commonly called the inertia of dead ideas. Leaders grow up in one era but take power in the next era and they often bring along with them ideas that are 20 years out of date. Military historians joke “generals are always ready to fight the last war” and political leaders make mistakes of the same category. Offering billions in tax breaks to lure businesses is the kind of thing New York might have sensibly done in the 1980s when they were desperate to replace the loss of the textile industry. Such a strategy makes no sense in 2019, when an abundance of investment has clearly replaced the lost industries.
For the same reason that politicians support objectively terrible deals for sports stadiums: their incentives are misaligned. They get all of the positive press when the deal is signed and someone else will have to deal with the long term fallout.
You're getting downvoted, but I don't think it's an unreasonable theory. Cuomo might run for President at some point; having Bezos happy and throwing a million or two into a PAC wouldn't be a downside for him.
> Can you explain this some more? Are you suggesting that governments establish a target figure and adjust that year's tax policy to make sure it's met?
They are just suggesting that the site that Amazon would have occupied will be rented by some other business. Probably, that business will not have gotten all the tax-breaks that Amazon did. Therefore, the tax collected by NYC on that space will be larger with Amazon gone.
The alternate businesses may not provide the same density of profit as Amazon, so their total tax outlay might be much lower over time. (One must factor in the other taxes paid by the Amazon employees as well.)
Also, pretty crappy to get downvoted for an honest question.
This is absurd. Some other businesses might marginally offset the losses, but only marginally.
That being said, businesses, like people, should have equal protection under the law. I amazon gets a sweetheart deal, every other business should too.
No, they won't. Any other business will get similar tax breaks to Amazon (excluding the $505MM special construction deal) relative to the size if the operations they want to put there.
Amazon being there would mean growth; whether it's greater growth than local businesses is hard to say.
But mostly, it's obvious growth that looks good for politicians who can say, "look, I brought jobs!" People notice it when a high profile company arrives whereas if your local chain expands, that's not even a news story.
Much of the political aspect of economics is due to the relative visibility of various events in the media.
The main driver of politics in NYC is real estate. Long Island City has already been undergoing a gentrification blitzkrieg, but adding Amazon HQ2 to the mix would yield fantastic profits to those of the rich who were in on it -- that is, those who had gotten the memo several years ago and taken up a good real estate position in the area. Plus, the irony of taking the proles' money in taxes to drive them out of their neighborhood homes and businesses must have offered an icing of sadistic pleasure to the mighty cake of profit. What I am wondering is how the deal was stopped. Usually, big real estate projects steamroll all resistance. There's money to be made! (Not by you.)
Turns out there were no special deals from NYC. All Amazon got in terms of tax rebates was standard stuff, available to anyone. It was big for Amazon because the headcount was big.
It certainly means revenue for the city but we don't know that it means profit. All of those people are going to generate trash, take the subway and consume city services. Why shouldn't Amazon pay like everyone else?
Let me explain it in terms that any New Yorker should be able to understand: If you are a New Yorker you are no doubt familiar with the concept of "one month free rent". Most buildings in NYC will give you one month free when you sign your lease. If a building doesn't give you that offer its probably not as tempting as another nearby building that does. Yet the "one month free" isn't a losing money proposition for the building because they continue to make rent money from you for a long time after the free month.
NYC was basically offering the same thing to Amazon: "hey come live in our city, we will give you a temporary tax reduction, in exchange for a TON of money over the next X years".
Overall the city wouldn't have lost money, it would have gained many billions of dollars of additional money in the future in exchange for an initial 2 billion reduction.
What New York City do you live in? I have never been offered, nor do I know anybody who's been offered a month's free rent on signing a lease. Places that do this are overcharging and driving up rents. Your comment may just be emphasizing the fact that there are multiple "New Yorks." And I suspect the New York that Amazon HQ2 would benefit would be the New York that pays too much to live in a glass tower and gets offered a month's free rent.
Not a landlord, but I imagine there are oodles of benefits to it from their perspective. If I can rent you an apartment for $4000.00 a month but tell you "$3666.67 (net rent w/ first month free)", then:
- Come next year, the default position is "you get a 10% rent hike by just paying the number on the lease."
- if you leave after a year, I've got price history at $4000 a month and can use that as an anchor for negotiations with the next tenant
There's nothing that says I have to start from fair market value and take a month off either. Say I call the apartment price 12/11ths of market value, but then advertise the net number and each month your great deal lets you pay only 11/11ths of FMV.
Bloomberg had something about this today[1] - something like 45% of leases in NYC have similar concessions.
I live in Williamsburg, Brooklyn which is obviously a significantly gentrified area. Not just the "glass towers" but most of the older brownstones I looked at over the past month while searching for a new place also offer one month's free rent. I can't argue with the fact that Amazon would contribute to gentrification because that is true. But I can also say that Amazon pulling out of the plans isn't going to stop gentrification.
What is the point of this comment? It combines some smug self-satisfaction about "Your New York" with your ridiculously insulated anecdata about the first month discount many apartments give.
A 5 second Google search shows hundreds of results for 1 month free rent in apartment listings.
What exactly are you contributing to the discussion?
@andosteinmetz I'll offer anecdata also as a born-and-raised New Yorker (FYI - I finally moved out because the job market did not support the living costs given personal constraints.)
NY is a shell of what it was in 2005/2006. Yes, there are more tech firms, but the 500,000 or so jobs lost after the financial collapse in 2008 have not been made up for. I welcome Amazon bringing in well-paid positions, because as a New Yorker, I'd like the city to support a middle class, not just wealthy foreigners parking money into LLCd condos staying empty.
Much of the gentrification could be due to the free money and ZIRP policy in the US -- it is cheap to borrow and thus people, especially wealthy people/corps, borrow heavily and raise prices and rents. There is little correlation between actual income and rents in NYC because of this external booster.
Wouldn't it be better if the source of rent increases in NYC be the presence of lots of well paying jobs?
@TuringNYC I agree that the role real estate investment is playing in driving rent increases is important to address - through regulation - and I’m all for bringing good jobs to the city.
However, I think we can do better than giving massive tax breaks to megacorporations with bad records on labor relations and what has seemed to be an adversarial relationship to government and public services. I have no interest in seeing a replay of what’s happened to SF in NYC.
I think it’s important for cities to stand up for the interests of all their citizens, not just software developers and product managers (etc) in negotiations with increasingly powerful tech companies.
That's a fair criticism, and I regret my tone and making the discussion personal. But as a life-long New Yorker, I do feel a personal stake in all this.
I believe OP is right that the month's free rent offered on an apartment is recouped by the landlord: in the form higher rents, which have become a real problem for many people born and raised in the city and which would likely only be exacerbated by Amazon's setting up shop here, especially under the conditions offered by the city.
Over the past 20 years New York has experienced an influx of wealth without commensurate investment in public services. The MTA is dying, urban blight is spreading and many of the new professional class moving here don't seem bothered by it.
Another piece of "anecdata": walking down Bedford Ave. in Williamsburg a few years back, I heard one wealthy newcomer say to another that she couldn't wait for the local pharmacy across the street from the new Duane Reade to close. Maybe this anecdote doesn't have the force of a "real data" but it may help some people on here understand why New Yorkers aren't thrilled by the prospect of a building a big Amazon campus and welcoming them with a handout.
I agree with you. Just in the last five years of living in Williamsburg I've seen the neighborhood change a lot. I remember that local pharmacy you are referring to before it got turned into an Apple store, and before the Whole Foods got built on the same block.
I'm not gonna lie, I'm part of the gentrification problem over the last five years, but to be fair New York gentrified me at the same time that I helped gentrify the neighborhood. I only made about 30k a year before I moved to New York and I lived in a trailer home back then. After moving to New York I got a few different tech jobs and now I live in one of those over-priced one month free buildings.
I share my story just to say that in my perspective gentrification is a complicated system, and like you I also have a personal stake in all this. In my experience working in tech in New York has been a huge opportunity to improve my life. Amazon would have offered roughly another 25k people such an opportunity, some of them would have been newcomers, and some hopefully long term NYC residents. I can't lie, some people might not have benefited as much as others, but at least those 25k would have been able to get the same opportunity I did when I moved here.
A real New Yorker wowie zowie. Your parents move here? Grandparents? That and a nickel will get you on the subway.New York has always been about the influx. You want people to be impressed with your long bloodlines go to England and be Lord Something Or Other the 19th.
The point is pretty clear: there are people out there who don’t even know what 1-month free rent is. The contribution to the conversation is an illumination of the divide between some generalized types of people in New York. The relevance to the OP is that there may be some wildly different opinions on Amazon’s perceived actions based on which generalized type of New Yorker you are.
The part where it's mostly overpaid software devs living in a bubble.
I live in that part of Seattle. It's the same part where people want to ban all cars because they never have to go anywhere that isn't walking distance, and their dog loves walking.
We should be absolutely clear about this: you are not getting "one month free rent." The cost of that "free" month is built into the other 11 months, as well as the difficulty of getting your full deposit back.
"One month free" is one of the oldest tricks in the NY real estate book, along with "preferential" rating.
Exactly. I'm not that old, but I've seen this dog and pony show so many times already that it's no longer surprising. The latest example being the Foxconn plant in Wisconsin. The increased tax revenue from that plant may never[1] recoup the investment Wisconsin made to bring it to the state.
The solution to that is to make the incentives performance based. And that's exactly what was proposed: if Amazon hadn't delivered the promised results the tax breaks wouldn't have taken effect.
That's not really a solution all by itself. Making the incentives performance based merely opens the possibility of being able to sue, nothing more. And when you're talking about companies with the size, power, and lack of scruples as Amazon, suing can be a losing proposition regardless of how correct your position is.
That's literally paid by those employee taxes? Unless you'd rather more homeless and drug addicts move in, which it seems is what NYC local politicians wanted.
The flaw is an implicit assumption that no alternative opportunities exist. Or in other words, the well-known concept of pricing.
It is exactly like a pushy customer demanding a discount on their groceries, saying: "Well, if I don't buy them you won't get any money at all!"
If you are confident you can sell enough groceries at the regular price, the economically correct decision is say "I don't need YOUR money" and laugh in their face.
Suppose we change it slightly: a Saudi prince wants to become a US citizen in exchange for some considerable investment into our economy. Do you find it objectionable? Because that's literally one of the available options today.
The point is that we're already selling citizenship for money.
In your original example, the only reason why it would ever make sense is if the Saudi prince in question can somehow produce more wealth for the public than they'd pay in taxes. In that scenario, it's exactly the same in the end, once you balance everything - you have sold them citizenship for money.
And if they don't pledge to earn you more than you'd save, then why would you even consider such a deal?
Yep. Definitely. This is exactly what Saudis do to US every time they can, like that 100B defense contract that made current White House into Saudis' faithful servants afraid to even mention Khashoggi or Yemen.
Sure but the fact is when your mom and pop business is going to pay a higher effective tax rate than Amazon you're effectively subsidizing one of the largest and most powerful companies in the world. You're not attracting amazon by slashing taxes across the board you're giving one company a sweetheart deal.
Which is simultaniously at odds ideologically with both libertarian and progressive thought. From a Libertarian perspective you can see the state as shaking down all of Amazons competitors to pay for building Amazon's infrastructure, training Amazons employees, and enforcement of Amazon's monopolies on IP. This is perverse.
The US and NYC specifically is approaching historic levels of inequality. If you want to reverse that you have to say no to giving one of the most powerful companies in the world a sweetheart tax deal. If NYC doesn't say no then who will? The scuttling of this plan doesn't reflect a lack of rationality. It reflects different priorities than you have. The more powerful Amazon gets thanks to these sweetheart deals the more leverage they will have and that can mean negative consequences for the populace.
Google is expanding to create 25,000 GOOD JOBS! But since it didn't extort $$$ out of politicians, the politicians can't as easily take advantage of it.
If you can get high-tech companies who are willing massively expand to create lots of GOOD JOBS without have to short $3 billion from the state budget, that might mean that the $3 billion dollars was a total waste and boondoogle....
Eh, sadly I think if Amazon had shut up about the process and just silently negotiated for tax breaks this probably would have gone through without issue. These sorts of stupid tax breaks get offered to large companies all the time and it's always a race to the bottom (and, with our broken campaign finance laws and legality of post-service employment, often times deals that are just clear losses get passed so some politician can get a sweet 5mil/year when they retire onto that same company's board of directors)
Please correct me if I'm wrong, but I'm pretty sure any such tax breaks would have to be public data by now, even if they were originally hashed out behind closed doors.
If you're implying that Google got tax breaks, and no one noticed the public data confirming these tax breaks, please provide evidence of the data that has been overlooked.
Show me the public data source where I could conceivably find that out and I'll do "please provide evidence of the data that has been overlooked". Because I don't think that data source exists.
I don't think you realize how opaque tax records are in many places. You seem to be implying that there is a way for the public - or even journalists - to acquire the tax and assessment information of individual companies. Attempting to do so is considered fraud in most jurisdictions (e.g. attempting to use a FOIA request for the personal information - including tax records - of someone else or a business of which you are not an officer).
The assessed property tax values of the property. What does that have to do with the actual amount paid? Tax breaks for an entity don't apply to the assessed value of property owned by them...
Every taxing district I have looked up property in shows the actual amount billed. They always show all applicable credits the property or its owner qualify for. I haven't tried to look up NYS records, but I don't think it's any different.
But again, what portion of the taxes in question are actually property taxes. I pay lots of business taxes and my business owns no property.
You are saying if I bought a piece of property and paid property taxes on it, that all of my business taxes would suddenly show up in the property tax records?
It's basically standard practice for any business to negotiate tax breaks for building in one place rather than another. I'm not going to spend any real amount of time tracking down theoretically publicly available documents on these deals. Sure the records exist, but I have no knowledge of a database I can search, and I'm not putting in a FOIA request.
Here's an article discussing the topic at large[0] (and Google is one of the beneficiaries here).
A sheriff of a small town told me how they ended up spending thousands of dollars to SWAT team which he thinks he will never use. The reason ? After some school shooting in another end of USA the folks of his county wanted to know how their LEAs plan to defend the local schools. The correct response here was that they do not expect such law probability even and even if it happens there is very little they can actually do.
But public does not like it and hence they had to put together a fake plan and waste money. Which could have otherwise gone into preventing real crimes.
A doctor giving someone a sugar pill and telling them it’s an active ingredient is definitely illegal. Placebos are used in medical studies where the patients know that they might be receiving a placebo.
You haven't seen the perpetual and energetic fights in my part of the nation about public funding for football (and other professional sports) stadiums. Sports businesses trying to get tax money to be spent in order to enhance their profitability is absolutely something that brings out the opposition.
It's more complicated than just St. Louis and San Diego not wanting to put up money. The owners of the respective teams wanted to move to LA pretty much no matter what, and requested particularly absurd things so they could pretend they tried
Is it just a coincidence that the Giants and Jets both play in New Jersey. Maybe Amazon should just move across the river and call it the New York office.
This was one of the common critiques of the LIC HQ2 plan - LIC doesn't _need_ Amazon to continue redeveloping well, but a nearby city like Newark gets access to the same talent pool and a big anchor tech campus could do a lot more good there. If you're gonna throw tax incentives around, it seems prudent to do the most good with them.
(Granted, Newark is in NJ... and the proposed tax deal was from NY. Thinking as adjacent states instead of a region bites.)
Other than the fact that stadiums are known to cost cities a lot of money without returns and NYC gets to avoid those costs and benefit from the branding.
Hundreds of thousands of people don't turn out for a parade for Amazon. They do when pro teams win championships.
Football stadiums get subsidized because football is extraordinarily, wildly popular with most of the people that pay taxes. Those taxpayers spend massive sums of money on sports every year, across the NFL / MLB / NBA / NHL / MLS / NCAA. Those people pay most of the taxes that fund the government that then pays for the stadium subsidies.
Taxpayers love sports, love spending money on sports, and the majority of taxpayers are clearly fine with subsidizing sports at all levels. They vote with their dollars and... votes, over and over again, year after year, decade after decade, to keep supporting sports subsidization.
See: football attendance and ticket spending on NFL and college games annually, as well as sports packages for television, merchandise sales, etc.
Sports are very popular, and stadium-lovers are vocal with their representatives.
But they are an outspoken minority. The majority of tax-payers do not support subsidizing stadiums.
And stadiums will get built regardless of whether the city gives them free money, because they're profitable. So why subsidize private profits from public coffers?
It worked out for Amazon. The biggest goals of HQ2 were to get around barriers to further growth and development in Seattle and to hedge against the risk of further populist backlash in Seattle. The fact that a populist backlash in New York happened so suddenly demonstrated that NY suffers the same afflictions as Seattle.
Pretty on point. Amazon is pretty decided to step aside those toxic politics, that is why I am surprised they choose NYC in the first place, because the climate there isn't that different from Seattle. Well, it turns out to be rather quick running into its conclusions. Fun ride.
Google doubled their occupancy to 7k. Amazon was promising 25k jobs. I'm stunned out how so many people in this thread are pretending thats equivalent.
empty promise is useless. did they sign a contract saying if they hire 1 person less than 25k and their average salary is 1 dollar less than 150k by certain time then they will refund all tax breaks? when bezos signs that contract then I would believe this.
Their entire deal, which was released with the initial announcement, is predicated on them creating those promised jobs and building those promised buildings. There are benchmarks along the way and all the incentives are based on meeting those benchmarks.
In short, yes, they would have signed a contract stating that.
I never said it was, or that it in itself wasn't a problem. It's far less than $3B though, so anyone talking about billions specifically for Amazon is wrong.
Also, if your problem is large tax breaks for corporations, the focus should be on those programs that make available the other $2.5B available, since any corporation with a similar scale project could get that. Focusing specifically on Amazon distracts from the existence of these programs and whether that existence is a good idea.
As an aside, your snarky tone detracts from your comment and hurts the discourse.
Exactly, this was a huge communication error on Amazons and the politicians' side. Offering such huge subsidies to a single company will never go down well in the current political landscape - especially not in a city with a resurgent left.
This is only irrational in a narrow accounting sense, and even then only if you believe in the numbers turning out as purported. You are considering a simple one-time game of "give me this and I'll give you that".
What is the long term effect of having government hand out money to every business that creates a hype? What is the effect of the amount of similar deals that will inevitably get hyped?
Should you play the game at all? Is it reasonable for someone to come along with this kind of deal? Is there no sense of fair play - that all corporations should be treated equally - whose logic is outside of the simple arithmetic?
The simple arithmetic that you are suggesting can potentially lead to unpleasant situations. What if the opposite were to happen? Supposed some big firm like Google decided to ask the government for money, or else they leave and sack every employee who doesn't want to go to their new location?
You could have firms queueing up to present you with new math problems.
Subsidies are paid out of tax dollars. Surely you're not arguing that Amazon's 2.5 billion investment will go straight back to the city's coffers?
It would generate property tax (if not abated) and income tax for the workers (both hired after the fact, and hired to complete the construction), but at what percentage of the total investment? 10-20%?
I guess time will tell. We can track how long it takes for another company or companies to develop the same properties. Hopefully it will be less time than the length of the tax breaks
But because the dog and pony show draws more public scrutiny, is that not a better, more transparent process for the tax payers vs the norm of corporations "quietly" making deals with city governments?
If Amazon required all bids and contracts be made public AND brought in the media circus to invite scrutiny that would seem to be the most in the public interest.
LIC and Queens was more resistant to hipster techbros than say, Chelsea. Manhattan is already a playground for the rich, lower manhattan even more so. LIC was justifiably worried about tax payer subsidized gentrification.
I mean, they're still doing that. Amazon is still planning on staffing up their existing NY offices, just to the tune of 5k new jobs instead of 25k.
The big dog and pony show was about asking for major tax benefits. They're still welcome to open a giant LIC office, they just won't get showered with a tax windfall for it. That's Amazon's decision that it wasn't worth it.
From what I heard, Google also doesn't get the kind of deals with tax breaks that Amazon did. Amazon wanted to leverage their added value (which is clearly existing) into some benefits. That did not work in this case, but it wasn't at all obvious it won't. Majority of New Yorkers supported the deal, as it was.
Also, "nobody bats an eye" is not right either - there are tons of protests against Google, which has been widely reported. They just didn't have a focus point like Amazon did, but if any city had a wide contingent of young socialist politicians caring about PR much more than for the jobs for the city population - the same could happen to Google too.
I think you're misreading Musk's reputation outside of tech circles. If they're aware of him at all, he's more or less viewed as a Bond villain at this point.
Yeah, professional protesters are a thing. It is not even NIMBY any more, it is anti whatever development. Especially in a ultra-leftist city like NYC, where in their mainstream political disclosure, business reads as sin.
After being a resident of NYC for 30 years and seeing the city change and become a technology hub and just a financial center I think this is a real loss for NYC.
It would also be in Long island City which would provide a huge influx of new workers and move that neighborhood forward in development rapidly. The down side would be that it would push some residents and business owners out but this is simply a fact of life in NYC where on a long enough time line every undesirable neighborhood eventually become desirable simply because of increase in residents and increase in real estate prices. That would also conversely make adjacent neighborhoods more attractive.
As for the tax breaks those would eventually be off set and it would still be cheaper than the amount that was spent on a useless Subway line that took a decade and really added no real capacity where it mattered.
How many jobs are in LIC though? This would've been a massive boon to the LIC and the NYC job market without the added congestion that putting these jobs in Manhattan would've caused. Manhattan is already at/over capacity, but I don't think the Manhattan -> LIC rush hour subway is.
I don't think it's reasonable to think that most people working at HQ2 would have been doing a reverse commute from Manhattan into LIC. It's equally likely that they would just be crowding the already crowded trains heading through LIC to Manhattan.
My comment is about tech workers working in that area. I think this is better for that area to have highly paid workers in remote queens who can live or commute in.
There’s already a ton of tech companies in Manhattan and Brooklyn. The new change would be to have a tech hub in LIC.
Better for who? Better how? Queens is already richly diverse in both income and in every other category worth listing. There is nothing that the borough lacks that mythical tech workers will bring in their wake.
On the contrary, much of what makes Queens quite unique is threatened by the one thing we know would follow on the heels of something like an Amazon HQ landing here: even more heated real estate speculation fueled by absentee capital, small businesses losing their leases, rent hikes, and general homogenization.
Nothing about Queens needs to be preserved in amber, but neither does anything about Queens require some intervention to bring up to par. Possibly public transit but that is true of every borough.
I meant better for people who don’t want to commute into the city, better for the tax base.
Certainly it will increase property values but I don’t think it will be absentee capital as the demand will be driven by something that requires occupancy, working at hq2.
Maybe Queens doesn’t require intervention, maybe it does. Since there’s no hq2 we’ll close to seeing the contra factual of not having this intervention. Maybe the area grows substantially without it.
If you're talking about the 2nd Ave stub, yeah, it was crazy expensive but it's serving 200K passengers a day, alleviating crowding on the Lex (entire Lex is like 1.3m), and UES to Times Square is hella faster.
Anyway, for me it hinges on how much special treatment Amazon got, $100K in tax abatements per job seems excessive, but others say it was pretty standard, would have been a huge anchor tenant for NYC tech and LIC, so much smoke blown on both sides it's hard to say ¯\_(ツ)_/¯ .
If they want to sell and support AWS to bigcos in NYC they are going to need a major presence regardless, not sure how much sense it makes for their other businesses to have a big HQ in NYC.
Tax abatements like this are a serious antitrust issue as well. Smaller competitors don't have the political clout to get tax breaks like this, will have to pay more, will pass those costs onto customers, and won't be as competitive.
They are also aggressively expanding into display ads, and the epicenter of the display ads ecosystem is in NYC. A lot of the hiring in tech they do in NYC was for ads positions.
Usually 1 job means 1 person-year worth of work. So 6.5 years of a tech worker would usually mean 6.5 jobs.
The jobs also tend to include things like construction workers, etc. So if you hire 500 people to build the place over 2 years that's 1,000 jobs created.
We're all going to have to do something for the people at the actual bottom once we cater to the people racing to the bottom. The people that can't afford to live at the bottom of NYC also can't afford to move their families to Central African Republic and run the tshirt machines producing stuff they ship back where they came from.
The USA already has a tax structure in place. Amazon could afford to pay the existing taxes if they wanted to. Heck, they're paying their tax accountants to figure out how not to pay those taxes. Why doesn't Amazon just buy, say, Nebraska, and set up shop there?
UBI, livable wages, raise estate and corporate taxes, operable unions without "right to work" (for less) / union-busting laws, more worker-owned co-ops and integrated standard-of-living net that lifts instead of treating people like criminals.
But first, getting rid of the corporate capture of both major political parties, elected officials, government and policy-making is a precondition to do anything to reverse the neoliberal, cannibalistic anarcho-capitalism inverted totalitarianism being forced on us.
I would also like some flying pigs and entropy reversed with my order of complete fantasy.
Im not saying its wrong, but us muggles worth less than countries have no real, meaningful say in the future at this, and to be fair also at most other, points in history.
Alexandria Ocasio Cortez & Bernie Sanders openly espouse many of those ideas and are two of the most popular politicians in America. These ideas have a tremendous amount of traction and their advocates are getting closer to the centers of American power. This isn't a complete fantasy -- it's not an inevitably, but it is absolutely a viable part of political discourse & struggle
Even if one of them were elected president - which, again, faces staunch resistance by the olgiarch controlled DNC - a vast majority of congress is bought and paid for by globalist interests.
The Occupy Wall Street movement was probably the last possible chance to correct course. Further attempts need to somehow capture a greater mindshare than the immediate aftermath of Bush's imperialism, wanton greed and corruption throughout the federal for thirty years across four presidents, the desolation of the working class, and the unabased billionaire wellfare that bailouts represented.
We are now a decade later into corporate and wealth consolidation, a decade after Citizens United, another decade of corporate media brainwashing the "average" American into compliance and obedience. And this is a global conglomerate of business that will deter and influence all governments and societies to bow to their interests. The only way out at this point is an internal struggle between these private men and women of influence between those who have ethics and the interests of humanity at heart and the majority.
This is extremely fatalistic. I agree that the system is severely flawed, but your conclusion that struggle for a better country is pointless is hopeless, and is not shared by a lot of the country. for many people, political struggle is necessary. This sort of fatalism is only really a tenable position when your livelihood is not at stake.
Fully agreed. And if you don’t like the people in Congress, start volunteering for people you think are good. Or make yourself into one of those people. It’s not fast, it’s not easy, but it is possible. And fight for law changes that will help change - I would highly suggest advocating for ranked choice voting.
the issue for me is that the main benefit of the tax breaks is capitalized by owners of AMZN stock, mainly Bezos, the wealthiest man in the world. AMZN is going to grow somewhere, they should pay taxes where they grow.
> Yeah but they will get that tax break regardless
I just don't understand this argument. It's like "Someone's gonna get fucked, so I'd prefer it be me."
That tax break is real money. Money that your community will not be able to spend on education, infrastructure, police, parks, all the things that make a place worth living in. Why would you hand that over to a company that doesn't need it?
Sure, but it's real money that your community doesn't get either way.
You're living in a fantasy world if you believe that the choice was legitimately between "Tax money and 25,000 jobs" or "No tax money and 25,000 jobs." No, the choice has always been between "No tax money and 25,000 jobs" or "No tax money and no jobs." You're not getting the tax money either way. Either Amazon builds with subsidies and you get no tax money from them, or they go elsewhere, and you get no tax money from them.
Your decision is really between "Do you want 25,000 jobs, or not?" 25,000 jobs whose incomes that can be taxed. 25,000 jobs that are going to shop at local stores, pay for local gas, pay local rents, raise local property values, and so on.
> Your decision is really between "Do you want 25,000 jobs, or not?"
Except that's not the choice either - as others have pointed out. If Amazon doesn't build something in NY, some one else will over the same time period. Will it be more or less than 25,000 jobs? Who knows. But NY is already an attractive metropolitan area judging by its density and property value. It's not a struggling rural town that can't attract talent and capital.
You make it sound like the city has a throughput of X new jobs per year that it allows to be created. There is no such limit. Without Amazon it's necessarily 25K fewer jobs than there would have been with Amazon.
Except it's not really just 25,000 jobs, right? It's increased stress on already struggling infrastructure. It's higher prices and increased gentrification in the same neighborhood that has the largest public housing development in the entire country. It's people who will need mail and emergency services and schools for their kids.
All those things cost money. Usually, that money would come from taxing residents and local businesses. But given that we've agreed that the city wouldn't be getting that money, it's not at all clear that those 25,000 jobs would be a good thing.
Jobs for whom? Not the vulnerable members of New York, jobs for upper middle class yuppies like you or me or nearly anyone on this site from the rest of the country. People in Queens aren't stupid, they know what the impact of Amazon would be and how it absolutely would not benefit them.
And almost certainly because of this struggle, the next City they try and go to isn't going to give them nearly as sweet a deal. They will demand more. Struggles like this are effective.
Thanks for saying this. People are forgetting the effect this move was going to have on locals. I am very dubious of the Queen's polls saying things like 70% approval. A dear friend of mine does social work and volunteering with inmates and was telling me how all their families were scared as hell at getting priced out.
NY does not need 25k jobs, it's growing fast. So no, it'll be better off with real tax paying businesses. Maybe they'll start slower, but it won't be a problem.
So no, that's NOT the choice to be made. That choice is something you've pulled from nowhere.
So if you assume government costs scale linearly per person (which is actually probably opimisic) and then you turn down a bunch of money a company would normally pay as they're bringing in dump trucks of people from out of state, that's a pretty good way to ensure under investment in things like infrastructure and other public needs at best, or the situation where you shove the tax burden on to existing (in this case lower-income on average) residents.
Another way would be that only taxing the jobs, and all the economic activity they might generate would still not cover the strain that the company would put on the local system.
I disagree. Amazon does not have as many choices as it would seem from the outset. Perhaps NYC is no longer going to get an HQ2 with 25k jobs, but Amazon will be expanding there regardless of subsidies.
The talent required is not evenly spread throughout the cities that bid on HQ2, and a world-class city like NYC does not need Amazon as much as Amazon needs them.
It's temporary. The city was projected to get back $25bn in tax revenue on the deal, and the initial outlay paid back in a few years. Amazon had also agreed to completely redevelop the waterfront of LIC. For the long term, the deal absolutely made sense.
>That tax break is real money. Money that your community will not be able to spend on education, infrastructure, police, parks,
You run a store. You put up a sign offering a 50% discount. I walk in the store and you tell me there is no discount. I walk out. Guess what? You didn't get any money and I didn't get anything out of the deal.
Amazon backing out of HQ2 doesn't mean you get to keep the money. You never had the money.
Real estate is a finite resource. NYC isn't some dying rust belt town, someone will setup shop where Amazon planned to, and they will pay taxes that Amazon thought they shouldn't have to pay.
How is Amazon taking more than what they paid for?
Think of a building with apartments for rent. Half the apartments are empty and the building is falling apart because the rent doesn't cover repairs.
The building manager offers new renters 20% off for a year. The existing renters protest and the new renters back out. You don't suddenly end up with more money to cover repairs.
No one is saying that money is being produced out of thin air.
Think of it this way. Walmart doesn't pay some of their employees enough to survive, so those employees get food stamps. Walmart makes enough profits to pay those people the equivalent value in food stamps, but they don't. It can be said that the government is giving Walmart some amount of money because Walmart's profits are higher because of the food stamp expenditure.
The federal government is not sending money to Walmart via a bank transfer, but there is an exchange of money taking place.
Now think about this in terms of city services. Twenty five thousand employees would not pay enough taxes to make up for what they use in city services combined with what the organization uses. Certainly not 3 billion dollars worth. In that sense, the 3 billion dollars could be seen as NY basically paying Amazon to give 25K professional class people jobs. There are other social side effects that are hard to assign a dollar value to.
Does that make more sense? No one is saying that money would come from no where. It helps if you assume for a moment that your ideological opponents are actually smart people who aren't just deluded, but that they have an interest that is actually in opposition to "your side".
When there are hundreds of towns in the US able to offer tax breaks to get companies to relocate you're never going to persuade everybody to not defect. It would be nice if there could be some enforceable agreement put in place but as far as I can tell US federalism prevents that.
Depends. If nothing is being constructed on that site like HQ2 then you won't get the money you 'lost' on the tax break. Unless these tax breaks include refundable tax credits?
I rather the money go to bringing tech jobs to NYC and making it a true technology hub then leave it in the hands of the city to spend billions on useless subway lines that are 3x the construction cost of anywhere else in the world:
Ah yes, "useless" subway lines that carry [checks notes] 5.6 million trips a day.
I'd rather have money go towards our public transit system, no matter how fucked up it is at the moment, than spend another cent on bringing tech jobs that will come here no matter what. NYC's been a "true technology hub" for a long time, regardless of one giant company deciding to abstain from coming here.
People want to live and work in NYC in part because of those useless subway lines. There is no need for NYC to hand out taxpayer money to any company. Companies will come regardless.
Increasing density isn’t going to make subway lines cheaper by the way.
+1. I've fallen in love with NYC over the past few years in no small part due to the transit system working well enough for me to explore all around it comfortably.
> Yeah but they will get that tax break regardless
Evidently not. Their tax break in Northern Virginia was not nearly as egregious (northern VA resident here; I'm totally fine with what we're paying for what we're getting). By contrast, what they were getting for LIC was insane.
And by not having anyone else lined up and by looking at the backlash over the size of the tax break, I'd be surprised if anyone else approached that amount, so it doesn't look like they'll get that tax break regardless.
Wouldn't you rather existing NYC residents build new companies to make it a tech center?
You're just letting the giant school bully take over your neighborhood for below market value (due to the massive tax breaks) and declaring "Look! We're a tech center!"
> below market value (due to the massive tax breaks)
I don't see how "below market value" follows from "massive tax breaks". Are you implying that the standard tax rate is somehow determined by the market? Because it's not, and "market value" is whatever the market is willing to pay for it. Unless they have someone other than Amazon offering the same benefits for less, then Amazon offer was market value.
Playing Devil's advocate, these were tax cuts on new jobs and business. And even with that the income to the city coffers would be greater even in the short term.
Would the tax breaks eventually be offset? Amazon paid zero federal tax for the last two years running. They're experts at tax avoidance. I don't see any reason to assume they wouldn't do the same in NY.
> Amazon paid zero federal tax for the last two years running
Not paying Federal income tax isn't paying no taxes. Also, the "zero federal tax" meme is popular among the Bernie Sanders crowd, however, much of Amazon's credits were due to paying stock-based compensation. In 2017, they paid out almost a billion dollars in stock compensation -- compensation for which recipients are taxed -- and taxed at a higher rate than the equivalent funds would have been taxed if retained by the company since such compensation is taxed as ordinary income -- not only are federal income taxes due, but also social security and medicare taxes. The point is that $917 million in stock compensation was written off against Amazon's income, but that $917m likely yields roughly $250 million in federal tax revenue , while if that were taxed as company income, it would yield roughly $110m given the historical effective tax rate paid by Amazon.
Essentially this: If Amazon didn't exist, the US government would be far worse off in terms of tax revenues, despite Amazon paying "zero" taxes. An intelligent view of the situation wouldn't look at "federal taxes paid" by the entity of Amazon, but their total tax revenue impact on the United States government -- including their state and local, and taxes paid by their employees. If you wanted to be more intellectually honest about Amazon and taxes, you'd also include the tax impact of everyone that profits as a result of Amazon. There's also the impact at the consumer level -- the price of products is the sum of all of the inputs used to produce, market and deliver that product. If you raise the price of any of those inputs, prices necessarily increase. Let's say we increase the taxes of Amazon -- that means that their "Hefty Garbage Bags" are now selling for more money, but that also means that competitors selling Hefty Garbage Bags can also raise their prices. Essentially corporate taxes have the same market-wide effect as a tariff -- raising prices for everyone. Who gets harmed most by higher prices for consumer goods? It isn't the "rich." It's the poor and middle class. Lower prices for goods helps the economy far more than the equivalent amount collected in taxes due to deadweight loses.
At least one of the following would have to be true for that to follow: new people would have to move to NYC specifically for Amazon (or to fill vacancies created by people leaving other companies to work at Amazon), or otherwise-unemployed people would have to become employed because of Amazon, or the people taking Amazon jobs would have to be paid more than they otherwise would. None of these would be guaranteed, though. Unemployment in NYC is already low, and there are significant impediments to moving to NYC unrelated to hiring (high cost and limited availability of housing, for instance). It might well be that the same people would end up employed regardless, just at Amazon instead of elsewhere, and other employers would just have higher vacancy rates. These same people would then produce less total revenue for the city/state because more of the taxes they would have been paying regardless would go to subsidizing Amazon.
It has, but is almost undoubtedly slowing as Seattle becomes more expensive and housing becomes more scarce (in other words, as it becomes New York-like). Massive inbound migration was possible because pre-Amazon, housing in Seattle was comparatively plentiful and cheap.
Seattle has a housing crisis because it has large amounts of the city with extremely restrictive residential zoning and refuses to compromise. They have large areas where multi-tenancy housing can't exists. Additionally, in the US everyone believes housing is not a depreciating asset. There is a reason Tokyo is the largest city in the world while being significantly cheaper to live in then similar cities.
Of course. This is true of New York as well, especially outside of Manhattan. I, too, would prefer a regulatory environment that allows for denser construction. None of that changes the fact that the regulatory environment is what it is, and as a practical matter it limits the extent to which people are able to move to either city to work for Amazon.
How much increase in tax revenues will NYC get now that they’ve scared off their expansion? NYC is not responsible for Amazon’s success and is not entitled to a share in their revenue via taxes.
Claiming that they are simply because they want to expand and hire into their market does not result in successful outcomes for either party.
But it's also not the case that the increase of "income and sales tax payers" for NY would be zero without Amazon, so the benefit would have to take that baseline into account. It's not an easy calculation, and there are reasons beyond pure money as to why you wouldn't want an Amazon HQ.
all people who would qualify to work at Amazon getting 150k per year are already working somewhere making something close to that. this was not going to change employment rate or boost income taxes. this was going to drive housing prices, especially rent thru the roof though.
> all people who would qualify to work at Amazon getting 150k per year are already working somewhere making something close to that. this was not going to change employment rate or boost income taxes. this was going to drive housing prices, especially rent thru the roof though.
Those people might not currently be in NYC, and they might have moved to NYC to work for Amazon. NYC would have received more income tax revenue if high earners moved there from somewhere else.
I just don't understand the logic of politicians such as Ocasio-Cortez. Amazon HQ was going to bring 25,000 high paying jobs to the area, providing growth and opportunities for her constituents.
Her argument against is that the Amazon HQ would further gentrification and she was appalled by the government subsidies. So she'd rather limit new growth, prevent new jobs, and stifle wealth to prevent luxury condos and Starbucks from going up? Make no sense, she is literally preventing her constituents from moving up the economic ladder.
Do you think there are 25,000 high skilled workers in new york sitting around waiting for Amazon to show up? No, those workers are in high demand. So the only option is too pull from outside the region further driving up the cost of housing. Its pure numbers. What about the low skill jobs? Amazon doesn't employ cleaners and other low skill workers. They contract those jobs out, so the low skill employees see no benefit from working at Amazon anyway. Even if we pretend that Amazon can only employ native new yorkers, there aren't enough to go around. So they'll be taking jobs from other organizations, like small businesses, who can't afford to compete with Amazon.
So, what's the benefit to new york? Yea, there are 25000 new jobs. But the choice isn't 25000 jobs or no jobs. Its 25000 jobs with amazon and some number of jobs from other businesses. Other businesses will employ those high skill workers because there aren't enough to go around.
Literally tens of thousands of students graduate each year from NYU (16K alone) and other colleges in the area. You're right that skilled workers don't sit around waiting for jobs to show up. They'll go to where the jobs are, which for tech still largely means the West Coast. And I say that as a NYC resident and tech entrepreneur. The tech scene in NY is weak, and non-existent across the river in LIC. Having an Amazon HQ in LIC would have been a great anchor around which to build a stronger startup scene: If your startup fails, hey, there's always Amazon to fall back on (instead of just the financial sector).
But I'm sure the students are actually grateful that they were spared from Amazon and living close to home, and that the Bay Area residents will continue to welcome each new batch with open arms!
As someone who worked as a software engineer in NYC for 6 years ~5 years ago, I couldn't disagree more strongly with your claim that the tech scene in NY is weak. It's second only to Silicon Valley when it comes to tech jobs.
It's second, but I do think it's weak relative to the size of the city and the unfulfilled potential of what it could be.
The NY metropolitan area is ~20M people, but it's clearly much weaker when it comes to tech than the bay area at only ~7M people (I'd say, a magnitude less in number of tech startups alone), and somewhat stronger than the Boston metro area at 4M but not significantly so. Having lived in all three (and now living in Manhattan for 4 years), I don't think for example there is significantly more tech meetups (maybe even less?) or startups (definitely numerically more, but not of better quality) than in Boston, while by numbers alone it should be a whole magnitude greater.
For the new grads, you're still getting tens of thousands of people moving out of campus housing and into the non-subsidized market, so it hardly seems different that bringing people from out of state.
So the ability for your own constituents children to stay in their own home state given choice and opportunities is now equivalent to Amazon bringing in 25K out-of-state employees. Gotcha. That is about as direct a FU from the "I got mine" boomer crowd and politicians that nixed this deal to the next generation as you can get.
> Amazon doesn't employ cleaners and other low skill workers. They contract those jobs out
Is this any different from how other companies do it?
> they'll be taking jobs from other organizations, like small businesses, who can't afford to compete with Amazon.
How many small businesses in LIC are competing with Amazon for business/workers? Does LIC even have tech jobs? I lived in NYC for 5 years working in tech, and I don't recall ever interviewing for a tech job in LIC.
> So, what's the benefit to new york?
25,000 jobs with $100k+ salaries. I get that there aren't enough native native New Yorkers to fill the jobs, but since when is NYC not a city of transplants? Amazon or not, this is already the state of things, and I don't see that changing. I mean LIC is already a ghost town of glass luxury residential apartment towers.
> the choice isn't 25000 jobs or no jobs. Its 25000 jobs with amazon and some number of jobs from other businesses. Other businesses will employ those high skill workers because there aren't enough to go around.
Is there a strong demand to build out jobs in LIC matching the 25k that Amazon would've? I'm not being facetious, genuinely wondering. I only went to LIC a few times, and my impression was that it seemed like a ghost town of glass luxury residential apartment towers. I don't recall seeing a thriving office/commercial center. Seems like everyone just commutes into Manhattan to work.
Actually no, gentrification causes existing homeowners to increase their property values. It literally gives the existing community the opportunity to move up the economic ladder.
_Only_ if the existing community is _also_ the existing landowners. This is not always the case, often you have a large renting population. These renters only see there costs go up, not their assets.
Increasing property value shows up on the balance sheet and the only way to access it is to sell the property and leave, or take on debt.
Increasing property values also mean increasing property taxes, which show up in expenses and are due every year whether or not you have the money to pay them.
Does taking out a home equity line to pay your taxes sound like a good idea to you? Me neither, and that's why rising property values are often not welcomed by residents who are not already financially well-off.
This does not even get into the impact on renters, who might face being evicted so a property owner can sell, or rents rising faster than their wages.
> Actually no, gentrification causes existing homeowners to increase their property values.
Property values are not necessarily wealth. It is entirely possible to gentrify existing homeowners out of their homes despite increasing their property values -- this moves homeowners down the economic ladder.
Yes, selling their house technically puts fresh cash in their pocket, but only by drastically increasing their cost of living and by making them search for new housing (which by definition will have to be somewhere cheaper than their current neighborhood, since by definition they can no longer afford their current one).
All of this is usually a large net loss in total wealth, despite the sale of their property. Owning a gentrifying home gives you the illusion of wealth building, but if you live in that home, it's really just lifestyle inflation until you sell out.
None of the above is a hypothetical, either. That is an accurate description of how real-world Gentrification usually plays out in Midwestern/Flyover USA today.
With that in mind, NYC is probably the worst possible place for that since almost nobody owns their own property there, it is mostly all rented out by multi-millionaires.
So you really think Amazon was only going to hire people that already had wealth. It's not possible that somebody making $50k a year, could land a great new position at Amazon making $150k? Cortez is shooting her democrat constituents in the foot, and living up to her affiliation of democratic-socialist.
> Amazon would be recruiting people from Ivy League schools, big consulting firms, other large tech companies
Amazon is not that pedigree-driven, most people I know who work there went to decent mid-ranked but not Ivy League level schools. Wall Street (front office) and big consulting firms are literally pedigree driven to the point where they often only recruit on Ivy League campuses, Amazon and most other big tech companies are more egalitarian caring more about the tech interview than your diploma.
Disagree, this constant propagation of rigged system or unfair game is not accurate. I know lots of people who came from very little and were able to work themselves up to economic success. In fact many of the people on the Fobes list came from poor upbringing and backgrounds.
The US (I assume you're talking about the US) intragenerational mobility is actually quite strong, meaning people have the ability to impact their own economic outcomes if they choose, or in other words, the American dream (TM). Decreased intergenerational mobility in the US is actually a function of decreased fraction of families earning below 100k, meaning, less people by fraction in the lower and middle class as they've pushed up into the upper >100k tier.
Going from the top, Jeff Bezos himself and Warren Buffet both grew up in middle class environments. Bezos worked at McDonalds as a short order cook while Buffett while young was notoriously hard working and frugal. Buffett would take his paper route earnings (mere dollars) and invest in stocks.
Anyway, I don't have the resources and time to go through the entire Forbes list, but I suspect there are a lot more people than most would believe and perhaps like to acknowledge from middle class or "lower" class environments.
AOC’s logic is very straight forward. She wants to take money from you and I through massive taxation and redistribute it to her low income constituents through massive social programs. Don’t let her “soak the rich” bait and switch rhetoric fool you, the middle class always pays for new government spending.
she's anti status-quo but are unwilling to sacrifice short term for it.
basically her dream case scenario is to tax amazon 5B and then invest 3B it to bring them to Queens.. and then rake the returns going forward. In what fantasy world would that ever play out?
Hey, remember those Amazon insiders that bought property on the cheap?
"...Amazon employees are apparently eager to get a head start on the New York City real estate game.
Condo sales in Long Island City are soaring following the announcement that the Queens, New York, [a] neighborhood will host part of Amazon's HQ2, The Wall Street Journal reports. According to The Journal, one brokerage firm sold 150 units in four days last week — 15 times its usual volume — after Amazon announced plans to open a headquarters in Long Island City...."
Depends if they can hold. A lot of speculators are going to have to take an L if they thought they were going to flip as Amazon ramped up. Especially if they took debt to do so.
Adam Smith is down with that statement too. he said it best in his book "The Wealth of Nations," published coincidentally in 1776 that a home/house/condo is not an investment:
“...a dwelling-house, as such, contributes nothing to the revenue of its inhabitant. [...] and though it is, no doubt, extremely useful to him, it is as his clothes and household furniture are useful to him.” [...] If it is to be let to a tenant for rent, as the house itself can produce nothing, the tenant must always pay the rent out of some other revenue which he derives either from labor, or stock, or land. ..."
My advice to my kids is that they should buy a dwelling and not live in it. Let it be an investment, let someone else pay the mortgage and the upkeep as well.
If they bought before people knew Amazon was coming and sold now would they really lose anything? Probably still kept up with the price of inflation even now
So this was (IMHO) a shit show from go to whoa. The dog and pony show was a transparent shakedown where Amazon would still probably go where they were always going to go.
The whole splitting HQ2 I think showed this. Like it's not even an "HQ" in any sense of the word. It's just an expansion.
Also with talk of "25k jobs"... what jobs? Are we talking software engineers or warehouse workers? There's a difference.
I don't know the inner workings of this but it seems like Cuomo was the driver here with de Blasio on board. This was a missed opportunity. NYC needs several things from NYS that are politically unpalatable upstate. Top of that list is:
- Property tax reform; and
- Congestion pricing.
NYS grossly favours SFHs for property taxes. For example, a $3m brownstone in Park Slope I saw had ~$700/month in property taxes. A similarly priced apartment would have more like $1500-2000/month taxes. A $100m apartment would be taxed at ~$15k/month.
NYC has on several occasions tried to introduce congestion pricing on people driving in or into Manhattan (something I 100% support) but the efforts have failed as this is the jurisdiction of NYS and NYS has no interest in this (so far).
Why not frame this issue as NYC supporting these efforts to fix issues with NYC like these? The deal may have gotten much more traction were this the case.
So I understand the need for government intervention in large projects, say if Amazon were to build 8m sq ft of office space. Regulatory approval can be nigh on impossible.
That much office space is hard to find in NYC. I think Amazon missed the boat with Hudson Yards (probably the last place this would've been possible in Manhattan).
I agree with other commenters that the net effect of this is about zero. Amazon is trying to have a PR moment. They'll still expand in NYC as it suits their needs. They'll still get tax breaks like any large corporation in NYS/NYC would.
> what jobs? Are we talking software engineers or warehouse workers?
Workers with an average salary of $150,000, I think it's disingenuous to act like you don't know that but you're also an expert in property tax reform.
Pay one person a salary of $1m and you can pay 9 people $55k to average $150k. The average means nothing. Will there some site lead earning $20m/year bringing up the average?
The Virginia agreement actually has a clause to prevent that loophole from being abused to the $20 million/year extent. Jobs that pay more than $850k/year (adjusted upward by 1.5% per year) can only be calculated into the average as being a $850k/year job.
Quoted from page 2 of the Virginia agreement [0]: "If any of the persons holding New Jobs are paid “wages” in any calendar year in excess of $850,000, as escalated 1.5% per year, as shown on Exhibit D, the amount of wages in excess of $850,000, or the higher escalated amount, shall not be included in clause (A)."
Actually, those billions wouldn't have been taxed at all. That was part of the deal: Amazon gets all of the income taxes that are paid by their employees in the first ten years.
To be more specific, this part of the deal is called the Excelsior Jobs program. It rebates to Amazon 6.85% [0] of the wages earned by the company's employees, which effectively does mean that income taxes get paid out to Amazon (in reality, the income taxes paid plus a little more due to the NYS tax brackets [1]).
That being said, there's no city-level income tax rebate. Assuming the tax brackets currently in effect hold steady until the full 25k jobs promise was fulfilled, the city of New York would get ~3.8% of $150k * 25k jobs = ~$142.5 million/year once the 25k job mark is reached [2].
[1]: Note how the 6.85% bracket only applies to income above $215.4k; income above $1.08 million gets taxed at 8.82%; consequently Amazon will get more rebated than employees paid in income tax the vast majority of the time. See the second table of page 57: https://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=...
From a taxation perspective, that would be even better for the state, because on average a person making $1m/yr + 9 making $55k has a higher marginal tax rate than 10 people making $150k
Property tax reform could work for single family homes if we decoupled property tax from land tax. NYS should only raise taxes on the value of land given the surrounding population density, natural properties and accessibility to public infrastructure. Check out some Henry George, if you're interested in learning more.
I didn't read Henry George, whoever that is, I'm reading you right now. Are you suggesting to tax a single family home the same as a six, if they take up the same amount of space?
What happens if someone has owned the home for 60 years, they're older and retired, and suddenly it so happens their neighborhood got popular a decade ago and their property values doubled, and some rezoning happened at a nearby avenue. That's one example. How about we try the academic flirtations with tax experiments at a smaller scale elsewhere, first?
NYS grossly favours SFHs for property taxes. For example, a $3m brownstone in Park Slope I saw had ~$700/month in property taxes. A similarly priced apartment would have more like $1500-2000/month taxes. A $100m apartment would be taxed at ~$15k/month.
The Park Slope home you had was probably newly renovated. That matters - the sale price doesn't. 700 is even a lot, relatively speaking. In any case, houses from the 19th century cost money to maintain, and sometimes, shockingly, they're populated by people who can't afford 1k a month in property tax. The property values went up high and fast - are we going to punish homeowners for that? This isn't a suburb where taxes must come primarily from property tax - there's a NYC-specific income tax, as you're probably well aware.
Then, here's something else, tax those 2,3,4-families more, rents will go up as a result; they're free-market rate apartments, not rent stabilized.
I don't know what any of this has to do with Amazon, though.
NYC has on several occasions tried to introduce congestion pricing on people driving in or into Manhattan (something I 100% support) but the efforts have failed as this is the jurisdiction of NYS and NYS has no interest in this (so far).
They introduced it - it just impacts taxis and for-hire vehicles.
Note: if you look into this a lot of condos have deceptively low monthly taxes due to a tax scheme (now defunct) called J-51 (IIRC) where property taxes started at 0 and would go to normal levels over 20-30 years.
That's absolutely insane. So we get oligarchs and tyrants buying up property in NYC to launder their ill gotten gains and paying little to no property tax on it!
Oligarchs and tyrants buy condos in the sky more than brownstones someplace. And 3M isn't a huge amount for a three family home near public transportation, especially a home from the late 1800's that's attached to other homes and with thousands of dollars a year in upkeep. There's an even more important reason for taxes targeting condos more than the older buildings: rental buildings (like a 3 or 4 family brownstone) have renters, and higher taxes would mean higher rents.
All that said, if you build a brand new single or multi-family home someplace, anyplace, the taxes will be pretty high. It's all about the grandfathering of older asessments and a state cap on tax rate increases (20% a year I believe), which is allowed an adjustment if renovation is done (or a fresh assessment if it's new).
A clarification: NYC didn't offer Amazon subsidies. New York State did. That's really the core of the tension - the whole deal was negotiated in secret then announced to the world as a finished product. That tends not to earn you goodwill with city politicians you deliberately excluded from the process.
My understanding was that Amazon was intending to use existing city programs to fund $1.3B of the $3B in incentives, most of that tied to the number of employees they hire to work in specific zones including LIC [1].
Why do they have to involve the city politicians in the decision-making process if they don't need any special treatment?
[1] "While New York City has not offered Amazon any direct subsidies, the company also plans to take advantage of two city tax breaks that will further sweeten the deal by nearly $1.3 billion.
One is the Relocation and Employment Assistance Program, which offers businesses moving to certain parts of the city a tax credit of up to $3,000 per employee for 12 years. The program will benefit Amazon to the tune of $897 million, Gov. Andrew Cuomo said.
The other is the Industrial & Commercial Abatement Program, which provides property tax abatements. It will be worth nearly $400 million to Amazon, Cuomo said."
As an NYC resident I'm glad my elected officials are "butt hurt" at not being involved in a political process that would affect the city in a large way. If they weren't "butt hurt" they really shouldn't be in their jobs.
I am also an NYC resident and followed this story closely. There was an immediate, knee-jerk reaction from local politicians when the announcement was made, often in the form of protests with plenty of photo ops. It was not about how to work with Amazon and the community to create something that works for everyone. Instead, their message was "WE DON'T WANT THIS, GET OUT NOW!"
At the end of the day, this city needs to curb its reliance on finance jobs. Adding 25k tech workers would be a major step forward to making NY more of a tech hub than it is today. Kicking out Amazon sends a message to other large companies who are thinking about NYC -- buyer beware.
as a New Yorker (1.5 hr drive from Manhattan) this makes me sad.
while there is a low chance I would have worked there I was considering the potential reality of trying it out for a few months and see what their telework policy is (I am currently 99.5% remote)
I was excited about this. I think NYC is losing out in the long run on development/income/more transactions of all kinds which in general is good for the economy.
NYC by virtue of political clout gets to meddle in all sorts of issues that affect upstate and warp them for it's own benefit. This time the state cut a deal that NYC wasn't in on and NYC didn't like it but at the end of the day it's still getting what it wants.
Having self government on a local level but then getting constantly steamrolled by a state government that is dominated by some other city really sucks. NYC (and Boston, and Chicago, and a whole load of other cities that dominate their state government) should try it sometime.
On one hand I'm annoyed that an opportunity for part of NYC to feel what that's like was missed by this > < much.
On the other hand the deal that NYS cut with Amazon was a boondoggle load of crap that set a terrible precedent so I'm glad it's not happening.
I assure you, we know exactly what that is like when we watch things like MTA funds being reassigned to save upstate ski resorts. And gobs and gobs of money being spent on the East Side Access train tunnel, at the expense of our failing subway system.
New York State has plenty of control over things that matter to the city, and doesn't hesitate to prioritize state concerns.
Thats been common lingo since I was a kid. It implies a specific jealousy based stubbornness, similar to sour grapes, but with an asinine element. I dont see your problem and think it is rude to police language.
what? I didn't justify it at all. Of course we're not in high school and no it shouldn't be used on this site. just pointing out how it has nothing to do with 4chan and that its just a childish insult.
Yeah, completely sidestepping your largest municipal government (and country's largest for that matter) and negotiating a secret deal with a private company should be completely fine and doesn't shit all over federalism in the slightest!
I think NYC (or SF or any high cost of living area) is a crazy place to put HQ2. In terms of subsidies, while it's easy to dunk on Amazon, and no business should be getting subsidies IMO, there is a real issue here:
Cost of Living in NY is higher and Amazon will have to pay higher wages if it puts jobs there rather than a place like Nashville. That's higher wages for the same job. Pretty much every company has a cost of living multiplier and pays different wages for the same position based on where you live. So given that Amazon has a choice to locate in the low wage or high wage area, it seems reasonable for the high wage area to offer to offset some of those extra costs. Otherwise why would AMZN even consider a high cost of living area like NYC?
Now to me it's clear that the market signal is that they should open the new office in a lower cost of living area, which is what's going to happen now. A small victory for reason. This means more Amazon workers will be able to afford to buy a house and Amazon will be able to pay them less. Good news.
There's a reason you get superstar hubs, instead of companies and employees equalizing to somewhere else as soon as one metro gets a bit more expensive. Network/ecosystem effects are a real thing.
Google already has some dev offices in cheaper areas, like Pittsburgh, where office space is cheaper and the salaries they pay slightly lower. And yet, they still choose to double their headcount in NYC.
Just saying, "well I guess Google is just being irrational for no reason" would be simplistic, childish thinking. Google doesn't choose sites or increase headcount on a whim. They're going to do it because there are real advantages to the major tech hubs.
Educated guess, as someone who works at Google now and used to work at Amazon: it's easier to attract people to major tech hubs, because they offer more career stability in the form of having lots of other tech companies around. Being in Kansas City making a Google salary might sound great, until you realize that if you lost that job for some reason, there's nothing around in the same tier.
Also, the kind of person who wants to live in a cheaper city, with a big house for their family, is also the kind of person who's going to be reluctant to move from wherever they currently live anyway. That demographic is going to be hard to convince.
There is another aspect of this which some younger people miss. A hub city means a dual professional couple can both find long term career paths in the same place. That’s much harder to do in a non-hub city. Top talent tends to marry top talent as per assortive mating.
> Google already has some dev offices in cheaper areas, like Pittsburgh, where office space is cheaper and the salaries they pay slightly lower. And yet, they still choose to double their headcount in NYC.
Location, Location, Location.
Yes it's cheaper to live and run a business in Kansas but then you're in Kansas.
I don't want to tell you what the right trade offs are between, say, living in Phoenix or Dallas or Charleston and living in NY or SF.
But at some point people want to start families and buy a house and that starts to take precedence over being in a cool area. The only issue is jobs -- can they work remote, can they find a local employer, can they work for themselves?
So there is a huge demand for higher paying jobs in lower cost areas compared to the demand for higher paying jobs in higher cost areas. You personally may think it unbearable to live in Scottsdale, AZ or Minneapolis, MN, but most people find it pleasant enough and will pull the trigger as soon as they can find a job that pays even 2/3 of what they are earning in SF or NY.
Others want to just stay in an exciting, vibrant area. You're projecting your values here.
> will pull the trigger as soon as they can find a job that pays even 2/3 of what they are earning in SF or NY.
The very fact that such jobs are somewhat uncommon, even though programming ought to be the kind of thing that's easy to distribute/make remote, should tell you something.
>So there is a huge demand for higher paying jobs in lower cost areas compared to the demand for higher paying jobs in higher cost areas
NYC is the most populated and density populated city in the country, which is just another way of saying its the city with the highest demand. If most people rather work and live in Scottsdale than that would be the most populated and density populated city in the country.
Why is that hard to believe? More people may say they want to Malibu than Detroit but until they do it doesn't matter. I would love to have a Tesla but dreams don't count as demand.
Right. So, you see what I'm saying is that "demand" refers to a curve. And at any given price, there is a quantity on this curve.
So, take city A - where house prices cost, $100 and it has 100,000 people. In City B, house prices cost $500 and it only has 10,000 people.
You still don't see the full demand curve for either city. The statement "City A is in more demand than City B" is not a meaningful statement. That's what I was trying to say. I was trying to point out the absurdity of just counting people as a way of inferring the shape of a curve.
Now, how could your statement be changed to make it well defined? You could say "At every price point, City A will have more people than City B". Which means the curve of demand for A is above the curve of demand for B. But is that really true for NY? I doubt it. Maybe, but you'd need to provide some other evidence. And such evidence is hard to find, because NYC is a donor city -- more people move out every year than move in.
The only reason why NYC's total population is growing is because births outpace deaths and it is a port city for new immigrants. But for US-US transfers, it's shrinking by about 2% each year. So at least in the universe of US cities, people tend to choose to live elsewhere.
But that doesn't mean that NYC is a bad city. It most likely means that it's a little out of equilibrium -- most likely because of the influx of immigrants. E.g. you can imagine that existing New Yorkers have some equilibrium price, and then an increase of immigrants raises that a bit, so that some of the non-immigrants leave. This is true in general of port cities: you see an influx from outside the city that pushes a certain number of the people inside out.
Now are these immigrants coming to NY because they prefer it to Phoenix or whatever? No, they are coming to NY because it's a port of entry and because they have relatives there. Immigrants tend to cluster and stay put, which is a shame, because most would be better off living elsewhere, just because they tend to cluster in ghettoes in high cost areas. That's a whole other interesting effect -- why immigrants tend to stop at the first place they land and stay there.
How else could your statement be changed to make it well defined? Well, you can say that real estate prices are really high in New York, meaning that overall it is in great demand compared to other cities where real estate prices are cheaper. This is, I think, your strongest argument. Except there are a lot of factors that affect real estate prices -- including zoning restrictions, prop 13, and most importantly # of high paying jobs, etc. For NY, that would be Wall St jobs or FIRE more generally. Now you could argue that NY has so many Wall St jobs because it's great, but we both know better. There are historical reasons for these types of agglomeration effects that are kinda arbitrary and in the case of NY go way, way back. Even in the period of white flight when NY was dangerous as hell and half empty you had all those Wall St jobs concentrated there.
So, bottom line, it's really hard to infer preferences from the data you are citing and even from the better arguments you could have made but chose not to.
Honestly, I think you are not capturing the trade offs here correctly. There is some value to being in a hub, but not infinite value. For example a start up gains a lot more benefit from being in Silicon Valley than a company with 10,000 developers. The startup needs access to VCs, and it needs to hire superstar programmers.
Once a company reaches critical mass, it doesn't need access to VCs, and isn't able to hire superstar programmers at scale, so the quality of the average employee declines compared to what you see in startups. Now you start talking more about repeatable, workman-like code rather than brilliant groundbreaking code. You can still do the latter in a research center that you can keep in the hub and move a lot of the other code to the periphery, which will be most of your employees. After all, we are talking about HQ2 here.
At the same time, you have housing markets that are so insane that the majority of your developers will not be able to buy a house, which means they are going to leave you or demand really high wages -- wages that a company with 20K devs can't afford.
This is the inexorable logic of the market. Suppose we are not talking about people but some other scarce resource. Very expensive leather. You put that into the exotic cars but when you need to produce in high volume, you look for cheaper substitutes in order to help scale your operations. Everyone likes to think they are rockstar developers, but your typical AMZN HQ2 employee is not a rockstar, they are probably just a decent programmer (Not that there's anything wrong with that :P ). It just doesn't make sense to put HQ2 into a place where you have to pay 200K to win over the marginal employee.
> For example a start up gains a lot more benefit from being in Silicon Valley than a company with 10,000 developers.
No, I'd say they have about equal value. Consider, Google has tens of thousands of tech workers in the bay area. How many other metros could they feasibly relocate their HQ to? Even if you assume that only, say, a third of their employees decline to relocate with them, you're possibly looking at ~10,000 job openings you'd need to staff up on within a year or two to not be absolutely crippling.
> You can still do the latter in a research center that you can keep in the hub and move a lot of the other code to the periphery, which will be most of your employees.
This completely glosses over how companies work. Google doesn't have two tiers of software engineer types, where one gets more exciting stuff and better pay/benefits, while the other languishes on boring things with mediocre pay. Trying to split up the company that way, "we'll just hire crappier engineers in [cheap place] now and treat them worse because they're dumber" would be a total disaster.
> you have housing markets that are so insane that the majority of your developers will not be able to buy a house, which means they are going to leave you or demand really high wages -- wages that a company with 20K devs can't afford.
While this is absolutely a problem, and I applaud efforts to increase affordability either in the areas where tech HQ's already are, or by distributing more offices elsewhere, you're missing the obvious fact that these major tech companies already do this, and it already works. Yes, some people leave. The strongest, and probably most valuable employees largely don't, because they make enough to offset the increased cost of housing: a T6 at Google may make 400-500k/year.
As an outsider (to both Amazon and NYC), I always assumed NYC's motivation was wanting to diversify its industry.
Right now it seems heavy in the financial sector to me. Arguably tech is a big part of the economic future, so one view is that it would be smart to have some of that.
It's my understanding that while NYC isn't really a tech hub, the startup / tech scene there has grown stronger in recent years. So I pretty much assumed they were trying to capitalize on this momentum and do a big push to achieve something like critical mass.
Whether that's a worthy goal is very much for debate, but it seemed like that's what they thought they were getting in exchange for the sweet deal they were offering.
The subsidies were very contingent on Amazon delivering all of their promised uplift. But I think people scoffed at the top-line best case subsidies.
I forget where, but I remember seeing someone dig into the details of the offer and Amazon was not actually getting that much better of a deal than any other NYC business.
They were getting very near the same deal that any other company can get through a common tax-reduction program in NY. The difference was scale: 25k jobs was vastly, vastly more than any other company had used for this.
The sheer number of people from NY saying they are "proud" of this shows just how far removed people are from reality.
If this is true (I don't know either way, I've only followed this casually), why go through the whole dog and pony show in the first place? In that case, Amazon seems to have shot themselves in the foot here by playing a carnival game with the campus selection process. They gave everyone the _appearance_ that they got a sweetheart deal while basically not getting anything special?
and wasted the time and resources of tons of municipalities across the country who placed a bid on HQ2 with the false impression that they had a shot at winning it.
There are plenty of valid reasons why people who live in NY would not want Amazon dropping in - to say that they're removed from reality demonstrates quite a lack of empathy. Rents going up, people being displaced, an area that traditionally has fewer high income people all getting pushed out. People are still reeling from the push of affordability out of Brooklyn; now Bed-Stuy even is getting heavily gentrified. To many people, its a complete net negative for a tech company to move in - those who can't take advantage of it.
Honestly I'm surprised that so many people have come out against this, but no one seems to care about the Excelsior job program in general. I haven't even seen a person suggest that the program should be amended to preclude a company like Amazon from using it.
They didn't. NY State offers a 'package' to all companies that move in. That's all they really got in terms of tax breaks. NYC only allowed it to bypass some building reviews/regulations.
Stupid as the subsidies were your attitude is vile. We have a technology for increasing housing, they’re called apartments. New York does not lack space, it lacks enough housing. If this kind of crap goes on New York will get as bad as California where every municipality wants to build offices and nowhere wants to build housing.
This delight in pulling up the ladder after you and making it harder for people to get jobs is odious.
What are you talking about? In my area of downtown Brooklyn there's a glut of luxury residential towers recently completed or still going up. As far as I know there's so much supply now that prices are actually decreasing, but again this is a decrease on luxury apartments so whether it's $4400 a month for a two bedroom, or $4000 a month, that's not very helpful to most people. What we need are new non-luxury buildings where normal middle-income earners can afford to live (ex. $2000 for a 2 bedroom). Amazon would've just led to the filling of luxury towers in LIC and encourage developers to build even more luxury towers for the new Amazon transplants.
So if anything, Amazon will make the market worse for all other companies by sucking up a lot of the talent and causing a rise in wages. It might be good short term for software devs, but like Seattle and The Valley, it hurts absolutely every other industry. The person in your IGA or Starbucks often has to commute via bus or train or (god forbid) car over an hour out just so they can afford to barely make it, while tech people can pay the $2k ~ $4k a month for a 1 bedroom within 15 minutes of work.
Highly-paid professionals need service people, so bringing more of them into your city creates more demand for other careers to support them.
If there isn't enough affordable housing for those lower-paid people, that's a failure by the local politicians. Don't blame the highly-paid professionals; they're not the ones controlling zoning and development.
I think most people on this thread are in agreement. It's not the tech people who are "to blame", it's the companies and politicians for not developing a sustainable growth strategy that includes housing for all the jobs that support those tech workers.
Suddenly bringing in 25k high paid workers without a concrete plan on how to support that growth (including not giving gigantic tax breaks which would impact the necessary schools/police/transportation/etc of the area) is the root cause of the housing and traffic issues in Silicon Valley. I think local politicians are becoming a bit wiser to that kind of thing after seeing how gentrification is causing issues in other cities. NYC local politicians are probably the most aware, given NYC's history.
There's nothing "sudden", however. These housing problems in major metro areas have been going on for a long time, and there hasn't been any action at all to rectify it. No one's building good, affordable housing at a proper density anywhere, as far as I can tell.
Google didn't need any dog and pony show or significant forms of corporate welfare (that we know of) to announce a doubling of their presence in New York.
Exactly. The 25k number was just to make a splash and notice they aren't doing that again. Because there aren't really any other areas that could give them 25k skilled employees. They will scale up in Nashville which is expected since it is a growing area, and they will still be in NY due to the talent. The "HQ2" show was primarily to extract large concessions which almost worked. My initial reaction as a NY'er was "well that didn't go well" but now I think it was great that we did not fall for it.
I don't even think they're really gonna scale up in Nashville. At least not in any meaningful way. 10 years from now, both Amazon and Google will have right around 25 thousand workers each in NYC.
The reality is that NYC is not Wisconsin, they don't need to give out money.
EDIT: I'd even go a step further, and predict that both Amazon and Google will also have ludicrously large presences in the DC-NOVA area in 10 years as well. In fact, Amazon's presence in the DC-NOVA area will be even bigger than they initially said it would.
Wisconsin doesn't need to give out money, either. If anything, they need to not give out money.
The story of the Foxconn factory, for example, is one of Wisconsin acting as if you can give a bunch of money to a company that smells of technology, and they will plunk a bunch of jobs for highly educated and skilled people in the middle of a region with relatively few highly educated and skilled workers. Which, it never worked that way. It never will work that way.
Companies go to places that can fill their staffing needs. Wisconsin, which has been systematically defunding its education system in order to re-route that money toward corporate subsidies, is undercutting its own ability to fill those staffing needs. I don't know that everyone in the state realizes it, but Wisconsin is stumbling all over itself to become the darling dumping ground for companies that are founded[1] in cities and states with the kinds of intellectual and entrepreneurial ferments you get around well-run and well-funded university systems to put their call centers, distribution centers, big boxes mostly full of robots, and other things they don't want to waste money putting in a more affluent area.
[1] I think "founded" is a key word, here, too. Supporting local entrepreneurship is the key to prosperity. Which mostly means getting out of the way of your entrepreneurs. If you get into a bidding wars to acquire the office where a company puts all their jobs that didn't merit being located at HQ, not only do you end up overspending - the people deciding what to bid aren't playing with their own money, so what else did you expect? - but you're also draining the talent pool that supports their growth.
Kentucky was a perfect example of this. They gave the best corporate welfare money can buy. And everyone left. There were no decent roads, schools, police. So there were no decent workers. The companies were basically given the best deal in a place with no workers.
If anything the workers left even more because there was even less attractiveness to be there.
Its really hard to make a thoughtful reply to a thread like this without seeming like its just ivory tower dumping on red states. My feeling is that they've set up a basically every person for himself sort of society with (usually multinational or national) businesses as the primary benefactor rather than people.
If you keep participating in the race to the bottom, you eventually end up on the bottom. The belief that any price in tax cuts will benefit your citizens in the form of "jobs" is a particularly toxic form of economic fundamentalism, and its hollowing whole states out.
Totally agree. In my neck of the woods one county nearly bankrupted a neighboring one by offering an existing business a deal that led them to move a few miles away. The old county was stuck with sewer bonds and other costs while the revenue vaporized.
It’s difficult though as it’s a prisoner’s dilemma type situation.
Yes and no. I believe in this case they had an obligation to provide the sewer, and water/sewer ratepayers are responsible for costs. You can’t make an individual ratepayer responsible for the sewer.
Definitely a bad situation and a story told a thousand times in the US
Living in the DC-NOVA area, Amazon coming here seemed rather inevitable. There's a confluence of infrastructure, cheap office/datacenter space, and a stealthily growing engineering talent pool that Boeing, Lockheed, Raytheon and the general smorgasbord of government contractors have built up over the years.
Additionally,it wouldn't surprise me if Amazon has seen the obscene amounts of money Microsoft is making pitching cloud security and general technical support to the government, and wants in on it.
I don’t know, cities rise and fall at lot more quickly than it feels like at the time.
New York City was on the verge of bankruptcy in 1975, less than 50 years ago.
Detroit’s population started declining as early as the 1950s as companies moved to the suburbs.
New York has a world-class, diverse economy, and I expect it to continue to be a central engine of the American and world economy for our lifetimes, but it does require good stewardship to nurture the economy.
We may be on the cusp of a reversal of the great urban migration of the last several decades, with populations moving into suburban satellite cities as remote work gains acceptance, driverless cars allow for easier commutes, logistics companies and drones allow for easy delivery of goods to your doorstep, and urban housing prices continue to relentlessly outpace wage growth.
There's absolutely no way they are scaling up NY to the same degree they would have with the subsidies. There's no reason to. The value proposition is gone, so now Amazon will slow-roll growth in NY like they will any other office.
The fact that you (and many others) consider this a win is an attempt to revise history. This tax deal was all about Amazon expanding very quickly. That deal is gone. But feel free to pat yourself on the back for not "falling for it". Maybe it works out great as other companies will lease those buildings and hire a combined ~20k employees averaging $150,000 in compensation, but that's likely not going to happen.
In this context, they're referring to the actions of NY (not the comment they're replying to), and TBH, there's nothing personally acidic; it's just a saying.
I was referring to feel free to pat yourself on the back for not "falling for it", which was a gratuitous bit of personal sarcasm, just the sort of thing which acidifies online discourse. Also, arguably, the bit about an attempt to revise history is an uncharitable escalation (though not personal).
It erodes discussion by slowly acidifying it. It's not that the remark was so bad in itself—it's that these effects compound, and if we allow them to compound very much, the problem will no longer be fixable. That's why we often ask people not to do this, even when they only did it a little.
I agree with Dan, and I wouldn't have commented had I not read this comment. It's easy to underestimate the happy-but-silent majority.
Dan was spot on when saying that this acidity compounds. It leads to a vicious circle of increasingly hostile comments unless someone decides to be the bigger person and break the chain. Having a neutral third party step in to play this role (i.e. a moderator) makes this chain-breaking far more likely and works to all of our benefit.
I don't see votes as useful signal on Hacker News: for example, during the course of some comments I make, the vote starts out as very negative (from people who skim the comment and think it's insulting) to very positive (from people who read it more carefully and realize it's insightful). So there is a temporal aspect to votes (I'm sure you know more about this than me).A
And often when I get votes, there's no signal whether it's due to tone, or content, or whether it's because I'm expressing something that is true, but makes people feel sad (seems to happen a lot, makes no sense to me).
While parent (and others) may be attempting to revise history, I think this outcome is probably for the best.
Whatever growth occurs in NY will be organic. Not government-subsidized hyper-growth which can throw things out of whack.
Real growth brings with it real increases in public funding, that can be used to fund real increases in infrastructure demands and demands on other public services.
When a local government has to bribe their way into increasing local business, they tip the scales in favor of one thing (i.e. jobs) while burdening other things (tax base, transit support, etc.)
When companies choose to do business in your area—because it's naturally the best place for them—it functions as a market verification that you're doing something right.
> Whatever growth occurs in NY will be organic. Not government-subsidized hyper-growth which can throw things out of whack.
It's not going to be organic. Instead, these same deals are going to be spread out to a bunch of other companies, most of which will pay less than Amazon on average and the "subsidies" will take longer to be a net positive.
Again, people confuse bribes with standard deals. Any company is eligible to receive the tax breaks that Amazon was going to. So New Yorkers have really "won" here. Same subsidies paid out to lower paying companies at a significant slower scale and significantly less economic upside.
> It's not going to be organic. Instead, these same deals are going to be spread out to a bunch of other companies, most of which will pay less than Amazon on average and the "subsidies" will take longer to be a net positive.
Only if you assume those other companies collectively hold the same bargaining power that Amazon did, which is an assumption I can't agree with
Man... the misinformation is so stunning. They don't NEED bargaining power because these tax deals were done through programs that already existed in New York. The overwhelming majority of the money involved in this requires you only meet the eligibility requirements.
The biggest aspect of this deal for Amazon was reduced regulatory burden. That was Amazon's actual goal here, the tax offsets were just the icing that every company is going to end up getting by making a major move like this.
Then why has Google announced a major expansion in New York City without making a show out of it? Did anyone protest about Google adding more than 7,000 jobs to the area? Amazon has clearly failed here to offer something everyone would be happy about.
> There's no way to turn this into a positive here.
I dunno. It seems like an unambiguous positive to me. The giveaway to Amazon was enormous -- so much so that it seems extremely dubious that New York would ever have been able to recoup that money, let alone increase it.
If they were going to buy the card for $30K anyway if you didn't discount it, yes. Even if they weren't going to buy the car without the discount, but someone else would likely come along and buy it for $30K, then still yes, you would have given away $5K.
Add on to the fact that if you sold that one car for $25K, you end up with other people who would've paid $30K but now want that same discount, so you may have given away a lot more than $5K.
>There's no way to turn this into a positive here.
Well, if you believe Amazon coming to NY was good, it's no more negative or positive than me not winning the lottery today, and I didn't buy a ticket either.
>Real growth brings with it real increases in public funding, that can be used to fund real increases in infrastructure demands and demands on other public services...
This.
That's exactly why what's now going to happen in NYC is what should happen in all cases. Wish we could get this going in Wisconsin.
If it was primarily a deal to ease the regulatory burden of building such a big thing, I'd be all for it. Admittedly NY has an issue now with too many layers of bureaucracy. But this isn't entirely what it is about. It was also about large tax concessions when plenty of large companies are hiring tech in NYC without any of them. A skilled employee in NYC does not last very long at all on the job market. The 25k employee campus thing was a sham that was geared to an area like NY from the start. They could never move to a smaller area and still get who they need at that scale.
The commodity these days is skilled workforce. Amazon will still be where they can get that commodity, economic incentives aren't needed. Cash is not the limiting factor it is the people they need. It was a smart business move to try to extract some cash too but they did not need that to expand in NY.
Ugh... any company moving into NY can get these same large tax concessions. Amazon got nothing special outside of reduced regulatory burden. Why is this not understood? This same subsidy is now going to go to 15 companies who all probably pay less on average than Amazon.
There are skilled workforces outside of NY, believe it or not. And they aren't going to go through the regulatory burdens to expand NY to a major campus, since that's really what this was about.
To be clear, since this point is being missed by so many people: This wasn't a special deal outside of the reduced regulatory burden. Any company that meets the eligibility requirements will get these exact same "subsidies".
What happened here is a bunch of local politicians and local people who are absolutely clueless about how corporate tax reductions work pushed against something that's still going to happen just, at least potentially, not with a high paying company like Amazon.
Not many corporations I know of get a deal brokered by the mayor and governor privately with multibillion dollar cut after a large spectacle. I realize you might think differently as an Amazon employee.
Are you aware that there are existing tax programs in NYC, and that most of the money "given" to Amazon came from those existing programs that are available to anyone who qualify?
I see what you're saying, but Amazon pretty much did that to themselves by making the whole thing such a public spectacle. Whether or not they were offered a special deal, that's the impression everyone got, and it should have been predictable that they'd provoke a lot more political backlash with this approach.
>"Ugh... any company moving into NY can get these same large tax concessions."
Really? Let look at what was offered:
1 $897 million from the city’s Relocation and Employment Assistance Program (REAP) and
2 $386 million from the Industrial & Commercial Abatement Program (ICAP)
3 $1.2 billion in “Excelsior” credits
4 $505 million in a capital grant
Yes the first 3 are existing programs. But the idea that those sums or anything remotely close to them would simply be made available to any company moving to NY is comical at best. Now lets look at number 4, a 505 million dollar capital grant. That's a pure giveaway compliment of the tax payer. And let's remember that both the city and state governments put together dedicated teams to find this money for Amazon. This was in addition to the work the city and state did for give Amazon data, such as "detailed information on the availability of machine-learning specialists, user-experience designers and hardware engineers."[1]
There is no way any of this is available to "any company moving to NY."
> Yes the first 3 are existing programs. But the idea that those sums or anything remotely close to them would simply be made available to any company moving to NY is comical at best.
> $897 million from the city’s Relocation and Employment Assistance Program (REAP)
That works out to $35,880 per employee that Amazon promised. Per the REAP program website[1], the credits available are $3000 per employee for 12 years. That actually works out to slightly more per employee ($36,000). So yes, any company not currently in NYC that creates 25,000 jobs in one of the designated areas would get the $897MM in benefits.
> $386 million from the Industrial & Commercial Abatement Program (ICAP)
ICAP is a property tax abatement available to any company willing to redevelop qualifying properties[2]. The value of the abatement is based on the final value of the property and which benefit schedule[3] it qualifies for. Any company willing to put in the same amount of redevelopment in one of the designated areas as Amazon was will get the same abatement value.
> $1.2 billion in “Excelsior” credits
I don't have the time at the moment to calculate how this was arrived at, but looking at the overview of credits available[4] it appears to follow similar formulas as the NYC programs.
In short, I do not see it as "comical" by any measure that any company offering to create 25,000 new jobs and redevelop hundreds of millions of dollars worth of property in designated areas would get these same values. Amazon didn't get these numbers because they were Amazon, but because of the scale of what they proposed to do. Whether that is a good idea to offer to any company is open for debate.
It looks like you left out the 505 million dollar capital grant part.
>"In short, I do not see it as "comical" by any measure that any company offering to create 25,000 new jobs and redevelop hundreds of millions of dollars worth of property in designated areas "
It sounds like you aren't familiar with NYC. Long Island City has long since been "developed." That building boom started 18 years ago. The volume and velocity of luxury high rises appearing across the East River has been incredible. LIC does not need to be "redeveloped" nor is it some basket case "designated" area that requires incentives and credits to build there.
> To be clear, since this point is being missed by so many people: This wasn't a special deal outside of the reduced regulatory burden. Any company that meets the eligibility requirements will get these exact same "subsidies".
You seem to have no understanding of local culture or the present state of Manhattan and Brooklyn as already massively gutted by wealthy transplants. Ask the majority of people who grew up in San Francisco and Seattle. This is a win. You also seem to have little understanding of the current situation of the NYC subway system infrastructure. You could argue Amazon’s workforce would have forced improvements, except this hasn’t happened in decades despite the increasing wealth and foreign investors here. Just read about Cuomo using $5mil of MTA to bail upstate ski resorts three years prior.
> There's absolutely no way they are scaling up NY to the same degree they would have with the subsidies. There's no reason to.
There's now way to. Campus expansions are blocked by layers and layers of NIMBYs. The big selling point of the deal was the state government ensuring Amazon would have a campus that could hold 25,000 people.
> This tax deal was all about Amazon expanding very quickly.
Anybody who thinks that through should see why it's such a terrible idea. Not even NY can "very quickly" absorb 25k people in a small area without screwing up quality of life for the people who already live there. That's a great way to make real estate prices sky rocket and screw over the existing residents. And it'll completely screw up infrastructure and transportation, because there's not enough money to pay for them when the company causing the issues is getting a huge tax break and not paying their fair share, and they're not things that can be fixed quickly in any case.
> Maybe it works out great as other companies will lease those buildings and hire a combined ~20k employees averaging $150,000 in compensation, but that's likely not going to happen.
If the current residents are qualified for $150k a year jobs then they presumably already have one - it's not like there are 25k unemployed software devs waiting around for companies to move to NY.
That whole competition was a shameful money grab by Amazon and I'm glad it didn't work out for them.
This was over a 10 year period. New York City would have absorbed this just fine. Population projections for the city over that same time span is an additional 600,000 people.
The "small area" that Amazon was relocating to (Queens) is expected to get 150,000 of those people. And we can ignore the assumption that people making 150k a year all want to live in Queens (or LIC) and not Manhattan.
You're vastly overstating the effects of 25k people in a metro area that's >20M people strong. You're taking for granted that all of those people are going to live in a few blocks radius in LIC, and that's simply not close to what would've actually happened.
New York City has no current shortage of jobs or growth. Incentives aren’t needed. If they wanted to offer incentives for companies to move to Buffalo, it might be worth it. But NYC will be fine without it.
Most companies are eligible for the same incentives. These tax deals will still happen, but they will be for lower paying jobs. Just read the press release at the very least. These are programs that existed before Amazon announced anything.
This is nonsense. I can't say that an enormous giveaway of public funds to attempt to buy jobs is categorically a bad idea in every situation, but if every one I can think of, and certainly this one, it is.
It is also amusing that you consider Amazon's assertion about the job count an iron truth of what would have happened. While Amazon does not have Foxconn's long history of scamming municipalities, there is also no reason to weight their words any higher than other companies who have played this game in the past, and the odds look significantly worse than a sure thing viewed that way.
Finally, the way you win these games is not to play, no different than the continual sports stadium scams or other "let's you and him fight" grifts.
Amazon is notorious for paying pennies. 25k jobs paying 150k on average is a pipe dream. ask whole foods delivery people for Amazon fresh or whatever its called. they are counting their pay including $5 mandatory tip they collect from customers.
First of all, these jobs were all white collar. Amazon's current new grad SDE's in NY and SF both have more than $150k in comp. New grads.
Second, the food delivery people for Amazon Fresh are employees of Amazon. The Amazon Flex drivers is what you are talking about, and there is no "mandatory" tip for that service. What you're talking about is something Instacart and DoorDash was doing. Those are entirely different companies.
The information in the second and third paragraphs is great, but it's being downvoted because the first sentence is unnecessarily antagonistic. HN has succeeded as a place for productive discussion for as long as it has because it still has an ethos of a joining together in a search for the truth. Prefacing a good comment with an insult (even one that might be true) damages the fragile ecosystem of cooperation. It's not that this particular insult is so bad on its own, but its presence encourages others to reply with escalated levels of confrontation. Downvotes help prevent the incivility from spiraling out of control.
>"The value proposition is gone, so now Amazon will slow-roll growth in NY like they will any other office."
So the "value proposition" had nothing to do with access to a talent pool of qualified candidates to fill those 25K jobs? Because that would be odds with the reasons Google, FB et al have set up shop in NYC.
>"This tax deal was all about Amazon expanding very quickly."
Yet there was never any specifics of when Amazon would arrive at that mythical 25K job number. The closest you can find to any time qualification is the phrase "within a decade." I guess you have a very different idea of "quickly."
>"The fact that you (and many others) consider this a win is an attempt to revise history."
No the "win" here is not giving out corporate subsidies, more especially to a company that absolutely does not need it. NYC will be just fine without Amazon. There is no shortage of tech jobs in NYC these days. It been that way for over 10 years now.
What if another state gave the concessions, and then it worked out spectacularly for them, completely reviving a city and building up a new ecosystem that funnels in new wealth and new money. Would NY be kicking itself then?
No because NYC doesn't need Amazon to be a large, thriving city with all the agglomeration benefits large cities have. Because it already has all those things. Amazon arguably needed NYC more than NYC needed Amazon.
On the other hand, smaller, not thriving cities may have indeed benefited from attracting an Amazon. But it's a bigger debate whether they would benefit more than the cost they might've had to pay to attract an Amazon.
Do we even have an example on record of a state or city making huge concessions to attract a company and it "completely reviving a city and building up a new ecosystem that funnels in new wealth and new money"?
Take Columbus, one of the other contenders for Amazon's bachelor-like charade, with 850,000 people living there. 25k jobs would have been a bigger deal. If you compare 25k jobs to NYC's population of over 8 million, it would be proportional to adding ~2.5k jobs to Columbus, not all of which are tech workers making 6 figures. It's a drop in the bucket for NYC, especially considering Amazon already has thousands of workers in NY and will likely reach that 25k figure in time without needing billions in concessions.
That's income per capita, which is a little bit different than wealth.
There is no place, in the US, that rivals the wealth and power of NYC. Now internationally, that's where you start to get your Beijing's, and your London's, and your Tokyo's, and your Monte Carlo's, and your Paris, and Shanghai's etc. But in the US it's NYC at the center of the preponderance of wealth and power. Only place in a position to make a run at NYC is DC, and they'll need a lot more than Amazon to do it.
(There's also LA and Chicago, but those cities are not as "powerful", nowhere near as wealthy, and to be frank, making a run at NYC is not their ambition.)
111 8th is a major internet traffic exchange point. It's also gargantuan, it's 2.9 million square feet and occupies a whole city block.
One of the interesting things about 111 8th is that it was designed for much higher than normal pounds per square foot floor loading. Which means that Google could convert the entire thing to datacenter space if they really wanted to. Already a significant portion of it is conditioned datacenter/telecom space run by tenants.
These real estate acquisitions were so large that they explicitly needed to be called out on the quarterly earnings calls to explain why CapEx exploded for that quarter.
At Google's densities, they would never run a datacenter in Manhattan. POPs, sure, like their peering with https://www.peeringdb.com/fac/16, but that's it.
Internap has never really been relevant as a large scale colo/datacenter provider, if you look at the square footage of their facilities compared to major competition like Equinix and Digital Realty Trust.
I imagine they're getting decent bang for their buck when hiring in NYC. Really the COL adjusted wages in NYC are some of the lowest for all American tech cities.
Why would they care about getting a good bargain in “COL adjusted wages”? Even in NYC there is not a currency exchange Google can go to to turn $100k Florida dollars into $200k New York dollars.
How do actual numbers pale in comparison to a number that was nothing more than projected for some hazy undetermined future date? That 25K number was only ever qualified as "over the next decade."
Google on the other hand bought 111 8th ave 8 years ago(houses 7K employees) and now they are opening a new space in the same area that will house an additional 12K more employees[1]. That will bring their total to 19K employees in a 10 year time frame.
And this was all done without extracting corporate subsidies and without all the pageantry.
I think that 7K is just employees: "employs more than...". That is a deliberate distinction from "workers". I wouldn't be surprised if the count passed 10K once you considered contractors. They're mostly in non-engineering roles: cafe staff, recruiters, marketing, physical security (did those get converted to employees like they were doing in Mountain View?), facilities, etc.
It is in the Amazon statement: "There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams."
Disclaimer, I'm one of those 5k. Currently I work from home 99% of the time because the office spaces Amazon has in NY aren't fantastic. It would have been nice to have a new headquarters building, but I'll still be enjoying working from home now I guess.
> There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island
How many of those are working in tech? When I interviewed at Amazon NYC in 2016, I think there were only around 100 software engineers there. Has it grown a lot since then?
Thanks, I missed that (I stopped after a couple paragraphs). I did do a quick Google Search after I searched for how many Googlers are in NYC. (Was verifying there's actually 7K.)
It's pretty amazing how large some of the non-home offices are at these mega tech companies.
> Would be interesting to know how many employees Amazon currently has in NY. I wouldn't be surprised to find out it's already in the thousands.
Amazon already has an office in New York City, as well as a sizeable presence in New Jersey just outside the city limits (within commuting distance), split between two New Jersey offices, last I checked.
Uh, the statement itself says: "There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams."
Google's expansion doesn't require its employees to live in a part of the city that lacks adequate schools and parks. Whereas if you work in LIC it's not like you can really commute into the city from New Jersey or Stamford.
Maybe you should just permit people to say "what are you talking about" as a form of "you seem to be confused" instead of trying to dictate which colloquialisms people use to express themselves. Your position on this is overbearing and absurd. FYI you have a history of being condescending over nitpicky nonsense to the point of incivility.
I won't argue that it's appealing but it is the norm if you live in the burbs. Not many people work right next to Penn/Grand Central/Atlantic Terminal/etc. Transferring to the subway is very common, and LIC is one of the best-connected neighborhoods by subway (NRW7EFG).
Out of all those, only the E runs through Penn Station, and only the 7 runs through Grand Central. Nowhere near as nice as being table to take any ACE train or any 456 train to get where you're going.
And god help you the days there are mets games if you're taking the 7.
It has good subway connections to Queens and Manhattan, and that's about it. There's no good LIC LIRR station (the existing one is not located on the line to Penn). Good luck if you're coming from Westchester, New Jersey, Staten Island, or the Bronx, because that's going to be a hell of a commute.
LIC has some amazing parks. Stop by Socrates Sculpture Park sometime — really cool art installations, great waterfront views of Manhattan, across the street from a cool museum (Noguchi of the coffee table fame), and you are quick walk down Broadway to some great restaurants in Astoria.
But as a thought experiment, say they did create 25,000 jobs at an average salary of 100,000. What type of taxes and secondary effects on the economy does this have?
Does the city get back more than the 3 billion in concessions and how long does that take?
Looking at it from a strictly "benefit to government's tax coffers" standpoint (since that's the argument for the tax breaks):
Would those new Amazon jobs cause 25k people to move to NYC? Or is it more likely to just make the local market more competitive? How would other businesses react? Would they move? Embrace remote? If they increase salary across the board and live with unfilled positions, how does that affect tax revenue? Even if those people do move, how does that influx affect people with lower paying jobs? Will they be pushed out? How does that affect tax revenues?
Those are the kinds of questions I saw raised by opponents, and it seems like there weren't clear answers to them.
Google announcing they <WANT> to double their presence in New York is not the same as Amazon signing an agreement of understanding with the city and state.
Google hasn't committed to anything. Once it does, it will most likely seek the same tax benefits that Amazon did from the pre-existing programs if it qualifies
What are we discussing here? Yes, Google wants to hire more people in NYC.
In NYC there are are tax incentive plans for relocating and hiring that companies can apply for if they qualify. Just because Google doesn’t include that portion in their announcement does not mean they won’t pursue it if they can.
A good article would be one where Google states it won’t take any tax incentives even if it qualifies for it.
If Amazon hadn't turned this whole "HQ2" thing into a national drama they could have built a huge presence there without riling up so much backlash. Hopefully this ridiculous stunt is a lesson to them.
<speculation>
Honestly I think they had only a very few locations in mind when starting this "search" anyway, but wanted to frame it as this big, open-ended, national competition in order to wring the highest dollar amount out of their favorite spots. They were never going to take the risk of attracting workers to Tulsa, Detroit, or {insert other city in Middle America} over an existing large pool of talent in an attractive metropolitan area.
</speculation>
While it is conjecture, I think this speculation is accepted relatively widely at this juncture. So given the farcical nature of the HQ2 competition, I think it's all the better that NYC doesn't bend to Amazon and allow them to dictate the terms at which they enter an already competitive labor marketplace.
Pretty widely speculated that they were going to go to NYC and VA regardless of what the other cities did & the HQ2 gambit was just meant to maximize their bargaining position with these governments
Ok, but those people were wrong, since Amazon ended up pulling out of New York. New Yorkers have an extremely inflated sense of self-important and think Amazon just has to be in New York, when that’s clearly not the case.
Definitely Amazon. They ran ads about it and made a very public campaign that lasted years. Nobody forced them to run a secret auction for who was willing to give them the most taxpayer dollars. Apple, Google, and Facebook are all setting up big new offices in New York right now, they didn't need billions of dollars in subsidies to do it.
I wonder how many Queens residents sold their apartments/condos before this news broke? Talk about timing. I know of one person who was drooling at this unexpected windfall and will now be very... sad.
Between this and the L train drama impacting Williamsburg, I wonder how much volatility the outer borough housing market can take.
Sure there has been a housing bubble there for a decade, and I'm certain there are some real estate insiders benefiting from this arbitrage, but this kind of dysfunction can't be good for the economy.
I think in the long term that condo will have value. Queens is reasonably priced and a decent commute to Manhattan. My suspicion is long term, it will be commute time that dictates housing prices. (Look at cities in Europe, where there's excellent public transit - the "nice" areas are downtown, and the "slums" or "rough" areas are often in the burbs.
> We do not intend to re-open the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.
So this whole HQ2 thing ended up being a grand waste of everybody's time.
Big slap in the face to the other cities filing bids. They also made attractive offers, but Amazon wasn't interested in them, just in wringing tax breaks out of NYC.
The HQ2 search was likely always a facade to try to leverage their real targets. Hopefully all those other cities now realize Amazon was just playing them. Corporations can and will lie for profit. Corporations just don't like it when they get caught.
As someone who lived in NYC for 5 years, I can't understand how anyone can not consider this a loss to NYC. Don't get me wrong I hate corporate welfare as much as anyone else and I have no desire to work for Amazon because it seems like a corporate sweatshop, but 25k jobs at an average $100k+ salary would've been a boon to the city, even despite the $3 billion in tax subsidies. The additional revenue for workers and taxes would've been a huge boost to the economy and would've more than paid for itself.
The jobs would've been in Long-Island City, which is basically a glass tower condo ghost town with practically no office/business presence. The subway for people commuting into LIC for work is probably currently fairly empty, so the subway could accommodate them. (The same cannot be said of the reverse. Commuting from Astoria, Queens or Williamsburg, Brooklyn into Manhattan for work during rush hour is horrible).
I agree that politicians need to do a better job of accommodating those who are displaced by gentrification. NYC housing costs are insane (as someone else mentioned we undertax single-family homes and $100m penthouses), the subway is failing, etc.
Perhaps the deal would've gone through had politicians better communicated how the $3 billion subsidy package was not just a handout to Amazon but would actually improve the city and the well-being of its residents.
But given the city's failure to build affordable housing (not the "affordable housing" buzzword where luxury apartments are subsidized to low income people who enter a lottery, but doesn't actually meaningfully increase affordable housing stock) and fix the subway, maybe the city isn't capable of managing itself and stemming the pitfalls of gentrification, and so the opposition was fired up by this awareness. It seems that so long as fundamental aspects of NYC like its subway system are managed by NY State, we will never see any meaningful change at anything more than a snails-pace. Perhaps NYC should be fighting for independence from NY State to be in full control of its own destiny rather than being at the mercy of politicians in Albany with a poor track record of attending to the city's needs. (sorry I got derailed there a bit, just a stream of thought)
Yea, the more I research this, the more I realize that this is the crux of the issue. The residents have no faith that the politicians will stem gentrification.
The affordable housing crisis and congestion will only be further exacerbated. Your average Queens resident who's already barely making her rent will see rents skyrocket, forcing her to move out and further into the boondocks come lease renewal time.
I think the opposition reflects a dissatisfaction with the politicians/administrators who run their city more than a hatred of Amazon.
> The subway for people commuting into LIC for work is probably currently fairly empty, so the subway could accommodate them. (The same cannot be said of the reverse. Commuting from Astoria, Queens or Williamsburg, Brooklyn into Manhattan for work during rush hour is horrible).
I lived in Greenpoint and Sunnyside for 3 years ~5 years ago and either took a train from LIC into the city or through LIC. They were always busy. Just because no one is going to LIC for work doesn't mean that they don't have to use the same trains that would be used to go to LIC. The 7 is a crowded line as are the orange and blue lines that go through. The only line that wouldn't be incredibly crowded is the G, and even that isn't fairly empty going to Court as it's a popular way to get to midtown if you live near the G.
True I didn't mean to assume away the subway problem - The subway is already over-capacity on many lines in its current state, and the administration has failed to do anything about it. In my 5 years the subway got noticeably worse every year.
There'd be a lot to unpack to reply fairly and completely to your message here... so to be brief...
I'd say the MTA's problems around poor oversight wouldn't be magically solved by NYC taking control. For example, NYCHA was under NYC control. Sure, over the years the Federal Government has diminished funding from their side -- but that should not overshadow the contractor and union corruption that NYCHA, whose head was controlled by the City, suffered with. You don't need to re-read the headlines about the falsified lead inspections, but I probably do need to remind you that in the last couple of scandals (one involving orgies and parties in a South Bronx project, as well as clocking overtime while not being there), not a SINGLE person got fired, thanks to union protection. Rumors are an elevator repairman position pays 300K. Until recently, NO repairs were done anywhere after 4pm due to union agreements. Finally, the City is the worst landlord - racking up violations more than any private landlord could, in the worst sort of hypocritical irony. So no, I don't think so.
NYCHA was found at fault recently in a Federal lawsuit, where HUD almost took the whole thing over. You can't blame the Federal Government for that.
You probably don't want to know that all the green scaffolding that lasts years is being rented -- the money going to a private contractor. You can look this up and do the math, it's just another example of incompetence.
Next, the City is already making MTA's life harder financially, and here are two recent examples. One is, the Mayor came out against banning food on the subway because it supposedly disproportionally affects the poor. Yet, trash fires from stuff like food containers account for a sizeable fraction of the delays. Here's another. The DA stopped prosecuting subway turnstile jumping, which costs 80M a year from lost subway fares and something like 120m from lost bus fares. And prosecuting this would be racist, we're told.
Finally property taxes go up 20% a year -- at least mine do, because that's the max allowed by NY State. If NYC were running its own affairs, I can't even imagine what would happen.
They failed to implement a wider congestion charge, like they do in London and many other places, because, ahem, it, according to the Mayor, affects the poor (he said this). So now we applied a congestion charge to taxis and Ubers/Lyfts/for-hires, because the drivers are rich, right?
I could go on. Finally I'll leave you with, have a look at how many new City jobs opened up and new agencies opened up in 2018. Do you really think the City can be trusted fully owning its budget?
Wow, I'm just learning about these scandals (I left NYC a year ago) and they are very disturbing. The fact that these employees haven't faced any civil/criminal charges and haven't even been fired is despicable.
You're clearly right in that the NYC taking ownership wouldn't magically solve the issue. There's a bigger systemic problem here - piss poor management and complete lack of accountability. The fix isn't as simple as changing ownership since clearly these organizations are being misproperly managed regardless of whether NYC or NY State are in charge.
More drastic reform is necessary. I don't know what that looks like. Maybe we can start by giving politicians more direct control and oversight over these "public benefit corporations" that they're bankrolling.
If your property appreciating in value by 20+%/year? That's insane.
I don't know if you can say "never". The relationship between Dell and Round Rock, TX was based on such a deal and was a significant boon in the growth of a small town into a reasonable size suburb with a good amount of industry.
I have plenty of examples where it works out. The town I live in gave large tax breaks not too long ago and it's working well. Nearby, sports facilities were financed with balloted measures at the request of the public, sometimes in conjunction with the local ISDs who share the facilities. The vast majority are benefiting from this public/private economic cooperation.
I can offer a counterexample. In the city I live in, there have been several major tech companies that were given enormous tax breaks and other gifts in exchange for moving in. They'd move in, build their buildings and factories, and everything would look rosy for 3-5 years. Then they'd cut and run, leaving the city worse off than if it had never done the deal in the first place.
Yup, goes both ways. Assuming the companies promised more and underdelivered, your city's economic council should have written the contract-break into the contract. Or assuming the companies didn't promise that much, your city seems to either have done a deal aware of the potential of negative outcome (and accepted it) or did not do due diligence. But it doesn't discount the idea of economic incentives as a whole due to poor city planning in this case (or a gamble, whichever it was).
> it doesn't discount the idea of economic incentives as a whole
I never said it did.
However, if you really need to make a contract iron-clad in order to protect yourself (and good luck with that!), that's a very strong indication that the entity you're dealing with is untrustworthy and you shouldn't be getting into bed with them in the first place.
The problem with most major corporations (and particularly major tech companies these days) is that they are not trustworthy actors.
Sports facilities are a shared multi use venue that a city could make use of for decades. Amazon can and would move their staff whenever they want, and all the subsidies given to them just to have their people sit in Queens for 8 hours a day would be pissed away.
I'm very much not a fan of using public money to build stadiums for billionaires, but the deal with Amazon is a bit different in that it would actually have positive economic impact for the eventual location.
With a stadium, you only employ a relatively small number of people during the week and off-season. Staff during games and concerts are not really earning a ton of money that will create new economic activity. With Amazon, tech workers actually increase the tax base and they're spending their money at local businesses. At least with the Virginia deal, the tax breaks don't kick in until they actual create jobs at the promised salary levels.
Now I don't really agree with giving a massive private business all of these tax breaks, they can afford to expand without them if it makes business sense. The problem is that each state is competing with each other and FOMO kicks in. Without that powerful motivation companies wouldn't pull these stunts. Although eventually they'd try to pit countries against each other (which they kind of already do).
As much as the anti-gentrification politicians would claim a small victory, this is a loss for NYC and the future development / resilience of its economic base.
Cities will keep on losing this kind of battle until some form of government or policy arises to counter the power of corporations (which are de facto increasingly taking the role of governments). Under our current regulations and incentives, I'm actually glad to see Amazon flex its political capability and teach NYC a lesson in what happens when you let vocal minority dictate public policy. Let examples like this teach us how broken our laws are.
Note I am equally glad to see some day that government (federal, state) come up with policies that stop cities and states from undercutting each other to get a temporary revenue / population / popularity boost at the expense of giving away the farm just to get it (until you find out it wasn't worth it, and get to try and remember that at the next election). Or god forbid, actually create policies that in the long-term stimulate as many jobs as a corporation might in a single swoop.
> this is a loss for NYC and the future development / resilience of its economic base.
I don't see any reason to prioritize the "economic base" over the people currently living there. Those things do not necessarily go hand-in-hand. They can, but often do not. Those elected officials seem, to me, to be representing the best interests of the people who voted for them. What's best for the tax base of a certain geography is often at odds with the people currently living somewhere.
LIC is essentially a neighborhood cut from whole cloth - it used to be all taxi yards and vacant warehouses, bit of high end printing.
No one lived there until very recently, and the people that do are rich as fuck - it's basically a discount Midtown East. The poor people who live in the nearby projects came out strongly in _favor_ of Amazon opening up and lobbied the city hard - turns out Amazon also needs janitors, cafes etc.
Isn't this exactly the opposite? Amazon would have destroyed the general economy in NYC like they did in Seattle. This is the city ignoring the big corporation and listening to their people. NYC doesn't need Amazon. It needs to fix it's rail system.
Taxes from 25,000 making low six figures pales in comparison to the incentives handed to the corporation. What is a better investment for NY, handing 3b to amazon, putting 3b directly into the rail system, or putting 3b in an investment fund and making use of the dividends? I'm not sure, but I can't help but think that if amazon figures 3b is a good deal for them, then it is an irresponsible use of public funds to enrich large % shareholders of amazon rather than having that public money 100% go to public use. Amazon isn't in it to improve LIC or NY, they are in it to raise their share price at the end of the day and wouldn't care less if Queens burned to the ground and sunk into the east river as long as earnings reports remained positive.
Suppose each worker makes $150k/year in income and spends $50k a year. That would come out to about $187M in income taxes and $125M in sales taxes each year from the directly employed individuals. There is likely to additional revenue as well. The economic impact studies commissioned by the mayor and governor put the expected revenue in the $20B+ range over 25 years.
It’s become very stylish to rage against corporations. I wish people would take a more rational point of view. We shouldn’t be hating on successful businesses for fun.
Edit: also, I’m not sure, but isn’t the $3B a reduction in taxes Amazon would have paid? So it’s not like NY had that money to begin with. It’s jist a reduction in what they would receive.
How long will it take to cover the almost 3 billion dollars they were offering Amazon? That is money that could go into improving mass transit right now AND provide jobs for building and operating it, while benefiting hundreds of thousands of citizens through it's usage.
New York isn't literally giving Amazon $3 billion, it's a tax break. Big difference. It's not like New York is foregoing $3 billion in income from other businesses in order to accommodate this subsidy package.
And like other commenters pointed out, the state still makes money through payroll taxes, sales tax, property tax, etc.
I agree that the politicians should have made it more clear that the additional tax revenue would be used to fix urgent problems like the failing subway, poverty, etc.
The average employee in that 25k cohort would need to be paying $12k worth of state taxes to NY every year for ten years in order to recoup the $3B tax break figure.
Average $160,000 household income per employee = ~$14,000 per year in state + local income taxes. That's ~$8,500 per year just to the state in income taxes.
Include all taxes from 25,000 employees + their families (property taxes, sales taxes, etc), and it's a very likely $4.5 to $5 billion over ten years to state & local coffers from the employees.
And that's just the direct benefits. It excludes any taxes Amazon corporate would pay, such as property taxes on any real-estate they buy over that ten years. It also ignores the potential for additional expansion in that ten years (Amazon will more than double in size over that time, to half a trillion dollars plus in sales, I'd bet on more than 25k employees).
It would have easily paid for itself, which was actually never in dispute. People didn't like it regardless of the fact that it would have paid for itself. They disliked the idea of giving Amazon anything.
How do you figure that a family is paying more in property tax / sales tax than a not family? Property size is a function of income, as is sales tax, and you've already included income in your calculations.
The other issue is that this is assuming literally all 25k employees would be new residents of NY. Assuming this is true (which it probably wouldn't be), that also means that the city needs to maintain infrastructure for at least 50k new residents (probably more like 75k assuming an average family size of 3). That's not an insignificant amount of new people who require public services.
Regardless, ($14k * 25k * 10 = $3.5B). Not that much more than the initial tax rebate, and not accounting for any additional costs to the city. Also assuming that the rate of tax-paying by employees remains consistent, and that they don't cut any staff in HQ2, which is far from certain.
As to:
Property taxes on real-estate owned by AMZN
You realize any property that Amazon would purchase is already owned by someone, right? And that the current owner is already paying property taxes.
Amazon already has an office in NYC. If they want to expand in NYC they can. Amazon growing in NYC is not at all predicated on the existence of HQ2. The only probable reason Amazon would continue to expand in NY specifically would be for more tax breaks. Which kinda defeats the argument that "Amazon will grow and we can collect more taxes".
1. New York State has a high tax burden. They don't just collect income taxes - they also collect property, sales and capital gains. $12k per year all-in for a high income worker is pretty typical when you account for these additional taxes.
2. Amazon inc. will also be paying taxes. It doesn't fall entirely on individuals.
3. Ten years isn't that long for a four hundred year old city.
Seems like an clean net positive for the city even viewed in the shallowest of accounting terms. This doesn't include the positive network effects of encouraging the future growth of Amazon and other tech companies in the area.
What if Amazon decides they only need 10k employees in "HQ2" after 5 years?
Better bird in hand than two in the bush.
NY needs to focus on improving infrastructure now, which is the only guaranteed thing that will promote growth in the long term. And to do that, NY needs to be 1. less corrupt and 2. not give giant tax breaks to corporations that already have offices in the city.
Yes, maybe Amazon HQ2 will be a net positive 10 years down the road, but NY should focus on fixing its broken subway system and other structural issues so that the city can actually support 10 Amazons in 10 years. And HQ2 literally did the opposite of that (increasing ridership while decreasing revenue in the short term is not how you improve infrastructure, surprisingly).
It's not. Amazon is one of the best things that has ever happened to Seattle. The Seattle economy is by far one of the greatest results America has seen in the last 30 or 40 years among major cities. There are only a few cities in the US that compare when it comes to quality of life, standard of living, incomes, employment prospects, et al.
When someone says it's destroyed, they mean it's gentrifried or exclusionary, not benefiting everyone equally. That's certainly true. Economically the fact is Seattle has been an epic boom city for two decades now.
Sweden, Finland, Denmark and Norway also don't benefit everyone equally. 99.9% of the world can't live there, few of the planet's 7.5 billion people are welcome. It turns out that all nice, affluent places are aggressively exclusionary, without exception.
Huh? Seattle has one of the best-performing economies of any major city in the US.
And how does building a bunch of offices in LIC hurt the rail system? If anything Amazon would be a new major constituent that would benefit from improved rail service.
If these states are so flush in cash that they can give tax breaks, they should go to small business... not the richest guy in the world. Why should government intervene in in a free market and give one business a massive advantage over everybody else?
1. $3B in "incentives" sounds like a lot, but would this have been a good investment? i.e. would the city and State have gotten a reasonable return in the long run?
2. New York already has a lot to offer in terms of labor market, real estate for employees, and access to capital markets. Did Amazon really need incentives to want to be in NYC?
3. No huge loss for either party. NYC doesn't need Amazon, and Amazon can make the little people dance for them somewhere else.
The problem with subsidies is that they needlessly cost money in a zero-sum competition between cities. It was always clear that Amazon would build somewhere. A race to the bottom competition over the exact location leaves everyone but them worse off than the alternative, which is coordinating to refuse to engage in it, like any sane economy like the EU does.
Demand and price are not the same thing unless both sides have perfect information. The fact that Amazon ran a secret auction for their HQ2 compelled New York to overspend, for fear of missing out.
Concerning 1. I believe that is often overlooked. It would not be hard (I suspect) to figure out the future effective tax revenue a municipality would receive.
Also, being a positive gain doesn't represent a good deal. We don't know what the lowest deal was that Amazon might have accepted (2 Billion? 1 Billion?) so even if NYC winds up in the black, they might have been leaving hundreds of millions of dollars on the negotiating table.
It's just like anything, you might benefit from the price you pay but you might have been able to get it cheaper.
As part of Amazon’s new headquarters, New York and Long Island City will benefit from more than 25,000 full-time high-paying jobs; approximately $2.5 billion in Amazon investment; 4 million square feet of energy-efficient office space with an opportunity to expand to 8 million square feet; and an estimated incremental tax revenue of more than $10 billion over the next 20 years as a result of Amazon’s investment and job creation.
The Allowance of a helicopter pad shows how tone deaf the proposal was. Never mind the safety issues of a helicopter flying over a heavily populated area, the noise of one was such an issue in Brooklyn that they banned any flights over land as a quality of life issue (other than police or news helicopters I think). They still come close enough to the land that they are a nuisance if you live near or enjoy the new publicly accessible waterfront areas.
EDIT: Apparently there were limits placed on 120 landings a year and it was on the waterfront campus mitigating some of the safety concerns. It was still a major concession given though that does nothing I can think of to add to the community.
Surprise, backroom sweetheart deals between businesses and politicians are wildly unpopular.
And it was dumb for Amazon to seek out subsidies anyway. Amazon only needed one criteria to have a successful HQ2: A willingness to accommodate new housing demand. $3B in subsidies would be dwarfed by the increase in salaries from higher costs of living. If a city can allow housing to be built, and keep up with Amazon's hiring demand to keep housing prices flat, that alone would be worth far more than any city or state could ever hand over to Amazon in subsidies.
I guess I didn't realize how many commentators here were New Yorkers. XD
Everyone's moving to more comfortable places with lower costs of living. NYC is not an attractive place for job candidates unless those candidates are already in NYC. Even companies with a strong presence in NYC are expanding in places like Nashville, Omaha, Dallas, Denver, etc. rather than in NYC.
At some point, New Yorkers ought to ask themselves why everyone wants to move to these nice midwestern cities.
Tech market is hot everywhere. NYC has been an aberration on cost of living for my whole lifetime and more. What's new is the plethora of tech jobs outside of NYC and SF. Again, ask yourself why great tech jobs would suddenly appear in Nashville, TN. Why would that happen? Why do you think?
Truth. I took a lower paying job in the midwest, and I can now save a lot more money, while also living a less stressful life. NYC is a really cool city and I enjoyed living there. But I "did my time".
I think more and more tech workers are going to wake up to the fact that while mega-city life can be cool, it's not the only way to live.
I mean the only reason why you save a lot more money now is because your current lower paying job had a better negotiated salary. You could have just as easily gotten a job with less take home pay in Omaha than in NY.
I think there is something to be said about early career people rushing to NY and not realizing how much 80k really is, though. Schools should really have a class for all majors that just goes over how you calculate and compare cost of living and put a price on benefits, including the intangible benefits like having other employers you could move laterally among without planning to uproot and go 1000 miles away.
I’m not sure why tech workers think they’re special. Almost everyone that moves to NYC for a good office job goes through this. Moving to a suburb or another city after age 35 is a stereotype. So is staying here and enjoying a DINK or single life (unless you have a lot of money!).
> At some point, New Yorkers ought to ask themselves why everyone wants to move to these nice midwestern cities.
Not sure why you chose the midwest as a qualifier here - out of all the cities you listed, only Omaha would be considered a midwestern city.
Out of the 15 fastest growing cities according to the Census, almost none of them are in the midwest [1] (Only one really: Columbus). Admittedly it's over a short time span.
Also: #5 is LA, a city I don't think anyone would consider to be low cost of living.
The real story is that the south (+ Texas, depending on what you consider Texas) seems to be growing rapidly, not the midwest.
I mean, you could focus on whether the word "midwest" is accurate, or you could take my point that there is a reason why people are moving out of places like NYC in favor of less dense cities that don't smell like urine.
> I mean, you could focus on whether the word "midwest" is accurate
It's actually pretty important, because the crux of your argument is that they're moving to places with much a lower CoL. If people are moving from NYC to LA/Seattle/etc., your argument doesn't really hold much water.
> or you could take my point that there is a reason why people are moving out of places like NYC in favor of less dense cities that don't smell like urine.
Where are you getting that information from? As far as I can tell, NYC has had about a 6% population growth since 2010. It actually matches the US overall population growth pretty well, which is pretty impressive for what is far and away the most populated city in the country.
> If people are moving from NYC to LA/Seattle/etc., your argument doesn't really hold much water.
Gee, I don't remember mentioning "LA/Seattle/etc." by name. Unlike some other cities that I mentioned by name. Did you see the part where I mentioned cities by name?
> As far as I can tell, NYC has had about a 6% population growth since 2010. It actually matches the US overall population growth pretty well
Great, now compare that to the growth rates of Dallas or Nashville or etc.
Nashville and Dallas aren't quite midwestern (nor is Denver really), but your point stands. Costs to live and work in the big coastal cities just seem to keep rising, but many folks are not getting enough additional value out of living in those places to justify paying it. This pattern is probably going to keep up for a while, especially because remote work is such a good deal for both companies and employees if they can do it right.
A bit disappointed. The narrative really turned on Amazon during this process. But I feel like every organization shops around for deals - Amazon was the first company to do it transparently and openly tell cities what they have or are missing. There was a real opportunity to bring tech industry to heartland cities.
In the end all they proved was this kind of stuff should just stay in the backroom. And good paying tech jobs stay on the coasts.
You’re being tremendously naive about this. There was never any chance of Amazon locating to St. Louis or whatever: NYC and DC were always the only options on their radar. The entire “HQ2 search” malarkey was just to extract the maximum possible tax breaks from whichever one they chose.
They wouldn't know the details if Google or Facebook quietly shopped around either! But when they do it behind closed door they don't open up anyone to criticism.
You have to be really careful with bringing a sudden influx of high-paying workers into an area that does not already have that kind of income distribution (generally speaking, COL on the coasts is higher than that in the heartland). If you don't increase housing supply enough, you can price out a lot of the current residents and things can go downhill quick.
It has already been rumored that Dallas is working with them, still. The head of the initiative, from the start, has stated, "We have never ended talks with Amazon, they are still ongoing". That was as of earlier this week/last week.
As someone from the N. Virginia region I think this is a huge win for our region. And I think it will do great things to continue the grow the region's technical strength. I'm glad they can focus on building a single larger HQ and not two equal HQs, which always seemed odd to me anyways. NYC is not too far on the Acela line to DC. And this might spur development of more high speed rail or hyperloops or whatever.
I'm not sure it is. There was always a suspicion that Amazon knew from day one they wanted to open a HQ in NYC—they just put on this show to get cities into a bidding war to provide the biggest tax break. I don't imagine the publicity around having NYC tax-payers subsidize the world's richest man's business dealings is positive.
Amazon also got a lot of free, confidential data on growth prospects from midsize to large cities all across the US, which would be useful for planning other facilities like warehouses and retail outlets like Whole Foods.
The Subway is a mess primarily because of cronyism, corrupt labor unions and mismanagement on a typical, everyday "these people suck at their job" type. Fixing the MTA is important, but its problems are essentially independent of this Amazon deal.
Why would that be an either-or thing? I'd rather have Amazon here with no tax subsidies so that total tax revenue increases so that there's more money to fix the subways.
A shame. As an employee of a Big N company in NYC, this would have provided upward pressure on my salary (even if personally I wouldn't want to go work for Amazon).
But I didn't like the big tax breaks, and as a taxpayer of the city I'm glad my money won't go towards subsidizing the expansion of one of the world's most valuable companies.
It's too bad Amazon wasn't willing to pay their fair share.
I think that there really was likely to be a net benefit to New York for the deal, if not the city than at least for the citizens (and even then probably close to break even based on roundabout increases in city income). Apparently there's often a "local multiplier"[1] for good paying jobs like this that enter an area, in this case approximately 5 more jobs per high-end worker to service the area in general through meal delivery, wiring, elevator repair, etc.
This was all covered in a Planet Money episode[2], so you can listen/read it and make your own decision, but if it's true, it seems a shame that New York was denied what should be a favorable outcome because of FUD, spite for Amazon/Bezos because they are large, or some combination thereof.
Fair enough, thanks for the info. I wonder if this change means they'll simply be expanding those existing offices more rather than (presumably) moving many of them into the new space?
Basically NY will be treated like any satellite campus. It will grow, but slowly as it has for years. The big "deal" with this move was bringing 25k jobs to NY, which has 5k now. That isn't going to happen, at least nowhere near the timeline it was.
The public is so muddled about what an effective job creator yields. They could move a small niche of AWS to Newark, restore some warehouse into office space, and claim they are adding a projected 10k jobs to the area.
Literally the next sentence, the commenter talks about more than just their salary and how it's a shame that Amazon didn't want to be a part of their community and pay their fair share.
I would have liked to have had Amazon become a bigger presence here in NYC, but I strongly disagreed with their tactics and use of a contest to facilitate a race to the bottom among municipalities.
This reminds me of the asshole billionaires who shake down cities to get a free stadium for their stupid football, basketball or whatever team and have a bunch of regular people pay for their toy.
I think this is more on the city and state government than Amazon itself. Of course Amazon was going to push for the sweetest deal they could get but Cuomo and DeBlasio bent the rules too far and the massive push back was justified, if I recall correctly the city council was going to use some really iliberal moves to get this tax package through.
NYC could've had Amazon, even with decent tax breaks, but the government just went too far without the support of its constituents.
Some practical considerations that nobody talks about are 1) the 7 train that would have served Amazon's HQ2 location would be hard pressed to accommodate 25,000 additional riders. The 7 train is notorious for delays whenever there is in-climate weather - for at least the past twenty years the slightest precipitation knocks out the signal system and the segment connecting to manhattan shuts down every alternate weekend and whenever the weather is in-climate for maintenance. 2) housing in the area if at capacity so not sure where they think 25,000 additional people are going to live 3) schools in the area are over capacity so not sure where they think the kids of the 25,000 extra people were going to go. I've also observed that Amazon employees live in utter terror of being out of contact - I'm under the impression that missing a support call results in immediate termination - and there are numerous dead spots within the city and along commuter corridors where you will be out of contact for prolonged periods of time.
good riddance. This was a bad deal for NYC. 2-3 billion in corporate welfare to the richest man in the world who heads a company that made 10 billion in profits and paid ZERO federal income tax. Against all odds I suspect NYC will survive. Now that Cuomo has an extra 2 billion or so in his pocket maybe he can fix the transit systems that are the lifeblood of the City.
The big tech giants seem to be A/B testing different ways of opposing and working with the government. Sooner or later these tests are going to start showing they have more power than the government, and they will start ignoring laws because they are irrelevant to increasing whatever metric is important this quarter.
This may have already happened, it's really hard to say.
This is more true than people realize. I'm not sure if it's entirely the case in this situation; as in that wasn't the initial intent but that's the way it turned out.
Things like Uber, AirBNB, even Google Waymo are all examples of this.
I'm not so sure it wasn't the initial intent. What was the "HQ2 search" but an experiment in new ways of dealing with governments and seeing how much you can get from them?
My current pet idea is that the Electoral College ought to be replaced with the CEOs of the Fortune 500 companies. That way we could do away with the facade that presidential elections currently create.
There 2014 Princeton study that showed only the top 10% of income earners political opinions are reflected in the political leanings of the elected representatives in the US. I did a short video on this: https://youtu.be/sD8KtaNzI8o
I saw somewhere that the turnout for Alexandria Ocasio-Cortez's election was somewhere around 4%. The voter turnout for most American elections is really quite low, and I wouldn't be surprised if there were distinct differences in turnout between income percentiles. Perhaps that might go some way towards explaining it.
Edit: I did a bit of research below, and 4% definitely does not seem accurate. I have no idea where the source for that 4% was :/
That's approximately 20% of the total population. I can find no info on what percentage of that 691,715 is eligible voters, but the 4% claim appears pretty ridiculous.
> With 98 percent of precincts reporting as of Wednesday, the State Board of Elections shows 27,826 registered Democrats cast votes in Tuesday’s primary in New York’s 14th District. With 235,745 registered Democrats as of April, according to the BOE, this comes out to a turnout of around 11.8 percent.
Curious fact: in the City of London, companies vote in the election of the local council, with a number of votes which depends on the number of employees within the City.
What facade? CEOs? I don’t think Dems or Repubs would like to see that. Definitely not independents.
We’d get the most pro-business candidate every time. Not that any candidate has been anti/business, but can you imagine, it’d be pro-business on steroids. Schultz, One of the Waltons, corporate raiders?
I think you take my comment more seriously than I intended. It's a suggestion meant to provoke thought about the nature/reality of U.S. presidential elections. With the suggestion one sees that my belief is that large corporations have far more influence on presidential elections than ordinary people like me have. But we have the facade that its actual humans that elect leaders and not the economic entities that are called persons in U.S. law.
Didn’t citizens united essentially try to overturn a previous BCRA reform which disallowed a non commercial entity from publishing a political film? Basically they were trying to “answer” (a la rap battle) Moore’s 9/11 film, but got knocked down by BCRA regulation because it was considered “electioneering” while Moore’s were okay because they were published by a “bona fide filmmaker”.
I think it gets complicated but the decision had merits, I think. Obvs, the SCOTUS believes it did.
In the case, the conservative non-profit organization Citizens United sought to air a film critical of Hillary Clinton and to advertise the film during television broadcasts shortly before the 2008 Democratic primary election in which Clinton was running for U.S. President.
The federal law, however, prohibited any corporation (or labor union) from making an "electioneering communication" (defined as a broadcast ad reaching over 50,000 people in the electorate) within 30 days of a primary or 60 days of an election, or making any expenditure advocating the election or defeat of a candidate at any time. The court found that these provisions of the law conflicted with the United States Constitution.
They were prohibited from airing ads 30 days before the election. The decision in terms of effects and scope was terrible. It was a broad decision and had a very wide effect.
Yes, but had it been published by a “bona fide filmmaker” they would have been okay.
The repercussions may be wider than anticipated or liked, but the decision to not allow them to advertise and show it because it wasn’t by an established entity seems spurious.
It had nothing to do with whether or not it was by a bona fide film maker. It was the timing of the ad and the fact that the movie was going to be broadcast. Movies in theaters were not covered by the law. Your premise is incorrect. The decision could have been narrow in scope. It wasn't. This is what people like me decry.
>In response, Citizens United produced the documentary Celsius 41.11, which is highly critical of both Fahrenheit 9/11 and 2004 Democratic presidential nominee John Kerry. The FEC, however, held that showing the movie and advertisements for it would violate the Federal Election Campaign Act, because Citizens United was not a bona fide commercial film maker.
Disallowing a film being shown 60 days before an election because the person is not a bona fide film maker is very much different than disallowing a film 60 before an election because the person is not a bona fide commercial film maker. The word commercial is important. Citizen's United was not a commercial enterprise. No one disputes this. No one thinks their film wasn't done by a bona fide film maker.
Exactly. That's why we should just dispense with the facade of elections and have the Fortune 500 companies decide who will be President. The free speech rights are too severely restricted if there is a rule that applies equally to everyone that regulates political ads 60 days before an election. It's just too suffocating to live in such a system. Hopefully we can export of our freedom to Europe and get them to get rid of their electioneering laws. Then they too will be free like us.
>My current pet idea is that the Electoral College ought to be replaced with the CEOs of the Fortune 500 companies. That way we could do away with the facade that presidential elections currently create.
So basically a "house of lords" for America, but instead of bishops and lords it's tech CEOs and celebrities? :)
That's actually not a bad idea. We've already proven that the American people do a terrible job selecting a president with the current Electoral College system, so letting the F500 CEOs select the President surely can't be any worse.
Whoa. Let's back up a bit. The DNC and the GOP do a terrible job finding qualified candidates that can do the job. The system is designed to elect the electable. We The People don't have much say in who the parties serve up, who is willing to run, etc.
If the relentless (Media) attacks of DJT are an indication, there are few "outsiders" who are going to get involved in the future. And isn't that exactly what status quo'ers like the DNC and GOP want?
If the relentless (Media) attacks of DJT are an indication, there are few "outsiders" who are going to get involved in the future.
Consider the possibility that he isn't being attacked. That his actions/statements are being reported on. That what you call an attack is indicative of the nature of the man. When you cause George Will to leave the party then....
George Will? He's part of the status quo that laid down the foundation on which Trump build his successful candidacy. That George Will? The old white blowhard? That failure is not Trump's fault, it's Will's & Co. But people like Will don't have the integrity to stand up and be counted. Instead, they use diversion and misdirection, and sadly people fall for that. Will left because he was embarrassed, embarrassed by his own incompetence. Trump was a convenient excuse.
My benchmarks are these:
1) The USA went to War in Iraq over over lie. Thousands died, gazillions were spent, etc. as a result of that lie. The Media barely noticed. People who believe Trump is the worst thing ever clearly never understood who and Dick Cheney was. Trump is a pussy cat compared to Cheney.
2) Not only did BHO renew the (so called) Patriot Act but he expanded its depth & breadth. The Snowden revelation also came to light on Obama's watch. Again, the Media barely noticed. Real journalists would find both of these troubling. Instead, BHO was our first BuzzFeed POTUS.
--
I am by no mean a fan of DJT but the truth is nothing he has done to date comes close to either one of those. He's got __a lot__ of work to do to top either one of those. The Media is bending over backwards to discredit DJT because:
1) It's a favor to the DNC. It lets the DNC off the hook because ppl are too distracted to ask the DNC what should be asked. That is: "How negligent and incompetent do to have to be to lose to DJT? And what heads are going to roll for your debacle? We want names!!!"
2) The GOP doesn't like him either. He stepped in on their dance, made all their candidates look like the fools that they are, and made it to the Whitehouse. That's not how it works.
3) Neither party wants to see another outsider do what DJT did, and they will, by any means necessary, make sure it doesn't happen again any time soon.
4) Trump is good for the Media's business. They love the "outrage". They love the "controversy." As long as it draws eyes and clicks - cha-ching, cha-ching, cha-chaig - they're happy. The media finally discovered that giving Bush #2 and Obama free passes didn't help pay their bills. For the Mainstream Media DJT is like printing money.
George Will? He's part of the status quo that laid down the foundation on which Trump build his successful candidacy. That George Will? The old white blowhard? That failure is not Trump's fault, it's Will's & Co. But people like Will don't have the integrity to stand up and be counted.
George Will has been a solid conservative for decades and written numerous books lauded by conservatives. Consider the possibility that it was precisely his integrity that caused him to abandon the party. Perhaps it's possible that Trump represents a part of the party that a reasonable person with some sense of moral and intellectual consistency wants nothing to do with. How far right does the party have to go before you will question the state of affairs? Trump called Ted Cruz a liar. He implied Jeb Bush is a wimp. He implied that Ted Cruz's wife is ugly. He implied that Rand Paul is ugly. He said that McCain is a loser because he was a POW. He was a loser for getting captured. Trump agreed that his own daughter is a nice piece of ass. This was on the Howard Stern Show. How far does the man have to go to lose credibility in your eyes?
To be fair, was he wrong? How many career politicians do you know that aren't liars, especially Republicans?
>He implied that Ted Cruz's wife is ugly.
Again, to be fair, I just did a google search and he's not wrong, IMO. Yes, it's in poor taste to make remarks like that, but Trump is a populist, so he's basically playing the "I call it like I see it" card, which gets votes from his base.
>How far does the man have to go to lose credibility in your eyes?
The things you're complaining about are positives in the eyes of Trump voters. That seems to be the problem you're having with understanding. They don't want another regular politician; this is why populists come to power now and then. It seems to me that the biggest problem that both parties have, and is shown by your post here, is a completely inability to comprehend the appeal of someone like Trump to low-information, low-class voters.
Forget everything else, it's First Past the Post voting that is the cause of many of our problems (e.g., no possibility of third parties).
If we had an alternative voting system (there are several good ones), people could actually vote _for_ someone rather than just _against_ someone, and there would be some criteria for voting other than who can put out the most inflammatory campaign commercials.
But again, the status quo would never go for it, and I suspect most voters wouldn't go for a system that can't be explained on a bumper sticker. I'm not trying to insult the intelligence of the average voter, just their attention spans.
Or maybe we shouldn't be voting for people at all, but instead parties. That's how it works in Europe, and they don't have the two-party system we have because of it.
A version of Trump that was actually smart and competent would probably result in an economic boom rather than stupid government shutdowns and dumb and ineffectual tariffs.
This is already happening. Corporate Lawyers exist solely for this reason. What can we get away with? How much will it cost? What is the opportunity cost of doing this in Location A, B, C. Strategies are employed to save money. Fines are the cost of doing business.
And lest I forget to mention the lobbying that happens everyday.
I think this is fantastic for both as they don't deserve each other. Residents don't want a company getting breaks and Amazon wants breaks. Amazon has plenty of other places where the residents value them more and NYC has plenty of other companies to fill the coffers/employment.
It irks me to no end that our system is set up to reward the largest and the wealthiest.
NYC should have prepared a package for Amazon and said "this is what we'll guarantee in breaks to small business owners if you come here".
I didn't even think it was a particularly bad deal all things considered, I just hate the idea.
Meanwhile, half of NYC and the country is wondering what NYC will do without 25,000 jobs. Or before that, wondering how the housing market could possibly bear it.
25,000 people, a ton of whom were already living in NYC (thats why they wanted to come) was going to be barely a ripple.
The whole thing was a sham. People were way overstating the affect it'd have, and NYC needs better subways, not more tech jobs (or both in conjunction).
Whatever real estate may have been purchased in or around LIC is still going to be valuable even without this deal, but may take a little longer to recover.
In 2016, I relocated from Silicon Valley to southern Rhode Island to build and reside in a new custom home. Over the next two years, I probably injected up to $1M into the local economy. I didn't expect or receive any special treatment from the local government. I didn't go to local officials and threaten to relocate elsewhere unless they gave me incentives, tax breaks, concessions, enticements, zoning variances, etc.
In my opinion, the type of special treatment that New York offered Amazon is fundamentally anti-democratic and just plain wrong.
IMO, Corporates are not evil per se. How it is run, and by whom is the question. America was built on the progression and opportunity of both economical and social high fluency. Stepping on the breaks of the progress of the largest economy, doesn't only heart the US, it heart all the western economies which have trusted and followed that example. If the problem is that Amazon has made a mistake, punish the act and collect the taxes that should have been collected. Don't step on the neck of the economical progress, please.
This move will keep more tech in SF and not in NYC, beyond just Amazon. For every Amazon we lose, we lose 50 startups to the valley. I can't believe NY politicians let this happen.
>We do not intend to re-open the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.
It's not clear to me how this comment is relevant. Northern Virginia is the DC area, and if this cancellation means that all of the jobs that were previously slated to go to NYC will instead go to the DC area office, then that will have huge effects on DC.
"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"
Sounds like a negotiating tactic, to encourage residents in support of the campus to put pressure on their representatives in government.
The "politicians" are upset, because their constituents are upset. Amazon, attempting to turn the tables is an interesting tactic - sort of a reverse psychology. I wonder if it will work.
It certainly looks final, but that line struck me as odd. It's either a "final jab" as they walk out the door, sort of a message or lesson to other cities or regions, OR it's just a very hard-line negotiating tactic.
Honestly, them coming back to NYC wouldn't be any less of a shit show then the process of them coming to NYC.
In a way this is good as we need to stop this race to bottom with government subsidies. Amazon should be expanding in NYC not because of some handouts, but because of the talent it has to offer. Also, Amazon's statement that they are not doing a HQ2 search really underscores what I always suspected - the dog and pony show is about maximizing handout for a natural increase in satellite office headcount
I can't imagine this was simply due to a vocal minority that opposed the move. Instead, I'm more inclined to think that the powerful NY unions who were dissatisfied with the deal were seen as a long term threat: They represented a likely avenue to unionization of Amazon employees in NY that would, from Amazon's point of view, be a very dangerous precedent.
I just don't understand why it's so hard to go build such a huge head quarters in a semi-big city that's close to a big one. They get all the benefits of having talent nearby, they get to use good enough infrastructure. Businesses definitely will flourish around, lots of people and companies would be moving into this city just because of the flourish
Try to bulldoze your way through community politics in NYC and get your ass handed back to you, every time.
The only person who successfully circumvented NYC politics was Mike Bloomberg, and that was solely a result of his personal charity giving over $600 million in donations to different community orgs and non-profits over the course of his mayoral tenure.
What needs to happen now is that we need to use the Commerce Clause to make it illegal for a company to cut this type of deal with a city or state in the first place. It just creates a race to the bottom where cities have no choice to subsidize corporate bottom lines with taxpayer money or else have businesses leave.
Question: What does everybody think this might mean for the Crystal City VA area (i.e. the DMV)? The article said they plan to continue on as planned.
Does anybody think that Amazon pulling out of NYC will make their impact on the DMV greater or would it probably be the same as if they had HQ2's both places?
Not to get off topic, but given all the talk about climate change and rising oceans, the LIC selection always struck me as odd. Why dig in (with a HQ2) that's so likely to be compromised by storms, rising tides, etc.
Yeah. It sounds odd, but it's certainly not crazy / wrong.
This will strengthen Amazon's hand in negotiations with any other region. Politicians in Virginia, Nashville, and elsewhere will say, "We don't want what happened to Long Island City to happen to us; let's capitulate more!"
Hopefully seeing someone (even as well off as NYC is) push back against showering taxpayer dollars on a company of Amazon's stature will lead to a reevaluation of taxpayer subsidization for corporate relocation/expansion.
In this story I am only sorry for people who bought up all the real estate around the future campus, ouch! Remember all the "insider trading" condo purchases, just before the announcement, that is going to hurt...
Interesting. I guess they estimated that the battle to retain the tax breaks wasn't worth the fight. I wonder if they'll continue to expand in Seattle, or wait a few years before putting HQ2 elsewhere.
This is the same thing that happened to the Mall of America many years ago. It was extremely welcomed, then opposition, and it got scaled down considerably and lost some benefits the state was offering.
Its a sad day for NYC I think. The only exception to that is Queens, I agree its not great to put a corporate office there, it should have gone to Manhattan like every other big office building.
Come to the Twin cities, plenty of land, lots of tech already, highly educated work force. Lots of lake houses and downtown is booming. Winter isn't that bad.
Have you been there this year? It was -26F without the wind chill a couple of weeks ago.
Come for the cold weather and stay for the high taxes and high housing prices on the St. Paul side. Also, traffic is going to be fun on the west side for a couple of years.
Lol.. I live there. Polar vortex and all.. and that vortex impacted most of the country. The flip side is that houses are pretty cheap. You can buy in most brackets in almost any area you want to live in. Taxes aren't that bad. Cost of living is cheap. Summers are great.
Which side do you live on, the houses on the east side are up there. Taxes are that bad. I lived there for over a decade, and my family is still there.
I don't understand why these tech companies love building headquarters in areas where property prices are unaffordable even for their own high paid workers.
I started to get that impression when I, as an east coast dev, started getting hit up by Amazon recently... for jobs in Seattle and SF. But not New York.
Good. Why do the good people of NYC need to be taxed just so their taxes can be given as corporate welfare to a large corporation that will then come and organize other New Yorkers’ activities in such a way that money is siphoned out of the city?
If we want to create jobs, we don’t need a giant corporation using our tax money to help organize this human activity. We can hire each other for our own local purposes.
If we want to keep NYC rich then we don’t exploit the labor of the local population to send money out of the city.
The biggest US export by far is Dollars, ever since Bretton Woods they are in demand all around the world. We trade them for stuff others make. It has made Americans lazy and fat.
Do you really want jobs? Like race-to-the-bottom Amazon warehouse slave jobs? Is that the goal of humans? No. It’s just fed to them.
Donald Trump said he’ll keep the jobs in this country. Bernie said he’ll keep the money in this country by preventing corporations and billionaires from offshoring it through loopholes.
I know which goal I’d prefer, if I wanted Americans to be the masters and not the slaves. (I happen to believe that money going to poorer areas is good, so I don’t hold that nationalistic position - but if I did, I would want the money to stay, not jobs.)
It's very different because a large amount of NYC residents rent as opposed to own. To a resident that rents in NYC, Amazon moving in means they will have higher rents and less money on their pocket. It ends up costing many NYC residents actual money in rent to host Amazon, regardless of the subsidy. I think this one is a special case.
I don't see the problem here at all. If you have higher rents, that's because there's more demand for housing, and not enough affordable new housing is being constructed. Who controls that? Your local politicians. Who controls them? The voters who elected them, which is you if you live there. So you have no one to blame but yourself, and no cause to complain. You have the government you deserve.
That is a very shortsighted blame-the-victim mentality. You're conflating the power of the individual voter with that of the entire voting bloc. Besides, even if new affordable housing was constructed (which is getting harder and harder in nyc as people are being pushed further and further out geographically), it's not easy to just up and move, even in nyc.
Sorry, I have no sympathy for "victims" who have all the power, and bring their misery on themselves. The voters have the power over their government, so if they don't like their government, it's their own fault. In the short term, sure, voters can be fleeced, and have to wait for the next election to choose someone else, but this kind of stuff isn't happening within election cycles, it's long-term.
As for "being pushed further and further out", that again is the voter's own fault for not voting better. They don't need to move farther out, they need to build more densely, and they don't do it. This is largely an American problem because for some reason, Americans associate dense residential areas with "slums" and think that only suburbs with McMansions with gigantic and useless lawns can possibly be "nice".
The real data we have shows that incomes of the people who live in an area has more correlation with the cost of rent than the demand. Amazon will bring in workers that will earn higher salary than the average NYC resident. The only way prices could go down would be if developers made a huge error across the industry and oversupplied housing. What you are suggesting is impossible, unless the government steps in and starts to add housing supply with taxpayer dollars. I'm not sure your idea has much reality baked into it. And a resident of NYC is going to vote for real world solutions that benefit them. Not pie in the sky internet ideology.
They don't need to build housing directly; local government controls zoning and development, so all they have to do is insist that higher-density and more affordable housing be built than what is currently happening. They don't do that. SanFran is a better example of this really, but other places in the US have the same problem to some degree. This isn't "pie in the sky internet ideology"; other countries don't seem to have such a problem with development, it all just comes down to having decent government. Here's an article about how housing prices in Japan have been very stable despite similar increases in urban population; largely it's because the national government has taken away local governments' ability to restrict construction the way it happens in places like SanFran.
God I hope this comment ages well, but my skepticism is very high. We still have cabals of corporate paid lawmakers at every level of government and there's still tons of lobbying money putting a finger on the scale of the fight.
But fewer Foxconn style deals and race to the bottom HQ2 publicity stunts would be great for everyone (except the mega-corps).
NYC had brains enough to do the right thing. Why invite a monopoly that should not exist, and give it subsidies? (unless of course the governance is broken - and can not make the right decisions)
"After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. 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.
We are disappointed to have reached this conclusion — we love New York, its incomparable dynamism, people, and culture — and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.
We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult.
We do not intend to re-open the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.
Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time."
Great news! The richest man in the world and his company should have to play by the same rules as the rest of business in New York.
Gotta love New Yorkers for their no BS attitude.
This Amazon process has been complete shit for every idiot city who jumped on (my city included). I call the mayor's line here to leave messages about stuff like this every time it happens and say "see, you dummies this was a bad deal"
This has happened with Amazon, Casinos, GE, The Olympics, F1 racing... cities need to not be so fucking desperate to sell out their residents to the highest bidder.
I'd be more amenable to a property tax increase than any of this garbage.
They’ll still get subsidies, just somewhere. The system being what it is, you can’t fault them for finding the fair market price of setting up their campus at you location. It’s a mutually beneficial deal, but now Mew York gains nothing at all.
That said the system could be changed and laws written to prevent subsidies all together. Then competition for large workforces would be based on other factors.
New York does gain something, the much more vibrant and robust collection of businesses that will occupy that area instead and pay their fair share of taxes.
You really have no idea what LIC is like, do you? They're completely unable to support small businesses except those that cater to the upper-middle class. There is no dollar slice, only $24 gluten-free artisanal pizza. The only business Amazon was going to displace was Citibank.
Turn it around: these cities had absolutely nothing to do with Amazon’s success. Now they want a cut of the revenues (taxes) simply because they want to hire in a location? If Amazon doesn’t consent to that and no deal is reached: how on earth is that a benefit?
If you stop seeing the tax payments as entitlements, it begins to be a lot easier to reason about.
No, because then it's a race to the bottom and all other companies start expecting these same deals (or even better), and eventually you do end up with a situation where the city does not get back more in tax revenue.
It's simple negotiation; you may lose some money on that one deal, but you'll gain more in the end by not decreasing the value of all subsequent deals.
Or, you'll lose out on all the businesses that won't start or expand there because the baseline level of taxation is too unfavorable for the economy (in either sense of the word) that the city offers.
It's almost like taxing easily-moveable economic activity is a bad idea.
And yet there's a huge number of businesses that do have presences in NYC because the tax revenue funds all sorts of things that make NYC attractive to businesses that can't be gotten elsewhere.
A lot of what makes NYC great (like the 24/7 public transit system, the best in the country) costs serious money to operate. You need to get that money from tax revenue.
And businesses aren't actually easily-movable, not at all.
>And yet there's a huge number of businesses that do have presences in NYC because the tax revenue funds all sorts of things that make NYC attractive to businesses that can't be gotten elsewhere.
Most of which were present there because they set up a long time ago. The current environment makes it so that you pretty much have to get a discount to make it worth starting there, per the famous reddit comment:
^ For anyone doubting this, Planet Money did an excellent podcast on how this phenomenon played out in Kansas City with corporations like Applebee's, and cost the city millions:
You could easily argue it put Kansas City on the map.
Kansas City is at least a well known name in the tech world now, when there's plenty of other midwest cities of similar size that rarely get brought up.
Millions would be a steal for the revenue becoming a tech hub would bring in. Even if it does take a more than a decade to be realized.
Cities of similar size: Albuquerque, Milwaukee, Louisville, Oklahoma City (and more).
Out of these, Kansas City comes up more often tech wise. I waste a good bit of time on sites like this discussing tech related matters, and not once have I read an article involving any of these cities.
This is why I said well known and on the map, not 'popular'.
What's the problem with governments competing? That's not a "race to the bottom" any more than competition is a "race to the bottom" in market economics. It is a forcing function on efficiency and good governance where there would otherwise be no competitive pressure.
The counter-point to race to the bottom, is this is an important aspect of pressure in a democratic capitalism to prevent government as a leviathan. The government has a natural incentive to want to raise more revenue, and increase power. A strong market that can stifle these, at times potentially inefficient taxes, can provide a natural check on this.
Obviously the truth is that there are bad aspects of a race to the bottom as well as positive attributes. Finding the balance requires nuance and grace by the leaders who navigate these uncertain waters.
I mean, clearly we haven't signed up for the money-losing deal, as the deal has been canceled because of opposition and no give-aways will ever be made to Amazon.
You're getting downvoted, but it's true. If I recall, the city/state would've broken even not that far into the future, and then everything after that would've been pure profit for them.
It's a matter of principle. NYC (or any municipality) shouldn't be bending over for massive multinationals. It's a form of corruption, one that's depressingly widespread, and it's a race to the bottom that, from a 30,000 foot view, accomplishes nothing but screwing over the taxpayers and smaller competitors lacking the leverage for these antics, and benefiting the corporations that are already enormous and powerful.
I can’t believe you have to explain to people why corporatism is a bad thing. It underlies the largest problems in this country, and we should actively be protesting it.
No. Not "new business". "A" new business. It's a sweetheart deal for one company in particular subsidized by the taxpayers. They're not reducing their citywide tax rate to attract Amazon, they're just giving a handout directly to Amazon.
What you're describing is nothing close to the reality. It's the prisoner's dilemma. Cities that participate in this scheme take turns screwing each other over in an attempt to get a minor benefit themselves, but compared to the scenario where nobody played the game to begin with, they all lose.
Yes it does. It's extremely common for businesses to be offered incentives like this. They are usually bounded in a way to ensure it's beneficial to the city. The ones I've seen are requiring a certain number of headcount be maintained over a specific duration, a certain amount in salary be paid out over a specific period of time, and certain infrastructure be installed within a certain period. If these obligations aren't met, then the company is required to pay back the incentives plus penalties.
Maybe an extreme example of a "bad deal" but these aren't always a slam dunk, and some of the math to justify (especially sports stadiums) can be a bit iffy.
Bezos was really pissed about all the union saber rattling in NY, there was really no doubt it would eventually be unionized at a great loss to his operation, Bezos says "No thanks, chumps"
Amazon is making the right decision to pull out. Given the political opposition, flip-flopping from politicians who previously supported the deal, and activist fervor, there is just too much risk in committing to NY and NYC. The losers will be residents of NY and NYC. This would have been a huge win for them, with massive job creation and tax revenue increases well in excess of what it costs. That revenue could have helped improve services across the city.
Note that Amazon did not provide projections on economic impact or tax revenues or other aspects here. The city and state made those promises, based on economic analyses they commissioned (and likely used in their negotiations). It includes things like taxes from the additional jobs and businesses that will be created outside of Amazon.
All but $505m of the ~$3b in subsidies here would have come from programs that already existed in NY State and NYC (Excelsior, ICAP, and REAP). Would you give up $3b over 10 years (and just $505m above programs that are broadly available) to attract business that will provide an incremental $28B in new tax revenue and $186B in GSP over 25 years? That is a _tremendous_ ROI, the kind that typically does not exist in the market, and a $505m capital grant (the primary Amazon-specific concession) was a small price to secure it. The 9:1 return they projected on this deal was the best such program NY State and NYC would have ever run, and possibly the best such deal ever across the country. To put it into context, the Film Tax Credit program had a 1.15:1 ROI.
We can argue all day about whether the HQ2 search was a bluff or sham or whatever, but there is no reasonable claim to certainty here - and hence negotiation enters the picture to turn something uncertain (Amazon MAY come to NYC) into certain (Amazon WILL come to NYC).
Here are the quotes from the original HQ2 press release on the economic benefits:
> The construction is expected to create an average of 1300 direct construction jobs annually through 2033. Overall, the project is estimated to create more than 107,000 total direct and indirect jobs, over $14 billion in new tax revenue for the State and a net of $13.5 billion in City tax revenue over the next 25 years. The project provides a 9:1 return on investment.
> According to an economic impact study by REMI, Inc., a world leader in dynamic forecasting and policy analysis, the Amazon project will generate over $186 billion in Gross State Product for the New York State economy over the initial 25 years. REMI also projects over $14 billion in total new tax revenue for the State (in 2019 dollars), with annual revenues growing from $10.8 million in 2019 to nearly $1 billion in 2043. The City forecasts $13.5 billion in total new tax revenue.
The ROI here is well beyond any other conceivable option. It is so large that even if projections of a 9:1 ROI are way off, it would be a big win. Also, most of the subsidy to Amazon is not an up-front lump sum. Rather, most of it takes the form of credits for prior actions. For example, they would get tax credits for job creation in the prior year incrementally, based on what they actually delivered.
Taking all this into account, this would have been a super safe path to greater tax revenues, which would have improved the city/state as a whole. I hope as a next step Amazon considers cities in other parts of the country, away from blue coastal cities. Economic revitalization across a broader slice of the political/ideological/cultural spectrum can only be a good thing.
So massive amounts of corporate welfare and blatant handouts aren't enough? AFTER doing that, we're also supposed to play nice and continue to say good things about the most massive, powerful corporation in the world or else they will just take their ball and go home?
This whole thing is beyond stupid, no aspect of this model works for anyone. Just stop.
Good riddance! NYC is already overcrowded. Let's build some subways to non-hipster neighborhoods first, then we can talk about adding more office space.
This is really tragic and foolish. The taxes generated will far far outweigh the tax incentives offered. The local city politicians reversed their positions because they didn't get to bring up their pet projects in the negotiation phase. There is absolutely no reason why the city couldn't use new revenue to protect low income residents from dislocation. It's not a corporate scam -- this is real economic progress for a city with a 43% poverty rate.
Google buys entire city blocks and nobody bats an eye. Turns out that publicly shaking down cities across the US tends to draw out the opposition.
More publicity = more scrutiny = more angry opponents of your business decision
Also, the pull-out letter also basically dumps the blame on state/local officials for not wanting Amazon, despite not all stakeholders being present at the table when discussions started.
#YCFundMeToo
YC Fund "Me Too" -- I think you might want to let PR and HR take a look at this before you move forward with this name.
If Amazon wanted a strong transportation system they could have demanded some of their tax break went towards that. They did not.
NYC is already the second largest tech hub in the nation, as well as a global leader in a wide variety of industries.
If anything, Amazon moving in, and this I doubt, would have made it less affordable than it already was to live here.
NYC population is 08.6M
NYS population is 19.85M
Just the city is forty percent of the population. If you add the surrounding areas, you'll be a majority (I think they'd want things done in the city). How does the city not have better representation in the state assembly? How does upstate keep getting away with swindling the city?
As James Damore recently tweeted: "Amazon abuses its near-monopoly to bankrupt its competitors by selling at a loss, threaten brands with counterfeits until they sell on Amazon, and use third-party merchants’ data to undercut them. All while being subsidized billions by the government." https://twitter.com/JamesADamore/status/1094985319575969792
Honestly, why is this so hard when so much of the rest of the developed world manages to do it so well?
New Yorkers already pay tremendous tax dollars yet we have the mass transit that we do. The idea that there are no tax dollars is a myth. The funds are simply siphoned off to some other who-knows-what, and the remaining is poorly spent. The purported Amazon tax base would have likely been spent the same.
I am not advocating for big businesses evading tax mind you. Just suggesting it would probably still be a boon for the state tax income if a bunch of tech wages migrated to the NY tax base.
[1]: https://www.marketwatch.com/investing/stock/amzn/financials
I'm a nonprofit fundraising professional, and I could probably talk about all the reasons why that is a horrible idea for 2-3 hours straight without repeating myself. I mean, at the very least, it's a bad idea for the same reason that exposing all the financials of every individual, or all other organizations, with the added benefit that you'd be opening people up to harassment for supporting certain social causes or belonging to certain religious groups. You might as well start a government mailing list called "hate crime targets."
If you think there are a lot of non-charitable transactions occurring using charities as a front, it would be a way better idea to just have the IRS audit more 501c3 orgs.
If you are trying to decrease fraud, it would almost certainly make more sense to audit wealthy individuals and for-profit corporations far more often.
There is information in people's finances that should be 100% private. What if an employer looks at the financials of someone applying for a job and sees they claimed $100k in medical expenses last year because they had cancer? Companies will do that if they have the ability, and people will lose jobs because of it.
It doesn't matter if you make it illegal. I worked a recruiting agency for a while, and illegal hiring practices are incredibly common.
https://www.open990.com/org/020716277/the-lebron-james-famil...
A good portion of all of that is stuff Amazon could compile, but they got cities across the country to donate probably tens of thousands of hours of taxpayer salaries to do it instead.
The nature of special incentives each proposal offered - custom ones for Amazon-only, or unusual ones - will also have told them which cities they've got extra leverage over if they come offering a smaller project like a distribution center.
https://www.citylab.com/life/2017/11/the-extreme-amazon-bidd...
> The most jarring incentive reportedly comes out of Chicago, which, under state law, could redirect between 50 and 100 percent of the income taxes incurred by Amazon employees right back to Amazon.
Basically the state law allows employers who create new jobs to not have to pay their portion of the employment tax for a few years, and that tax credit applies to every company.
I'm pretty happy with the way Illinois and Chicago played their cards with Amazon, we were basically like "We've got a lot of great shit, and if you come here you can take advantage of this tax credit." We didn't offer Amazon any special treatment.
Stealing the worker's surplus labor value isn't enough?
A big difference is that contrived drama is at the very core of the entertainment business of professional sports. It makes for much of the entertainment! It's less helpful in the more mundane enterprise of 'building a bunch of offices and warehouses'.
People in Long Island City calling their political representatives and yelling at them about how they don't want your offices and warehouses is not business well done if you have 'building warehouses and offices' as a goal.
First, state income tax is exactly that, income tax imposed by the state, and governed by the state. There may be local jurisdictions that impose additional income tax but any savings there would be trivial.
While sports are important to the local economy, my understanding is that they are relatively minor at the state level.
Second, LeBron (and other athletes) earn playing income in every jurisdiction they play in, not based solely on the jurisdiction that the team is based in.
This means they are responsible for filing taxes in each of these jurisdiction.
In addition to playing income, they make money through endorsements and other investments. These are considered income in whatever state they claim is their residence.
It's in a players interest to establish a residence in an area with favorable tax laws.
Cities may try to woo elite players to join them, but tax savings isn't very compelling.
That’s pretty funny how well settled that area of Law is, and yet again Amazon thinks it’s pretty special in that regard also...historically they haven’t paid those taxes either (state or local) and there was just a Supreme Court case confirming that in fact amazon isn’t special and that all this time they themselves should have been paying taxes where they had been selling/shipping goods.
That’s cute, but not the way the Law works generally. Maybe you can point to a single state where the law is different, until then I’ll just say the general rule is if the merchant makes of $x they are required by law to collect sales tax. Where or not the merchant does, they will be liable to the state for payment of the same, not the individual consumers.
If the law worked the way you represent why would any merchant collect and pay sales tax to the states?
Do you have a citation for this? I'm skeptical. I live and work in Texas. When I travel to my company's office in NJ, effectively earning income for a week in that state, I don't pay NJ income tax on that income.
Edit to add: According to my interpretation of this: https://www.state.nj.us/treasury/taxation/pdf/current/1040nr...
Assuming your income is over $20,000, you ARE required to file a NJ state tax return.
Also, note that even if you don't file a tax return, doesn't mean you are exempted from doing so.
Example, as a citizen of Texas, you are also required to pay use tax on any items aquired out of state/country and used in the state. My assumption is that you don't also pay that either, even thought you are legally required to do so. It turns out that use Tax is particularly difficult to audit and collect for, especially without a mandatory return like state income tax.
https://en.wikipedia.org/wiki/Jock_tax
Uh, state income taxes can approach 10%. This is not “trivial”.
http://www.tax-rates.org/taxtables/income-tax-by-state
The original proposal was that star athletes attempt to negotiate tax incentives with cities, in the same vein Amazon did with NYC (and many other large corporations do).
City income taxes add a trivial percent to the total income tax rate when compared to the state income tax level. Thus, if you got incentives from a city, they would amount to trivial amount of savings.
Athletes would need to negotiate at the state level in order to have a material effect on their taxes.
I hope that clarifies my point.
I imagine Athletes pay accountants who are well versed in how to fill out those forms, and, at least in the NFL's case, a lot of players compensation may be in bonuses, and not necessarily game-day checks (which would be subject to local jurisdictional income laws).
As is common with other, bigger ego, basketball players
Obviously NBA rules relate to tampering would come into play, but it would be a compelling story for the 24 hour sports new cycle.
I've read about athletes at least considering the income tax of a state in their decision, but I'm not sure it's ever been a deciding factor.
Getting reelected will be an issue.
1. Basketball is entertainment, and 'The Decision' was the result of years of speculation by the fans and the media. Furthermore you see similar spectacles for such things as National Signing Day, where top recruits hold press conferences to announce what college they are attending.
2. There is animosity and jealousy towards 'entitled millionaire athletes' that was made worse with players being able to control their own destiny instead of suffering under terrible management. "If they get to choose where to work and do so with their friends, why can't I" yells Joe Six-Pack.
3. The super team. Somehow NBA fans forgot or were ignorant of how absolutely stacked championship teams had been throughout history, featuring multiple hall of fame players and coaches. Elements of #2 play into this as well where it is management, not players, that should build championship teams.
4. A player like LBJ is far, far more likely to deliver (which he did with multiple championships) in the NBA than a company like Amazon is to deliver a value worth the taxpayer dollars they absorb.
https://www.wsj.com/articles/majority-of-new-yorkers-support...
Animal cruelty? There is only a vocal minority who takes a public stance, despite this beeing a very clear cut issue in terms of public opinion. Migration is the other way round: most people don't give a fuck, but have a loud vocal base that will even hurt themselves to make a point and you will be heard.
It's not a vocal minority, it's a vocal subset of the majority.
A vocal minority is when the opponents of a popular viewpoint are louder than its proponents.
The Most Intolerant Wins: The Dictatorship of the Small Minority https://medium.com/incerto/the-most-intolerant-wins-the-dict...
[0] https://news.ycombinator.com/item?id=16454645
I see the same thing with the Amazon HQ. It's easy for Amazon to spin it in a positive PR direction by talking about jobs and increased revenue, but the policy case for giving in to Amazon's demand is actually weak.
https://hbr.org/2018/07/landing-amazon-hq2-isnt-the-right-wa...
They're not "ok" with the level of cruelty but in a pervasive environment of limited culinary and social choices, they're okay with living with that knowledge.
Personally, I think you get further raising better people than trying to impose a moral standard in a population that (for the most part) eats diets that hamper cognition and volition ala high sugar and ultra processed crap. Intermittent fasting and a decent diet would do much more for the quality of moral calculation of people than telling them that their entire culture is morally bad. Because we're humans who utilize different strata of values, not mere moral robots.
To paraphrase Nietzsche, the moralists and priesthoods of the world devalue the very small things which give arise to moral judgment: Diet, climate, and habit.
> Definition of proponent: one who argues in favor of something
Even if people are enabling something doesn't mean that they are proponents. Let's stop with the newspeak and use the correct words for things please.
[0] https://www.merriam-webster.com/dictionary/proponent
Not everyone has the money to choose differently.
At times there is no choice. This is especially true if you are a 15 year old. At 15, you basically eat what your parents eat. You can't generally afford food. You can't always just get a job if your parents won't provide education and/or if your school decides your grades aren't up to working. Oh, and you can't work all that often due to child labor laws.
At times, the actual choice is a bad one. Take eggs, for example. When I have the choice, I choose eggs from hens with larger cages. I realize these are hardly large, but they are better than the alternative. I've only lived one place that I could buy eggs directly from the source (during summer time) - but I'm literally an ocean plus some away from that now.
People honestly need a little bit of animal proteins lest they must take supplements. (Truth: I take vitamin D, as I can't make enough at my northerly location). I'm also mostly vegetarian. I eat fish once a week and I eat eggs and cheese.
An unrelated example: polls show large supermajorities in favor of many gun control proposals (universal background checks poll at ~90%, for example). But most people who say that they want it, don't consider the opposite stance on that a deal-breaker for their vote - there are many other issues that are more important to them. On the other hand, the 10% that is opposed, is very firmly opposed, and that issue is close to the top for many of them, to the point of single issue voting. And when those people all turn up in the Republican primaries and vote as a bloc, those votes are enough to prevent candidates that displease that crowd from even getting to the general. And so you have all those party line votes, with every single Republican voting against, even though the majority of their constituents - and even the majority of their supporters - would prefer them to vote differently.
When people think animal cruelity they think beating your family dog vs the state of factory farming or organic farming.
I've been thinking a lot about trying to purchase pasture raised and sustainable meat products lately and part of that has been buying pasture raised eggs.
My last incredibly priced carton actually included a little slip inside with pictures of the hens in their pasture, and I believe even an offer to visit their farm.
Was really nice to go the other way. Instead of thinking about or ignoring the cruelty, to think about these happy hens.
But damn is it expensive!
Also, the way different accounts seem to seamlessly continue a deep and tangential discussion thread is also kind of suspicious. Almost like it’s one person who keeps switching alt accounts.
Regardless of peoples eating lifestyles it's undeniable that factory farms which produce most of the economically accessible meat are little concerned about animal welfare or the environment. The public on this matter also are least concerned about these matters related to the meat they buy off supermarket shelves, only when it's a video of a 'cute' animal being abused. It is only the minority of people in this instance that take a principled stance, if the silent majority did care we wouldn't be producing so much factory farmed meat after years of publicizing the abuse in the media.
I'm not a vegan but the way you characterize anyone who has a 'minority view' as some radical that only wants to cause problems is the attitude that allows corporations to operate it's abuse of worker standards and public funding to no one else's gain but themselves.
The discussion would have been clearer if the unambiguous term "factory farming" was used instead. The use of these ambiguous and disingenuous tactics of argumentation is reminiscent of PETA in particular. If you don't want to be characterized as a nutjob, don't act like one. That's my point.
Either someone shared with you an out-of-context link to this subthread for brigading purposes or you’re being totally disingenuous right now.
For myself (and maybe the others), your responses jumped one step beyond reasonable. Because someone used animal cruelty to describe factory farming, that poster is a hyperbolic vegan? I think the fact that you were being hyperbolic incited a few extra replies due to the... irony?
Edit: Cats are obligate carnivores and can't physically remain healthy without eating meat.
Migration meaning what? Immigration within the US? That's been a hot button topic since the first Bush nationally, and has been the source of propositions in California since the my first memories of the early 80s. Interestingly, the more the internet was adopted, the more high profile the immigration debate became, nationally. Clinton talked quite a bit (even after his presidency), Bush Jr ignored it, and so on.
Reagan passed landmark immigration liberalization in 1986.
Clinton was an immigration hawk.
https://hackinglawpractice.com/blog/20-year-law-signed-conti...
GWB fought hard against his own party for immigration reform and liberalization.
https://www.reuters.com/article/us-usa-immigration/senate-ki...
That is, in itself, incorrect.
> Reagan passed landmark immigration liberalization in 1986
Yes, bringing it to the forefront, but without a way to communicate effectively, the party in power passed landmark legislation without a national consensus. Most people were unaware, until it passed and had no recourse after.
> Clinton was an immigration hawk.
I'm not sure what you believe, but that's incorrect, imo. He gave strong lip service in "securing borders" but was instrumental in toothless legislation that paved the way for the current passive acceptance alongside the tripling (ish) of the illegal immigration. The insistence that legal immigration continued to outpace illegal immigration year-over-year before and after his presidency is classic Clinton doublespeak meant to push an agenda by interpretation, which he maintained after his presidency. See his last John Stewart Daily Show appearance. Winners write the stories, so this will likely just be forgotten by the future.
> Migration is the other way round: most people don't give a fuck, but have a loud vocal base that will even hurt themselves to make a point and you will be heard.
GWB's reforms were not well supported, so the initial point I made stands, regardless of what was reported. The idea that GWB was doing anything but appealing to a wider base. What he did, was speed up deportations (ending catch and release) and stopped talking about it after his election. So you can interpret that how you will, but it certainly wasn't "fighting hard".
So who makes up this supposed groundswell of local opposition? People that moved in to one of those shiny new towers last week and are already looking to slam the door behind themselves?
Besides this sniffs of the "yea build shelters everywhere but my block" attitude.
Because the entire "competition" was a sham. Amazon was never going to park the future of the company into a place lacking talent.
> The proposal was most popular among Black and Hispanic Queens residents and least popular among White Manhattan residents
That's a good point, but the counter is that the Black and Hispanic residents are the ones who would end up pushed out by Amazon's white and asian workers.
Surprised AMZN had such a thin skin.
And after all this, they are going to move into vacant office buildings in DC near the airport, and in Nashville.
Instead they got a pretty massive backlash that adds more fuel to the already burning story about Amazon's mistreatment of workers, Amazon's 0% tax rate, Amazon lobbying defeating taxes in Seattle, etc... They have a PR problem already. They are bringing a whole lot of negative attention to themselves. They will have it worse in the future when they try to do the same sort of thing in Washington state.
They folded because staying in wasn't worth it.
No wonder Gianaris, who represents our district in the NY Senate, was such a strong opponent.
Looks like you do, because now we have - no discount, no business.
> It's not like the economic development of NYC is dependent on Amazon
Of course, losing several billions of added value and 25K jobs won't kill the economy of the size of New York. Just as shooting oneself in the foot won't kill most healthy people. But keep at it, and sooner or later there would be a surprising development that the health is not what it once was...
Not the business that was conditional on the discount.
https://www.nycedc.com/program/relocation-and-employment-ass...
https://www.nycedc.com/program/industrial-commercial-abateme...
It doesn't make a lot of sense for a city to offer incentive programs and then complain when companies attempt to use them. The city should make up its political mind about what incentive programs are available, and who qualifies for them, as part of the decision about whether to offer such programs. Programs should then be implemented neutrally, in a way that does not play favorites or pick winners and losers. Many other companies have benefited from these programs - the entire point of these programs is to achieve some kind of policy objective by being used.
The uproar in this case seems more like political brinkmanship, not any kind of sound economic policy designed to benefit the constituents of the city. These incentive programs were presumably passed in the first place to benefit constituents - that's why they're there, to attract additional investment to areas of the city that otherwise would not receive it. ("The Relocation and Employment Assistance Program (REAP) provides a refundable business tax credit for commercial and industrial businesses relocating to designated areas of New York City and making capital improvements to their space")
If people in NYC think that these incentive programs are a bad idea, harmful, inappropriate, or whatever else, then they should direct their anger at their political representatives, and cancel those incentive programs - not direct anger at the companies who take up the offer that the city put forward.
The first is likely, the second is very unlikely. For the simple reason that Amazon would not plan such project in a market that is so hot that is able to generate tax income at the same rate as concentrated investment project of the Amazon HQ size. Surely, it won't turn into a barren wasteland, but I would not expect it to produce more in tax revenue than big development like Amazon HQ would.
When I was 16 LIC was a pretty sketchy place, but as of a few years ago when I lived there it was completely different. There is still some light industry related to food trucks and taxi cabs, but you have to walk pretty far to get to anything more significant. The only sketchy area I can think of is the Queensbridge projects but that is north of the 59th st. bridge and pretty far from the rest of the neighborhood.
A business choosing a location is a business transaction, as is city taxation choices. Both can freely choose how to woo the other.
NYC chose to lose possible decades of high paying jobs over their unwillingness to deal.
Other cities are not so fortunate, but Amazon has no interest in truly desperate cities (or even cities that are not so desperate but could use the boost, like Newark and Baltimore).
Amazon’s role is not charity. It is to be as productive as possible. NYC does have the role in being a good steward of resources for its citizens. It threw out a lot of money and job for them due to a vocal minority.
https://hotair.com/archives/2019/02/14/amazon-kills-plan-bui...
Even after reading this, I think the claim “most New Yorkers supported the project” is extremely dubious.
Amazon could have easily ignored them for all eternity if they wanted. A vocal minority can't influence a random housing development, you think they had any say over Amazon? That's a STRETCH
The opposition is because of the Massive tax breaks and other $$$ giveaways New York was going to hand over to Amazon. I don't recall Google extorting NYC for $$$ before they decided to expand....
It's not like NYC is paying Amazon to come to NYC. NYC would still make huge tax revenues from additional sales, real estate, income taxes, and corporate taxes.
Now they're turning that all away. It's such an irrational decision that if I were Amazon, it would raise a big red flag for me as well.
No need to open in a community that doesn't want your money.
"that otherwise wouldn't be paid at all"
The opposite is true, 100% of those taxes will be paid by some other business. Maybe you could make your argument about the New York City of the 1970s, but you sure as heck can not make that argument about the New York City of 2019. New York City is not starving for investment, rather, its biggest challenge nowadays is managing its fast growth. Other businesses will move into those buildings, and hire those workers, and they will pay normal taxes, which is a lot more than what Amazon offered.
And would the employees of these businesses earn on average equal to or greater than the average NYC Amazon employee?
These aren't rhetorical questions, and I don't know enough about Long Island City to have a confident guess at the answers but when evaluating whether Amazon HQ is economically a net positive, these are important to know.
Does it matter? If they earn enough to live and spend locally then isn't that good enough?
Some Amazon employee giving a developer an extra 1000 bucks a month for a luxury apartment and getting their food delivered instead of going to the store isn't exactly an amazing economic benefit.
Obviously not all 25000 employees would get an extra 1k, but the point being...these things can scale significantly when you're talking about Amazon. It's not a trivial thing for SMBs to fill the void that Amazon is leaving.
Can you explain this some more? Are you suggesting that governments establish a target figure and adjust that year's tax policy to make sure it's met?
The existence of budget deficits suggests otherwise.
They are just suggesting that the site that Amazon would have occupied will be rented by some other business. Probably, that business will not have gotten all the tax-breaks that Amazon did. Therefore, the tax collected by NYC on that space will be larger with Amazon gone.
Also, pretty crappy to get downvoted for an honest question.
That being said, businesses, like people, should have equal protection under the law. I amazon gets a sweetheart deal, every other business should too.
But mostly, it's obvious growth that looks good for politicians who can say, "look, I brought jobs!" People notice it when a high profile company arrives whereas if your local chain expands, that's not even a news story.
Much of the political aspect of economics is due to the relative visibility of various events in the media.
This is New York City. There will be other businesses—ones that don't need to be lured by special deals.
https://www.nytimes.com/2018/11/13/business/economy/amazon-h...
NYC was basically offering the same thing to Amazon: "hey come live in our city, we will give you a temporary tax reduction, in exchange for a TON of money over the next X years".
Overall the city wouldn't have lost money, it would have gained many billions of dollars of additional money in the future in exchange for an initial 2 billion reduction.
- Come next year, the default position is "you get a 10% rent hike by just paying the number on the lease."
- if you leave after a year, I've got price history at $4000 a month and can use that as an anchor for negotiations with the next tenant
There's nothing that says I have to start from fair market value and take a month off either. Say I call the apartment price 12/11ths of market value, but then advertise the net number and each month your great deal lets you pay only 11/11ths of FMV.
Bloomberg had something about this today[1] - something like 45% of leases in NYC have similar concessions.
[1]: https://www.bloomberg.com/news/articles/2019-02-14/manhattan...
A 5 second Google search shows hundreds of results for 1 month free rent in apartment listings.
What exactly are you contributing to the discussion?
NY is a shell of what it was in 2005/2006. Yes, there are more tech firms, but the 500,000 or so jobs lost after the financial collapse in 2008 have not been made up for. I welcome Amazon bringing in well-paid positions, because as a New Yorker, I'd like the city to support a middle class, not just wealthy foreigners parking money into LLCd condos staying empty.
Much of the gentrification could be due to the free money and ZIRP policy in the US -- it is cheap to borrow and thus people, especially wealthy people/corps, borrow heavily and raise prices and rents. There is little correlation between actual income and rents in NYC because of this external booster.
Wouldn't it be better if the source of rent increases in NYC be the presence of lots of well paying jobs?
However, I think we can do better than giving massive tax breaks to megacorporations with bad records on labor relations and what has seemed to be an adversarial relationship to government and public services. I have no interest in seeing a replay of what’s happened to SF in NYC.
I think it’s important for cities to stand up for the interests of all their citizens, not just software developers and product managers (etc) in negotiations with increasingly powerful tech companies.
I believe OP is right that the month's free rent offered on an apartment is recouped by the landlord: in the form higher rents, which have become a real problem for many people born and raised in the city and which would likely only be exacerbated by Amazon's setting up shop here, especially under the conditions offered by the city.
Over the past 20 years New York has experienced an influx of wealth without commensurate investment in public services. The MTA is dying, urban blight is spreading and many of the new professional class moving here don't seem bothered by it.
Another piece of "anecdata": walking down Bedford Ave. in Williamsburg a few years back, I heard one wealthy newcomer say to another that she couldn't wait for the local pharmacy across the street from the new Duane Reade to close. Maybe this anecdote doesn't have the force of a "real data" but it may help some people on here understand why New Yorkers aren't thrilled by the prospect of a building a big Amazon campus and welcoming them with a handout.
https://harpers.org/archive/2018/07/the-death-of-new-york-ci... Unlike the author of this article, I'm not averse to my city changing, but I'd like to imagine something other than the change we've been seeing...
I'm not gonna lie, I'm part of the gentrification problem over the last five years, but to be fair New York gentrified me at the same time that I helped gentrify the neighborhood. I only made about 30k a year before I moved to New York and I lived in a trailer home back then. After moving to New York I got a few different tech jobs and now I live in one of those over-priced one month free buildings.
I share my story just to say that in my perspective gentrification is a complicated system, and like you I also have a personal stake in all this. In my experience working in tech in New York has been a huge opportunity to improve my life. Amazon would have offered roughly another 25k people such an opportunity, some of them would have been newcomers, and some hopefully long term NYC residents. I can't lie, some people might not have benefited as much as others, but at least those 25k would have been able to get the same opportunity I did when I moved here.
You should also recognize that many people would be actively harmed by it, not just "not benefiting as much as others".
Whether the benefits outweigh the harm is a question I can't answer, but even if they do, it's still true that people are hurt.
None of these issues are easy or clear.
I live in that part of Seattle. It's the same part where people want to ban all cars because they never have to go anywhere that isn't walking distance, and their dog loves walking.
"One month free" is one of the oldest tricks in the NY real estate book, along with "preferential" rating.
[1] https://www.duluthnewstribune.com/business/technology/430953... (The estimated recoup time is 25 years, which means the plant will be obsolete before the state sees a dime of net revenue.)
That is fallacy of excluded other possibilities. Especially for a place like NYC.
I generally like AMZN, nevertheless I'm happy just on sheer principle that the bullying behavior by the 800lb gorilla didnt succeed this time.
It is exactly like a pushy customer demanding a discount on their groceries, saying: "Well, if I don't buy them you won't get any money at all!"
If you are confident you can sell enough groceries at the regular price, the economically correct decision is say "I don't need YOUR money" and laugh in their face.
Guaranteed sale is nice, but if I think I can clear out those cars pretty easily without a discount I'm gonna be a lot less inclined to do it.
https://www.uscis.gov/eb-5
And schemes like these exist in most countries out there, it's not just a US thing.
In your original example, the only reason why it would ever make sense is if the Saudi prince in question can somehow produce more wealth for the public than they'd pay in taxes. In that scenario, it's exactly the same in the end, once you balance everything - you have sold them citizenship for money.
And if they don't pledge to earn you more than you'd save, then why would you even consider such a deal?
What's irrational is not following up by banning every single deal of this type. Every single one.
The US and NYC specifically is approaching historic levels of inequality. If you want to reverse that you have to say no to giving one of the most powerful companies in the world a sweetheart tax deal. If NYC doesn't say no then who will? The scuttling of this plan doesn't reflect a lack of rationality. It reflects different priorities than you have. The more powerful Amazon gets thanks to these sweetheart deals the more leverage they will have and that can mean negative consequences for the populace.
Why even pick NYC in first place ? That place, and other 1st tier cities, are red tape hell. Amazon should have known this.
If you can get high-tech companies who are willing massively expand to create lots of GOOD JOBS without have to short $3 billion from the state budget, that might mean that the $3 billion dollars was a total waste and boondoogle....
No they aren't. They're expanding by about 7000.
If you're implying that Google got tax breaks, and no one noticed the public data confirming these tax breaks, please provide evidence of the data that has been overlooked.
Show me the public data source where I could conceivably find that out and I'll do "please provide evidence of the data that has been overlooked". Because I don't think that data source exists.
I don't think you realize how opaque tax records are in many places. You seem to be implying that there is a way for the public - or even journalists - to acquire the tax and assessment information of individual companies. Attempting to do so is considered fraud in most jurisdictions (e.g. attempting to use a FOIA request for the personal information - including tax records - of someone else or a business of which you are not an officer).
You are saying if I bought a piece of property and paid property taxes on it, that all of my business taxes would suddenly show up in the property tax records?
Here's an article discussing the topic at large[0] (and Google is one of the beneficiaries here).
[0]: https://www.theguardian.com/cities/2018/jul/02/us-cities-and...
Yes, this is common. But just because it's common doesn't mean it's right or should be allowed.
But public does not like it and hence they had to put together a fake plan and waste money. Which could have otherwise gone into preventing real crimes.
More like it's a sugary pill that gives you diarrhea that also does nothing useful.
Unless it's for a football stadium.
You haven't seen the perpetual and energetic fights in my part of the nation about public funding for football (and other professional sports) stadiums. Sports businesses trying to get tax money to be spent in order to enhance their profitability is absolutely something that brings out the opposition.
So Las Vegas gave them a lot of money.
(Granted, Newark is in NJ... and the proposed tax deal was from NY. Thinking as adjacent states instead of a region bites.)
Football stadiums get subsidized because football is extraordinarily, wildly popular with most of the people that pay taxes. Those taxpayers spend massive sums of money on sports every year, across the NFL / MLB / NBA / NHL / MLS / NCAA. Those people pay most of the taxes that fund the government that then pays for the stadium subsidies.
Taxpayers love sports, love spending money on sports, and the majority of taxpayers are clearly fine with subsidizing sports at all levels. They vote with their dollars and... votes, over and over again, year after year, decade after decade, to keep supporting sports subsidization.
See: football attendance and ticket spending on NFL and college games annually, as well as sports packages for television, merchandise sales, etc.
Sports are very popular, and stadium-lovers are vocal with their representatives.
But they are an outspoken minority. The majority of tax-payers do not support subsidizing stadiums.
And stadiums will get built regardless of whether the city gives them free money, because they're profitable. So why subsidize private profits from public coffers?
Stop Padding Billionaires’ Profits by Paying for Sports Stadiums
https://ritholtz.com/2018/07/stop-padding-billionaires-profi...
So it's absolutely an expansion of a similar scope.
In short, yes, they would have signed a contract stating that.
That type of payday might be worth a bit of scrutiny.
That's not peanuts.
Also, if your problem is large tax breaks for corporations, the focus should be on those programs that make available the other $2.5B available, since any corporation with a similar scale project could get that. Focusing specifically on Amazon distracts from the existence of these programs and whether that existence is a good idea.
As an aside, your snarky tone detracts from your comment and hurts the discourse.
IRRATIONAL left. This investment on the part of Amazon gave way way way more to the city than it got back in subsidies.
It's kind of ridiculous. If I were Amazon, I would drop NYC in a heartbeat if they didn't appreciate that degree of investment.
The subsidies were 1.525 billion. Amazon's investment was expected to be around 2.5 billion. Only an irrational fool cannot do that math.
What is the long term effect of having government hand out money to every business that creates a hype? What is the effect of the amount of similar deals that will inevitably get hyped?
Should you play the game at all? Is it reasonable for someone to come along with this kind of deal? Is there no sense of fair play - that all corporations should be treated equally - whose logic is outside of the simple arithmetic?
The simple arithmetic that you are suggesting can potentially lead to unpleasant situations. What if the opposite were to happen? Supposed some big firm like Google decided to ask the government for money, or else they leave and sack every employee who doesn't want to go to their new location?
You could have firms queueing up to present you with new math problems.
It would generate property tax (if not abated) and income tax for the workers (both hired after the fact, and hired to complete the construction), but at what percentage of the total investment? 10-20%?
Was it highly subsidized by taxpayers like Amazon's purchase would have been?
It's not like Amazon was getting CASH to move to NYC.
If Amazon required all bids and contracts be made public AND brought in the media circus to invite scrutiny that would seem to be the most in the public interest.
The big dog and pony show was about asking for major tax benefits. They're still welcome to open a giant LIC office, they just won't get showered with a tax windfall for it. That's Amazon's decision that it wasn't worth it.
Also, "nobody bats an eye" is not right either - there are tons of protests against Google, which has been widely reported. They just didn't have a focus point like Amazon did, but if any city had a wide contingent of young socialist politicians caring about PR much more than for the jobs for the city population - the same could happen to Google too.
Unless you're Elon, then it's celebrated.
Shaking down someone for money is done by threatening them, i.e. extortion. Amazon did not threaten NYC, and therefore it is not a shakedown.
Im not sure what the point of any of this was.
It would also be in Long island City which would provide a huge influx of new workers and move that neighborhood forward in development rapidly. The down side would be that it would push some residents and business owners out but this is simply a fact of life in NYC where on a long enough time line every undesirable neighborhood eventually become desirable simply because of increase in residents and increase in real estate prices. That would also conversely make adjacent neighborhoods more attractive.
As for the tax breaks those would eventually be off set and it would still be cheaper than the amount that was spent on a useless Subway line that took a decade and really added no real capacity where it mattered.
In fact they tore up an existing redevelopment plan for HQ2
The bottom line is that the Amazon deal had very broad support in NYC, and a very vocal irrational minority just ruined it for everyone.
Although I hope that it’s a bustling tech hub in 5 years.
My comment is about tech workers working in that area. I think this is better for that area to have highly paid workers in remote queens who can live or commute in.
There’s already a ton of tech companies in Manhattan and Brooklyn. The new change would be to have a tech hub in LIC.
On the contrary, much of what makes Queens quite unique is threatened by the one thing we know would follow on the heels of something like an Amazon HQ landing here: even more heated real estate speculation fueled by absentee capital, small businesses losing their leases, rent hikes, and general homogenization.
Nothing about Queens needs to be preserved in amber, but neither does anything about Queens require some intervention to bring up to par. Possibly public transit but that is true of every borough.
Certainly it will increase property values but I don’t think it will be absentee capital as the demand will be driven by something that requires occupancy, working at hq2.
Maybe Queens doesn’t require intervention, maybe it does. Since there’s no hq2 we’ll close to seeing the contra factual of not having this intervention. Maybe the area grows substantially without it.
Anyway, for me it hinges on how much special treatment Amazon got, $100K in tax abatements per job seems excessive, but others say it was pretty standard, would have been a huge anchor tenant for NYC tech and LIC, so much smoke blown on both sides it's hard to say ¯\_(ツ)_/¯ .
If they want to sell and support AWS to bigcos in NYC they are going to need a major presence regardless, not sure how much sense it makes for their other businesses to have a big HQ in NYC.
It's possible to be both at the same time.
That's before other taxes, like property (directly or indirectly through rent), sales, etc.
They don't need 25k jobs to support AWS clients in NYC. It's not like they're supporting on-site installations.
The jobs also tend to include things like construction workers, etc. So if you hire 500 people to build the place over 2 years that's 1,000 jobs created.
The USA already has a tax structure in place. Amazon could afford to pay the existing taxes if they wanted to. Heck, they're paying their tax accountants to figure out how not to pay those taxes. Why doesn't Amazon just buy, say, Nebraska, and set up shop there?
But first, getting rid of the corporate capture of both major political parties, elected officials, government and policy-making is a precondition to do anything to reverse the neoliberal, cannibalistic anarcho-capitalism inverted totalitarianism being forced on us.
Im not saying its wrong, but us muggles worth less than countries have no real, meaningful say in the future at this, and to be fair also at most other, points in history.
The Occupy Wall Street movement was probably the last possible chance to correct course. Further attempts need to somehow capture a greater mindshare than the immediate aftermath of Bush's imperialism, wanton greed and corruption throughout the federal for thirty years across four presidents, the desolation of the working class, and the unabased billionaire wellfare that bailouts represented.
We are now a decade later into corporate and wealth consolidation, a decade after Citizens United, another decade of corporate media brainwashing the "average" American into compliance and obedience. And this is a global conglomerate of business that will deter and influence all governments and societies to bow to their interests. The only way out at this point is an internal struggle between these private men and women of influence between those who have ethics and the interests of humanity at heart and the majority.
And it's in Long island City not in Manhattan like Facebook and Google.
I just don't understand this argument. It's like "Someone's gonna get fucked, so I'd prefer it be me."
That tax break is real money. Money that your community will not be able to spend on education, infrastructure, police, parks, all the things that make a place worth living in. Why would you hand that over to a company that doesn't need it?
Sure, but it's real money that your community doesn't get either way.
You're living in a fantasy world if you believe that the choice was legitimately between "Tax money and 25,000 jobs" or "No tax money and 25,000 jobs." No, the choice has always been between "No tax money and 25,000 jobs" or "No tax money and no jobs." You're not getting the tax money either way. Either Amazon builds with subsidies and you get no tax money from them, or they go elsewhere, and you get no tax money from them.
Your decision is really between "Do you want 25,000 jobs, or not?" 25,000 jobs whose incomes that can be taxed. 25,000 jobs that are going to shop at local stores, pay for local gas, pay local rents, raise local property values, and so on.
And that choice is pretty damn clear.
Except that's not the choice either - as others have pointed out. If Amazon doesn't build something in NY, some one else will over the same time period. Will it be more or less than 25,000 jobs? Who knows. But NY is already an attractive metropolitan area judging by its density and property value. It's not a struggling rural town that can't attract talent and capital.
All those things cost money. Usually, that money would come from taxing residents and local businesses. But given that we've agreed that the city wouldn't be getting that money, it's not at all clear that those 25,000 jobs would be a good thing.
And almost certainly because of this struggle, the next City they try and go to isn't going to give them nearly as sweet a deal. They will demand more. Struggles like this are effective.
So no, that's NOT the choice to be made. That choice is something you've pulled from nowhere.
Another way would be that only taxing the jobs, and all the economic activity they might generate would still not cover the strain that the company would put on the local system.
Now they need to start taxing Wall St. heavily.
The talent required is not evenly spread throughout the cities that bid on HQ2, and a world-class city like NYC does not need Amazon as much as Amazon needs them.
Well why is trusting you to build parks better than just spending your tax money on parks? Why do we need a new indirection in that process?
You run a store. You put up a sign offering a 50% discount. I walk in the store and you tell me there is no discount. I walk out. Guess what? You didn't get any money and I didn't get anything out of the deal.
Amazon backing out of HQ2 doesn't mean you get to keep the money. You never had the money.
That's more like what they were going to do.
Think of it this way. Walmart doesn't pay some of their employees enough to survive, so those employees get food stamps. Walmart makes enough profits to pay those people the equivalent value in food stamps, but they don't. It can be said that the government is giving Walmart some amount of money because Walmart's profits are higher because of the food stamp expenditure.
The federal government is not sending money to Walmart via a bank transfer, but there is an exchange of money taking place.
Now think about this in terms of city services. Twenty five thousand employees would not pay enough taxes to make up for what they use in city services combined with what the organization uses. Certainly not 3 billion dollars worth. In that sense, the 3 billion dollars could be seen as NY basically paying Amazon to give 25K professional class people jobs. There are other social side effects that are hard to assign a dollar value to.
Does that make more sense? No one is saying that money would come from no where. It helps if you assume for a moment that your ideological opponents are actually smart people who aren't just deluded, but that they have an interest that is actually in opposition to "your side".
Regardless of what Amazon does, a for profit company is going to receive those tax breaks. They are available to anyone who meets the qualifications.
So it isn't "handing over" anything that isn't going to be handed over to a company already.
https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...
I'd rather have money go towards our public transit system, no matter how fucked up it is at the moment, than spend another cent on bringing tech jobs that will come here no matter what. NYC's been a "true technology hub" for a long time, regardless of one giant company deciding to abstain from coming here.
Increasing density isn’t going to make subway lines cheaper by the way.
Evidently not. Their tax break in Northern Virginia was not nearly as egregious (northern VA resident here; I'm totally fine with what we're paying for what we're getting). By contrast, what they were getting for LIC was insane.
And by not having anyone else lined up and by looking at the backlash over the size of the tax break, I'd be surprised if anyone else approached that amount, so it doesn't look like they'll get that tax break regardless.
You're just letting the giant school bully take over your neighborhood for below market value (due to the massive tax breaks) and declaring "Look! We're a tech center!"
I don't see how "below market value" follows from "massive tax breaks". Are you implying that the standard tax rate is somehow determined by the market? Because it's not, and "market value" is whatever the market is willing to pay for it. Unless they have someone other than Amazon offering the same benefits for less, then Amazon offer was market value.
Not paying Federal income tax isn't paying no taxes. Also, the "zero federal tax" meme is popular among the Bernie Sanders crowd, however, much of Amazon's credits were due to paying stock-based compensation. In 2017, they paid out almost a billion dollars in stock compensation -- compensation for which recipients are taxed -- and taxed at a higher rate than the equivalent funds would have been taxed if retained by the company since such compensation is taxed as ordinary income -- not only are federal income taxes due, but also social security and medicare taxes. The point is that $917 million in stock compensation was written off against Amazon's income, but that $917m likely yields roughly $250 million in federal tax revenue , while if that were taxed as company income, it would yield roughly $110m given the historical effective tax rate paid by Amazon.
Essentially this: If Amazon didn't exist, the US government would be far worse off in terms of tax revenues, despite Amazon paying "zero" taxes. An intelligent view of the situation wouldn't look at "federal taxes paid" by the entity of Amazon, but their total tax revenue impact on the United States government -- including their state and local, and taxes paid by their employees. If you wanted to be more intellectually honest about Amazon and taxes, you'd also include the tax impact of everyone that profits as a result of Amazon. There's also the impact at the consumer level -- the price of products is the sum of all of the inputs used to produce, market and deliver that product. If you raise the price of any of those inputs, prices necessarily increase. Let's say we increase the taxes of Amazon -- that means that their "Hefty Garbage Bags" are now selling for more money, but that also means that competitors selling Hefty Garbage Bags can also raise their prices. Essentially corporate taxes have the same market-wide effect as a tariff -- raising prices for everyone. Who gets harmed most by higher prices for consumer goods? It isn't the "rich." It's the poor and middle class. Lower prices for goods helps the economy far more than the equivalent amount collected in taxes due to deadweight loses.
This has certainly been true for Seattle, fwiw.
Claiming that they are simply because they want to expand and hire into their market does not result in successful outcomes for either party.
Those people might not currently be in NYC, and they might have moved to NYC to work for Amazon. NYC would have received more income tax revenue if high earners moved there from somewhere else.
Her argument against is that the Amazon HQ would further gentrification and she was appalled by the government subsidies. So she'd rather limit new growth, prevent new jobs, and stifle wealth to prevent luxury condos and Starbucks from going up? Make no sense, she is literally preventing her constituents from moving up the economic ladder.
So, what's the benefit to new york? Yea, there are 25000 new jobs. But the choice isn't 25000 jobs or no jobs. Its 25000 jobs with amazon and some number of jobs from other businesses. Other businesses will employ those high skill workers because there aren't enough to go around.
But I'm sure the students are actually grateful that they were spared from Amazon and living close to home, and that the Bay Area residents will continue to welcome each new batch with open arms!
The NY metropolitan area is ~20M people, but it's clearly much weaker when it comes to tech than the bay area at only ~7M people (I'd say, a magnitude less in number of tech startups alone), and somewhat stronger than the Boston metro area at 4M but not significantly so. Having lived in all three (and now living in Manhattan for 4 years), I don't think for example there is significantly more tech meetups (maybe even less?) or startups (definitely numerically more, but not of better quality) than in Boston, while by numbers alone it should be a whole magnitude greater.
Is this any different from how other companies do it?
> they'll be taking jobs from other organizations, like small businesses, who can't afford to compete with Amazon.
How many small businesses in LIC are competing with Amazon for business/workers? Does LIC even have tech jobs? I lived in NYC for 5 years working in tech, and I don't recall ever interviewing for a tech job in LIC.
> So, what's the benefit to new york?
25,000 jobs with $100k+ salaries. I get that there aren't enough native native New Yorkers to fill the jobs, but since when is NYC not a city of transplants? Amazon or not, this is already the state of things, and I don't see that changing. I mean LIC is already a ghost town of glass luxury residential apartment towers.
> the choice isn't 25000 jobs or no jobs. Its 25000 jobs with amazon and some number of jobs from other businesses. Other businesses will employ those high skill workers because there aren't enough to go around.
Is there a strong demand to build out jobs in LIC matching the 25k that Amazon would've? I'm not being facetious, genuinely wondering. I only went to LIC a few times, and my impression was that it seemed like a ghost town of glass luxury residential apartment towers. I don't recall seeing a thriving office/commercial center. Seems like everyone just commutes into Manhattan to work.
Increasing property values also mean increasing property taxes, which show up in expenses and are due every year whether or not you have the money to pay them.
Does taking out a home equity line to pay your taxes sound like a good idea to you? Me neither, and that's why rising property values are often not welcomed by residents who are not already financially well-off.
This does not even get into the impact on renters, who might face being evicted so a property owner can sell, or rents rising faster than their wages.
Property values are not necessarily wealth. It is entirely possible to gentrify existing homeowners out of their homes despite increasing their property values -- this moves homeowners down the economic ladder.
Yes, selling their house technically puts fresh cash in their pocket, but only by drastically increasing their cost of living and by making them search for new housing (which by definition will have to be somewhere cheaper than their current neighborhood, since by definition they can no longer afford their current one).
All of this is usually a large net loss in total wealth, despite the sale of their property. Owning a gentrifying home gives you the illusion of wealth building, but if you live in that home, it's really just lifestyle inflation until you sell out.
None of the above is a hypothetical, either. That is an accurate description of how real-world Gentrification usually plays out in Midwestern/Flyover USA today.
Sounds like it'd be good for landlords, I'm not sure about the person living paycheck to paycheck to make rent.
Amazon is not that pedigree-driven, most people I know who work there went to decent mid-ranked but not Ivy League level schools. Wall Street (front office) and big consulting firms are literally pedigree driven to the point where they often only recruit on Ivy League campuses, Amazon and most other big tech companies are more egalitarian caring more about the tech interview than your diploma.
People have done studies on income mobility and inter-generational income mobility. The studies say that it's getting worse, not better.
Yes, people can move up/down, but most don't, and it's happening less over time.
Most of the research I've seen uses quintiles as a proxy for "class".
If you look downthread, I've linked some that disagrees with you re: USA vs other anglosphere countries.
Anyway, I don't have the resources and time to go through the entire Forbes list, but I suspect there are a lot more people than most would believe and perhaps like to acknowledge from middle class or "lower" class environments.
Income is a strongly inherited trait. Look at this absurdly linear plot in section 2: https://www.brookings.edu/blog/social-mobility-memos/2018/01...
The only deviations from pure correlation are that the extremely poor and rich are EVEN MORE likely to be extremely poor or rich.
she's anti status-quo but are unwilling to sacrifice short term for it.
basically her dream case scenario is to tax amazon 5B and then invest 3B it to bring them to Queens.. and then rake the returns going forward. In what fantasy world would that ever play out?
"...Amazon employees are apparently eager to get a head start on the New York City real estate game.
Condo sales in Long Island City are soaring following the announcement that the Queens, New York, [a] neighborhood will host part of Amazon's HQ2, The Wall Street Journal reports. According to The Journal, one brokerage firm sold 150 units in four days last week — 15 times its usual volume — after Amazon announced plans to open a headquarters in Long Island City...."
https://www.businessinsider.com/amazon-employees-buy-apartme...
However I think those buyers will still do just fine. I doubt very many people have lost money by investing in NYC real estate.
“...a dwelling-house, as such, contributes nothing to the revenue of its inhabitant. [...] and though it is, no doubt, extremely useful to him, it is as his clothes and household furniture are useful to him.” [...] If it is to be let to a tenant for rent, as the house itself can produce nothing, the tenant must always pay the rent out of some other revenue which he derives either from labor, or stock, or land. ..."
(12th paragraph) https://www.bartleby.com/10/201.html
My advice to my kids is that they should buy a dwelling and not live in it. Let it be an investment, let someone else pay the mortgage and the upkeep as well.
Regardless, I suspect Amazon employees would know better than to bank on Amazon following through on a commitment.
The whole splitting HQ2 I think showed this. Like it's not even an "HQ" in any sense of the word. It's just an expansion.
Also with talk of "25k jobs"... what jobs? Are we talking software engineers or warehouse workers? There's a difference.
I don't know the inner workings of this but it seems like Cuomo was the driver here with de Blasio on board. This was a missed opportunity. NYC needs several things from NYS that are politically unpalatable upstate. Top of that list is:
- Property tax reform; and
- Congestion pricing.
NYS grossly favours SFHs for property taxes. For example, a $3m brownstone in Park Slope I saw had ~$700/month in property taxes. A similarly priced apartment would have more like $1500-2000/month taxes. A $100m apartment would be taxed at ~$15k/month.
NYC has on several occasions tried to introduce congestion pricing on people driving in or into Manhattan (something I 100% support) but the efforts have failed as this is the jurisdiction of NYS and NYS has no interest in this (so far).
Why not frame this issue as NYC supporting these efforts to fix issues with NYC like these? The deal may have gotten much more traction were this the case.
So I understand the need for government intervention in large projects, say if Amazon were to build 8m sq ft of office space. Regulatory approval can be nigh on impossible.
That much office space is hard to find in NYC. I think Amazon missed the boat with Hudson Yards (probably the last place this would've been possible in Manhattan).
I agree with other commenters that the net effect of this is about zero. Amazon is trying to have a PR moment. They'll still expand in NYC as it suits their needs. They'll still get tax breaks like any large corporation in NYS/NYC would.
This really is just a corporate tantrum.
Workers with an average salary of $150,000, I think it's disingenuous to act like you don't know that but you're also an expert in property tax reform.
Quoted from page 2 of the Virginia agreement [0]: "If any of the persons holding New Jobs are paid “wages” in any calendar year in excess of $850,000, as escalated 1.5% per year, as shown on Exhibit D, the amount of wages in excess of $850,000, or the higher escalated amount, shall not be included in clause (A)."
[0]: https://d39w7f4ix9f5s9.cloudfront.net/a1/f2/85b7a8db41379e15...
That being said, there's no city-level income tax rebate. Assuming the tax brackets currently in effect hold steady until the full 25k jobs promise was fulfilled, the city of New York would get ~3.8% of $150k * 25k jobs = ~$142.5 million/year once the 25k job mark is reached [2].
[0]: https://esd.ny.gov/excelsior-jobs-program
[1]: Note how the 6.85% bracket only applies to income above $215.4k; income above $1.08 million gets taxed at 8.82%; consequently Amazon will get more rebated than employees paid in income tax the vast majority of the time. See the second table of page 57: https://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=...
[2]: The ~3.8% is approximated based off of page 69 of https://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=...
Property tax reform could work for single family homes if we decoupled property tax from land tax. NYS should only raise taxes on the value of land given the surrounding population density, natural properties and accessibility to public infrastructure. Check out some Henry George, if you're interested in learning more.
What happens if someone has owned the home for 60 years, they're older and retired, and suddenly it so happens their neighborhood got popular a decade ago and their property values doubled, and some rezoning happened at a nearby avenue. That's one example. How about we try the academic flirtations with tax experiments at a smaller scale elsewhere, first?
The Park Slope home you had was probably newly renovated. That matters - the sale price doesn't. 700 is even a lot, relatively speaking. In any case, houses from the 19th century cost money to maintain, and sometimes, shockingly, they're populated by people who can't afford 1k a month in property tax. The property values went up high and fast - are we going to punish homeowners for that? This isn't a suburb where taxes must come primarily from property tax - there's a NYC-specific income tax, as you're probably well aware.
Then, here's something else, tax those 2,3,4-families more, rents will go up as a result; they're free-market rate apartments, not rent stabilized.
I don't know what any of this has to do with Amazon, though.
NYC has on several occasions tried to introduce congestion pricing on people driving in or into Manhattan (something I 100% support) but the efforts have failed as this is the jurisdiction of NYS and NYS has no interest in this (so far).
They introduced it - it just impacts taxis and for-hire vehicles.
- Park Slope brownstone, $548/month: https://streeteasy.com/sale/1375411
- Park Slope condo, $1740/month: https://streeteasy.com/building/105-8-avenue-brooklyn/3
Note: if you look into this a lot of condos have deceptively low monthly taxes due to a tax scheme (now defunct) called J-51 (IIRC) where property taxes started at 0 and would go to normal levels over 20-30 years.
All that said, if you build a brand new single or multi-family home someplace, anyplace, the taxes will be pretty high. It's all about the grandfathering of older asessments and a state cap on tax rate increases (20% a year I believe), which is allowed an adjustment if renovation is done (or a fresh assessment if it's new).
I am also proud of my cantankerous fellow New Yorkers who fought this.
Why do they have to involve the city politicians in the decision-making process if they don't need any special treatment?
[1] "While New York City has not offered Amazon any direct subsidies, the company also plans to take advantage of two city tax breaks that will further sweeten the deal by nearly $1.3 billion.
One is the Relocation and Employment Assistance Program, which offers businesses moving to certain parts of the city a tax credit of up to $3,000 per employee for 12 years. The program will benefit Amazon to the tune of $897 million, Gov. Andrew Cuomo said.
The other is the Industrial & Commercial Abatement Program, which provides property tax abatements. It will be worth nearly $400 million to Amazon, Cuomo said."
(https://patch.com/new-york/new-york-city/nys-amazon-deal-wha...)
At the end of the day, this city needs to curb its reliance on finance jobs. Adding 25k tech workers would be a major step forward to making NY more of a tech hub than it is today. Kicking out Amazon sends a message to other large companies who are thinking about NYC -- buyer beware.
while there is a low chance I would have worked there I was considering the potential reality of trying it out for a few months and see what their telework policy is (I am currently 99.5% remote)
I was excited about this. I think NYC is losing out in the long run on development/income/more transactions of all kinds which in general is good for the economy.
Having self government on a local level but then getting constantly steamrolled by a state government that is dominated by some other city really sucks. NYC (and Boston, and Chicago, and a whole load of other cities that dominate their state government) should try it sometime.
On one hand I'm annoyed that an opportunity for part of NYC to feel what that's like was missed by this > < much.
On the other hand the deal that NYS cut with Amazon was a boondoggle load of crap that set a terrible precedent so I'm glad it's not happening.
New York State has plenty of control over things that matter to the city, and doesn't hesitate to prioritize state concerns.
Is this 4chan now?
It's good when local politicians weigh in on local issues. Your comment is completely off the mark.
Why is NYC governed by Albany? Seems like it would explain a lot of the failings of NYC (eg. failing subway).
Cost of Living in NY is higher and Amazon will have to pay higher wages if it puts jobs there rather than a place like Nashville. That's higher wages for the same job. Pretty much every company has a cost of living multiplier and pays different wages for the same position based on where you live. So given that Amazon has a choice to locate in the low wage or high wage area, it seems reasonable for the high wage area to offer to offset some of those extra costs. Otherwise why would AMZN even consider a high cost of living area like NYC?
Now to me it's clear that the market signal is that they should open the new office in a lower cost of living area, which is what's going to happen now. A small victory for reason. This means more Amazon workers will be able to afford to buy a house and Amazon will be able to pay them less. Good news.
Google already has some dev offices in cheaper areas, like Pittsburgh, where office space is cheaper and the salaries they pay slightly lower. And yet, they still choose to double their headcount in NYC.
Just saying, "well I guess Google is just being irrational for no reason" would be simplistic, childish thinking. Google doesn't choose sites or increase headcount on a whim. They're going to do it because there are real advantages to the major tech hubs.
Educated guess, as someone who works at Google now and used to work at Amazon: it's easier to attract people to major tech hubs, because they offer more career stability in the form of having lots of other tech companies around. Being in Kansas City making a Google salary might sound great, until you realize that if you lost that job for some reason, there's nothing around in the same tier.
Also, the kind of person who wants to live in a cheaper city, with a big house for their family, is also the kind of person who's going to be reluctant to move from wherever they currently live anyway. That demographic is going to be hard to convince.
people want to live and work there. especially young people
as you said, couple's can more likely both find jobs, even if they work in vastly different sectors
talent pool is larger
many other businesses (potential customers) are there
Location, Location, Location.
Yes it's cheaper to live and run a business in Kansas but then you're in Kansas.
But at some point people want to start families and buy a house and that starts to take precedence over being in a cool area. The only issue is jobs -- can they work remote, can they find a local employer, can they work for themselves?
So there is a huge demand for higher paying jobs in lower cost areas compared to the demand for higher paying jobs in higher cost areas. You personally may think it unbearable to live in Scottsdale, AZ or Minneapolis, MN, but most people find it pleasant enough and will pull the trigger as soon as they can find a job that pays even 2/3 of what they are earning in SF or NY.
Another data point is the taxes.
This might be also interesting (pdf warning): https://www.edelman.com/sites/g/files/aatuss191/files/2019-0...
Some people do, yes.
> and buy a house
Some people do, yes.
Others want to just stay in an exciting, vibrant area. You're projecting your values here.
> will pull the trigger as soon as they can find a job that pays even 2/3 of what they are earning in SF or NY.
The very fact that such jobs are somewhat uncommon, even though programming ought to be the kind of thing that's easy to distribute/make remote, should tell you something.
NYC is the most populated and density populated city in the country, which is just another way of saying its the city with the highest demand. If most people rather work and live in Scottsdale than that would be the most populated and density populated city in the country.
So, take city A - where house prices cost, $100 and it has 100,000 people. In City B, house prices cost $500 and it only has 10,000 people.
You still don't see the full demand curve for either city. The statement "City A is in more demand than City B" is not a meaningful statement. That's what I was trying to say. I was trying to point out the absurdity of just counting people as a way of inferring the shape of a curve.
Now, how could your statement be changed to make it well defined? You could say "At every price point, City A will have more people than City B". Which means the curve of demand for A is above the curve of demand for B. But is that really true for NY? I doubt it. Maybe, but you'd need to provide some other evidence. And such evidence is hard to find, because NYC is a donor city -- more people move out every year than move in.
https://www.nycedc.com/blog-entry/coming-or-going-nyc-migrat...
The only reason why NYC's total population is growing is because births outpace deaths and it is a port city for new immigrants. But for US-US transfers, it's shrinking by about 2% each year. So at least in the universe of US cities, people tend to choose to live elsewhere.
But that doesn't mean that NYC is a bad city. It most likely means that it's a little out of equilibrium -- most likely because of the influx of immigrants. E.g. you can imagine that existing New Yorkers have some equilibrium price, and then an increase of immigrants raises that a bit, so that some of the non-immigrants leave. This is true in general of port cities: you see an influx from outside the city that pushes a certain number of the people inside out.
Now are these immigrants coming to NY because they prefer it to Phoenix or whatever? No, they are coming to NY because it's a port of entry and because they have relatives there. Immigrants tend to cluster and stay put, which is a shame, because most would be better off living elsewhere, just because they tend to cluster in ghettoes in high cost areas. That's a whole other interesting effect -- why immigrants tend to stop at the first place they land and stay there.
How else could your statement be changed to make it well defined? Well, you can say that real estate prices are really high in New York, meaning that overall it is in great demand compared to other cities where real estate prices are cheaper. This is, I think, your strongest argument. Except there are a lot of factors that affect real estate prices -- including zoning restrictions, prop 13, and most importantly # of high paying jobs, etc. For NY, that would be Wall St jobs or FIRE more generally. Now you could argue that NY has so many Wall St jobs because it's great, but we both know better. There are historical reasons for these types of agglomeration effects that are kinda arbitrary and in the case of NY go way, way back. Even in the period of white flight when NY was dangerous as hell and half empty you had all those Wall St jobs concentrated there.
So, bottom line, it's really hard to infer preferences from the data you are citing and even from the better arguments you could have made but chose not to.
Once a company reaches critical mass, it doesn't need access to VCs, and isn't able to hire superstar programmers at scale, so the quality of the average employee declines compared to what you see in startups. Now you start talking more about repeatable, workman-like code rather than brilliant groundbreaking code. You can still do the latter in a research center that you can keep in the hub and move a lot of the other code to the periphery, which will be most of your employees. After all, we are talking about HQ2 here.
At the same time, you have housing markets that are so insane that the majority of your developers will not be able to buy a house, which means they are going to leave you or demand really high wages -- wages that a company with 20K devs can't afford.
This is the inexorable logic of the market. Suppose we are not talking about people but some other scarce resource. Very expensive leather. You put that into the exotic cars but when you need to produce in high volume, you look for cheaper substitutes in order to help scale your operations. Everyone likes to think they are rockstar developers, but your typical AMZN HQ2 employee is not a rockstar, they are probably just a decent programmer (Not that there's anything wrong with that :P ). It just doesn't make sense to put HQ2 into a place where you have to pay 200K to win over the marginal employee.
No, I'd say they have about equal value. Consider, Google has tens of thousands of tech workers in the bay area. How many other metros could they feasibly relocate their HQ to? Even if you assume that only, say, a third of their employees decline to relocate with them, you're possibly looking at ~10,000 job openings you'd need to staff up on within a year or two to not be absolutely crippling.
> You can still do the latter in a research center that you can keep in the hub and move a lot of the other code to the periphery, which will be most of your employees.
This completely glosses over how companies work. Google doesn't have two tiers of software engineer types, where one gets more exciting stuff and better pay/benefits, while the other languishes on boring things with mediocre pay. Trying to split up the company that way, "we'll just hire crappier engineers in [cheap place] now and treat them worse because they're dumber" would be a total disaster.
> you have housing markets that are so insane that the majority of your developers will not be able to buy a house, which means they are going to leave you or demand really high wages -- wages that a company with 20K devs can't afford.
While this is absolutely a problem, and I applaud efforts to increase affordability either in the areas where tech HQ's already are, or by distributing more offices elsewhere, you're missing the obvious fact that these major tech companies already do this, and it already works. Yes, some people leave. The strongest, and probably most valuable employees largely don't, because they make enough to offset the increased cost of housing: a T6 at Google may make 400-500k/year.
Junior devs and low performing seniors.
Amazon claimed my city didn't have enough talent.
What they meant is that 6 figures is too much to pay per programmer.
Right now it seems heavy in the financial sector to me. Arguably tech is a big part of the economic future, so one view is that it would be smart to have some of that.
It's my understanding that while NYC isn't really a tech hub, the startup / tech scene there has grown stronger in recent years. So I pretty much assumed they were trying to capitalize on this momentum and do a big push to achieve something like critical mass.
Whether that's a worthy goal is very much for debate, but it seemed like that's what they thought they were getting in exchange for the sweet deal they were offering.
I forget where, but I remember seeing someone dig into the details of the offer and Amazon was not actually getting that much better of a deal than any other NYC business.
The sheer number of people from NY saying they are "proud" of this shows just how far removed people are from reality.
This delight in pulling up the ladder after you and making it harder for people to get jobs is odious.
New York doesn't need that too.
If there isn't enough affordable housing for those lower-paid people, that's a failure by the local politicians. Don't blame the highly-paid professionals; they're not the ones controlling zoning and development.
Suddenly bringing in 25k high paid workers without a concrete plan on how to support that growth (including not giving gigantic tax breaks which would impact the necessary schools/police/transportation/etc of the area) is the root cause of the housing and traffic issues in Silicon Valley. I think local politicians are becoming a bit wiser to that kind of thing after seeing how gentrification is causing issues in other cities. NYC local politicians are probably the most aware, given NYC's history.
How about a little more? The planet is sad because 25,000 people won't be taking the subway to work.
Your math is way off.
https://www.washingtonpost.com/technology/2018/12/17/google-...
The reality is that NYC is not Wisconsin, they don't need to give out money.
EDIT: I'd even go a step further, and predict that both Amazon and Google will also have ludicrously large presences in the DC-NOVA area in 10 years as well. In fact, Amazon's presence in the DC-NOVA area will be even bigger than they initially said it would.
The story of the Foxconn factory, for example, is one of Wisconsin acting as if you can give a bunch of money to a company that smells of technology, and they will plunk a bunch of jobs for highly educated and skilled people in the middle of a region with relatively few highly educated and skilled workers. Which, it never worked that way. It never will work that way.
Companies go to places that can fill their staffing needs. Wisconsin, which has been systematically defunding its education system in order to re-route that money toward corporate subsidies, is undercutting its own ability to fill those staffing needs. I don't know that everyone in the state realizes it, but Wisconsin is stumbling all over itself to become the darling dumping ground for companies that are founded[1] in cities and states with the kinds of intellectual and entrepreneurial ferments you get around well-run and well-funded university systems to put their call centers, distribution centers, big boxes mostly full of robots, and other things they don't want to waste money putting in a more affluent area.
[1] I think "founded" is a key word, here, too. Supporting local entrepreneurship is the key to prosperity. Which mostly means getting out of the way of your entrepreneurs. If you get into a bidding wars to acquire the office where a company puts all their jobs that didn't merit being located at HQ, not only do you end up overspending - the people deciding what to bid aren't playing with their own money, so what else did you expect? - but you're also draining the talent pool that supports their growth.
tl;dr: The cart goes behind the horse.
If anything the workers left even more because there was even less attractiveness to be there.
If dumping on ostensible conservatives for wantonly doling out government largesse is wrong, I don't want to be right.
That said, FWIW, the greater context here is an article about New York getting in on the game, too.
As long as some places in strategic areas do the incentive thing, it’s hard not to.
It’s difficult though as it’s a prisoner’s dilemma type situation.
Definitely a bad situation and a story told a thousand times in the US
Additionally,it wouldn't surprise me if Amazon has seen the obscene amounts of money Microsoft is making pitching cloud security and general technical support to the government, and wants in on it.
Agree with all that, I suspect DC-NOVA will be a whole lot bigger than 25k workers now for Amazon.
New York City was on the verge of bankruptcy in 1975, less than 50 years ago.
Detroit’s population started declining as early as the 1950s as companies moved to the suburbs.
New York has a world-class, diverse economy, and I expect it to continue to be a central engine of the American and world economy for our lifetimes, but it does require good stewardship to nurture the economy.
We may be on the cusp of a reversal of the great urban migration of the last several decades, with populations moving into suburban satellite cities as remote work gains acceptance, driverless cars allow for easier commutes, logistics companies and drones allow for easy delivery of goods to your doorstep, and urban housing prices continue to relentlessly outpace wage growth.
I really have no interest in them though. Primarily remote work is the best.
I'm just saying that the smart money is clearly on DC-NOVA in the long term with NYC as the next big winner there.
The fact that you (and many others) consider this a win is an attempt to revise history. This tax deal was all about Amazon expanding very quickly. That deal is gone. But feel free to pat yourself on the back for not "falling for it". Maybe it works out great as other companies will lease those buildings and hire a combined ~20k employees averaging $150,000 in compensation, but that's likely not going to happen.
Cut off your nose to spite your face.
It corrodes discussion badly, and we're trying to stave off that decline here.
https://news.ycombinator.com/newsguidelines.html
In this context, they're referring to the actions of NY (not the comment they're replying to), and TBH, there's nothing personally acidic; it's just a saying.
Dan was spot on when saying that this acidity compounds. It leads to a vicious circle of increasingly hostile comments unless someone decides to be the bigger person and break the chain. Having a neutral third party step in to play this role (i.e. a moderator) makes this chain-breaking far more likely and works to all of our benefit.
Moderators have to make these calls. From my perspective this is no different from what we've done thousands of times.
And often when I get votes, there's no signal whether it's due to tone, or content, or whether it's because I'm expressing something that is true, but makes people feel sad (seems to happen a lot, makes no sense to me).
> feel free to pat yourself on the back for not "falling for it"
is condescending?
Because to me it sounds super condescending, flippant, and dismissive.
And that's the fundamental issue with moderating rhetorical devices. You're assuming you know how the other person intended to say something.
Moderating personal attacks is easy. Because that's not a rhetorical device and it's intent is quite clear.
Whatever growth occurs in NY will be organic. Not government-subsidized hyper-growth which can throw things out of whack.
Real growth brings with it real increases in public funding, that can be used to fund real increases in infrastructure demands and demands on other public services.
When a local government has to bribe their way into increasing local business, they tip the scales in favor of one thing (i.e. jobs) while burdening other things (tax base, transit support, etc.)
When companies choose to do business in your area—because it's naturally the best place for them—it functions as a market verification that you're doing something right.
It's not going to be organic. Instead, these same deals are going to be spread out to a bunch of other companies, most of which will pay less than Amazon on average and the "subsidies" will take longer to be a net positive.
Again, people confuse bribes with standard deals. Any company is eligible to receive the tax breaks that Amazon was going to. So New Yorkers have really "won" here. Same subsidies paid out to lower paying companies at a significant slower scale and significantly less economic upside.
There's no way to turn this into a positive here.
Only if you assume those other companies collectively hold the same bargaining power that Amazon did, which is an assumption I can't agree with
The biggest aspect of this deal for Amazon was reduced regulatory burden. That was Amazon's actual goal here, the tax offsets were just the icing that every company is going to end up getting by making a major move like this.
Predicting the future is hard and counterfactuals are tricky, so we may never know which choice was better.
I dunno. It seems like an unambiguous positive to me. The giveaway to Amazon was enormous -- so much so that it seems extremely dubious that New York would ever have been able to recoup that money, let alone increase it.
Add on to the fact that if you sold that one car for $25K, you end up with other people who would've paid $30K but now want that same discount, so you may have given away a lot more than $5K.
Well, if you believe Amazon coming to NY was good, it's no more negative or positive than me not winning the lottery today, and I didn't buy a ticket either.
This.
That's exactly why what's now going to happen in NYC is what should happen in all cases. Wish we could get this going in Wisconsin.
The commodity these days is skilled workforce. Amazon will still be where they can get that commodity, economic incentives aren't needed. Cash is not the limiting factor it is the people they need. It was a smart business move to try to extract some cash too but they did not need that to expand in NY.
There are skilled workforces outside of NY, believe it or not. And they aren't going to go through the regulatory burdens to expand NY to a major campus, since that's really what this was about.
To be clear, since this point is being missed by so many people: This wasn't a special deal outside of the reduced regulatory burden. Any company that meets the eligibility requirements will get these exact same "subsidies".
What happened here is a bunch of local politicians and local people who are absolutely clueless about how corporate tax reductions work pushed against something that's still going to happen just, at least potentially, not with a high paying company like Amazon.
https://news.ycombinator.com/item?id=19165374
The grants are all based on the size of the deal, and the reason this one was so large is because the number of employees was so large.
Interesting if true, but I don't think people are going to accept it on your say-so. I recommend digging up a citation.
Really? Let look at what was offered:
1 $897 million from the city’s Relocation and Employment Assistance Program (REAP) and
2 $386 million from the Industrial & Commercial Abatement Program (ICAP)
3 $1.2 billion in “Excelsior” credits
4 $505 million in a capital grant
Yes the first 3 are existing programs. But the idea that those sums or anything remotely close to them would simply be made available to any company moving to NY is comical at best. Now lets look at number 4, a 505 million dollar capital grant. That's a pure giveaway compliment of the tax payer. And let's remember that both the city and state governments put together dedicated teams to find this money for Amazon. This was in addition to the work the city and state did for give Amazon data, such as "detailed information on the availability of machine-learning specialists, user-experience designers and hardware engineers."[1]
There is no way any of this is available to "any company moving to NY."
[1] https://www.nytimes.com/2018/12/12/technology/amazon-new-yor...
> $897 million from the city’s Relocation and Employment Assistance Program (REAP)
That works out to $35,880 per employee that Amazon promised. Per the REAP program website[1], the credits available are $3000 per employee for 12 years. That actually works out to slightly more per employee ($36,000). So yes, any company not currently in NYC that creates 25,000 jobs in one of the designated areas would get the $897MM in benefits.
> $386 million from the Industrial & Commercial Abatement Program (ICAP)
ICAP is a property tax abatement available to any company willing to redevelop qualifying properties[2]. The value of the abatement is based on the final value of the property and which benefit schedule[3] it qualifies for. Any company willing to put in the same amount of redevelopment in one of the designated areas as Amazon was will get the same abatement value.
> $1.2 billion in “Excelsior” credits
I don't have the time at the moment to calculate how this was arrived at, but looking at the overview of credits available[4] it appears to follow similar formulas as the NYC programs.
In short, I do not see it as "comical" by any measure that any company offering to create 25,000 new jobs and redevelop hundreds of millions of dollars worth of property in designated areas would get these same values. Amazon didn't get these numbers because they were Amazon, but because of the scale of what they proposed to do. Whether that is a good idea to offer to any company is open for debate.
[1] https://www1.nyc.gov/site/finance/benefits/business-reap.pag...
[2] https://www1.nyc.gov/site/finance/benefits/benefits-industri...
[3] https://www1.nyc.gov/assets/finance/downloads/pdf/icap/icap_...
[4] https://esd.ny.gov/excelsior-jobs-program
>"In short, I do not see it as "comical" by any measure that any company offering to create 25,000 new jobs and redevelop hundreds of millions of dollars worth of property in designated areas "
It sounds like you aren't familiar with NYC. Long Island City has long since been "developed." That building boom started 18 years ago. The volume and velocity of luxury high rises appearing across the East River has been incredible. LIC does not need to be "redeveloped" nor is it some basket case "designated" area that requires incentives and credits to build there.
Is there an article the explains this?
I'm not so sure that people are actually missing this point.
They did a vastly superior job than I could do.
There's now way to. Campus expansions are blocked by layers and layers of NIMBYs. The big selling point of the deal was the state government ensuring Amazon would have a campus that could hold 25,000 people.
Anybody who thinks that through should see why it's such a terrible idea. Not even NY can "very quickly" absorb 25k people in a small area without screwing up quality of life for the people who already live there. That's a great way to make real estate prices sky rocket and screw over the existing residents. And it'll completely screw up infrastructure and transportation, because there's not enough money to pay for them when the company causing the issues is getting a huge tax break and not paying their fair share, and they're not things that can be fixed quickly in any case.
> Maybe it works out great as other companies will lease those buildings and hire a combined ~20k employees averaging $150,000 in compensation, but that's likely not going to happen.
If the current residents are qualified for $150k a year jobs then they presumably already have one - it's not like there are 25k unemployed software devs waiting around for companies to move to NY.
That whole competition was a shameful money grab by Amazon and I'm glad it didn't work out for them.
Of course it can. This is New York fucking City, there are literally single buildings with that many jobs in them here.
This was over a 10 year period. New York City would have absorbed this just fine. Population projections for the city over that same time span is an additional 600,000 people.
The "small area" that Amazon was relocating to (Queens) is expected to get 150,000 of those people. And we can ignore the assumption that people making 150k a year all want to live in Queens (or LIC) and not Manhattan.
https://www.wsj.com/articles/why-the-amazon-invasion-in-new-...
It is also amusing that you consider Amazon's assertion about the job count an iron truth of what would have happened. While Amazon does not have Foxconn's long history of scamming municipalities, there is also no reason to weight their words any higher than other companies who have played this game in the past, and the odds look significantly worse than a sure thing viewed that way.
Finally, the way you win these games is not to play, no different than the continual sports stadium scams or other "let's you and him fight" grifts.
First of all, these jobs were all white collar. Amazon's current new grad SDE's in NY and SF both have more than $150k in comp. New grads.
Second, the food delivery people for Amazon Fresh are employees of Amazon. The Amazon Flex drivers is what you are talking about, and there is no "mandatory" tip for that service. What you're talking about is something Instacart and DoorDash was doing. Those are entirely different companies.
Down voting because you dislike Amazon isn't a valid reason.
So the "value proposition" had nothing to do with access to a talent pool of qualified candidates to fill those 25K jobs? Because that would be odds with the reasons Google, FB et al have set up shop in NYC.
>"This tax deal was all about Amazon expanding very quickly."
Yet there was never any specifics of when Amazon would arrive at that mythical 25K job number. The closest you can find to any time qualification is the phrase "within a decade." I guess you have a very different idea of "quickly."
>"The fact that you (and many others) consider this a win is an attempt to revise history."
No the "win" here is not giving out corporate subsidies, more especially to a company that absolutely does not need it. NYC will be just fine without Amazon. There is no shortage of tech jobs in NYC these days. It been that way for over 10 years now.
On the other hand, smaller, not thriving cities may have indeed benefited from attracting an Amazon. But it's a bigger debate whether they would benefit more than the cost they might've had to pay to attract an Amazon.
Do we even have an example on record of a state or city making huge concessions to attract a company and it "completely reviving a city and building up a new ecosystem that funnels in new wealth and new money"?
You're suggesting that another city will generate money and wealth to rival NYC by getting a few Amazon jobs?
Frankly, that would not happen. Maybe if that other city was DC? But, yeah, probably not even then.
https://en.wikipedia.org/wiki/List_of_highest-income_countie...
There is no place, in the US, that rivals the wealth and power of NYC. Now internationally, that's where you start to get your Beijing's, and your London's, and your Tokyo's, and your Monte Carlo's, and your Paris, and Shanghai's etc. But in the US it's NYC at the center of the preponderance of wealth and power. Only place in a position to make a run at NYC is DC, and they'll need a lot more than Amazon to do it.
(There's also LA and Chicago, but those cities are not as "powerful", nowhere near as wealthy, and to be frank, making a run at NYC is not their ambition.)
Amazon already has a presence in NYC.
https://en.wikipedia.org/wiki/111_Eighth_Avenue
111 8th is a major internet traffic exchange point. It's also gargantuan, it's 2.9 million square feet and occupies a whole city block.
One of the interesting things about 111 8th is that it was designed for much higher than normal pounds per square foot floor loading. Which means that Google could convert the entire thing to datacenter space if they really wanted to. Already a significant portion of it is conditioned datacenter/telecom space run by tenants.
These real estate acquisitions were so large that they explicitly needed to be called out on the quarterly earnings calls to explain why CapEx exploded for that quarter.
At Google's densities, they would never run a datacenter in Manhattan. POPs, sure, like their peering with https://www.peeringdb.com/fac/16, but that's it.
They're more of a managed services provider.
"The Internap expansion represents approximately 1.3MW of additional critical power in a severely constrained downtown NY market.”
https://www.inap.com/press-release/internap-continues-green-...
That was 34000 sqft. Equinix has 36000.
Edit: they had 75K by the time they left. DRT says they have 110K.
Google on the other hand bought 111 8th ave 8 years ago(houses 7K employees) and now they are opening a new space in the same area that will house an additional 12K more employees[1]. That will bring their total to 19K employees in a 10 year time frame.
And this was all done without extracting corporate subsidies and without all the pageantry.
[1] https://www.wsj.com/articles/google-plans-large-new-york-cit...
Disclaimer, I'm one of those 5k. Currently I work from home 99% of the time because the office spaces Amazon has in NY aren't fantastic. It would have been nice to have a new headquarters building, but I'll still be enjoying working from home now I guess.
How many of those are working in tech? When I interviewed at Amazon NYC in 2016, I think there were only around 100 software engineers there. Has it grown a lot since then?
It's pretty amazing how large some of the non-home offices are at these mega tech companies.
Amazon already has an office in New York City, as well as a sizeable presence in New Jersey just outside the city limits (within commuting distance), split between two New Jersey offices, last I checked.
> Whereas if you work in LIC it's not like you can really commute into the city from New Jersey or Stamford.
Why not? Take the Path to the E or the metro north to the 7.
Could you please edit swipes like that out of your comments here? They acidify discussion. Your comment would be fine without that bit.
https://news.ycombinator.com/newsguidelines.html
LIC will never become a second Midtown because its transport connections are so poor.
And god help you the days there are mets games if you're taking the 7.
In what sense? I used to work in LIC and it was pretty easy to get to. Lots of lines go though Queensboro Plaza.
https://news.ycombinator.com/newsguidelines.html
Yeah, this isn't Tinder!
Does the city get back more than the 3 billion in concessions and how long does that take?
Would those new Amazon jobs cause 25k people to move to NYC? Or is it more likely to just make the local market more competitive? How would other businesses react? Would they move? Embrace remote? If they increase salary across the board and live with unfilled positions, how does that affect tax revenue? Even if those people do move, how does that influx affect people with lower paying jobs? Will they be pushed out? How does that affect tax revenues?
Those are the kinds of questions I saw raised by opponents, and it seems like there weren't clear answers to them.
Google hasn't committed to anything. Once it does, it will most likely seek the same tax benefits that Amazon did from the pre-existing programs if it qualifies
?
In NYC there are are tax incentive plans for relocating and hiring that companies can apply for if they qualify. Just because Google doesn’t include that portion in their announcement does not mean they won’t pursue it if they can.
A good article would be one where Google states it won’t take any tax incentives even if it qualifies for it.
Pretty widely speculated that they were going to go to NYC and VA regardless of what the other cities did & the HQ2 gambit was just meant to maximize their bargaining position with these governments
https://news.ycombinator.com/item?id=18503434
Sure there has been a housing bubble there for a decade, and I'm certain there are some real estate insiders benefiting from this arbitrage, but this kind of dysfunction can't be good for the economy.
So this whole HQ2 thing ended up being a grand waste of everybody's time.
The jobs would've been in Long-Island City, which is basically a glass tower condo ghost town with practically no office/business presence. The subway for people commuting into LIC for work is probably currently fairly empty, so the subway could accommodate them. (The same cannot be said of the reverse. Commuting from Astoria, Queens or Williamsburg, Brooklyn into Manhattan for work during rush hour is horrible).
I agree that politicians need to do a better job of accommodating those who are displaced by gentrification. NYC housing costs are insane (as someone else mentioned we undertax single-family homes and $100m penthouses), the subway is failing, etc.
Perhaps the deal would've gone through had politicians better communicated how the $3 billion subsidy package was not just a handout to Amazon but would actually improve the city and the well-being of its residents.
But given the city's failure to build affordable housing (not the "affordable housing" buzzword where luxury apartments are subsidized to low income people who enter a lottery, but doesn't actually meaningfully increase affordable housing stock) and fix the subway, maybe the city isn't capable of managing itself and stemming the pitfalls of gentrification, and so the opposition was fired up by this awareness. It seems that so long as fundamental aspects of NYC like its subway system are managed by NY State, we will never see any meaningful change at anything more than a snails-pace. Perhaps NYC should be fighting for independence from NY State to be in full control of its own destiny rather than being at the mercy of politicians in Albany with a poor track record of attending to the city's needs. (sorry I got derailed there a bit, just a stream of thought)
You seem to understand pretty well why some are not seeing this as a loss after all.
The affordable housing crisis and congestion will only be further exacerbated. Your average Queens resident who's already barely making her rent will see rents skyrocket, forcing her to move out and further into the boondocks come lease renewal time.
I think the opposition reflects a dissatisfaction with the politicians/administrators who run their city more than a hatred of Amazon.
I lived in Greenpoint and Sunnyside for 3 years ~5 years ago and either took a train from LIC into the city or through LIC. They were always busy. Just because no one is going to LIC for work doesn't mean that they don't have to use the same trains that would be used to go to LIC. The 7 is a crowded line as are the orange and blue lines that go through. The only line that wouldn't be incredibly crowded is the G, and even that isn't fairly empty going to Court as it's a popular way to get to midtown if you live near the G.
I'd say the MTA's problems around poor oversight wouldn't be magically solved by NYC taking control. For example, NYCHA was under NYC control. Sure, over the years the Federal Government has diminished funding from their side -- but that should not overshadow the contractor and union corruption that NYCHA, whose head was controlled by the City, suffered with. You don't need to re-read the headlines about the falsified lead inspections, but I probably do need to remind you that in the last couple of scandals (one involving orgies and parties in a South Bronx project, as well as clocking overtime while not being there), not a SINGLE person got fired, thanks to union protection. Rumors are an elevator repairman position pays 300K. Until recently, NO repairs were done anywhere after 4pm due to union agreements. Finally, the City is the worst landlord - racking up violations more than any private landlord could, in the worst sort of hypocritical irony. So no, I don't think so.
NYCHA was found at fault recently in a Federal lawsuit, where HUD almost took the whole thing over. You can't blame the Federal Government for that.
You probably don't want to know that all the green scaffolding that lasts years is being rented -- the money going to a private contractor. You can look this up and do the math, it's just another example of incompetence.
Next, the City is already making MTA's life harder financially, and here are two recent examples. One is, the Mayor came out against banning food on the subway because it supposedly disproportionally affects the poor. Yet, trash fires from stuff like food containers account for a sizeable fraction of the delays. Here's another. The DA stopped prosecuting subway turnstile jumping, which costs 80M a year from lost subway fares and something like 120m from lost bus fares. And prosecuting this would be racist, we're told.
Finally property taxes go up 20% a year -- at least mine do, because that's the max allowed by NY State. If NYC were running its own affairs, I can't even imagine what would happen.
They failed to implement a wider congestion charge, like they do in London and many other places, because, ahem, it, according to the Mayor, affects the poor (he said this). So now we applied a congestion charge to taxis and Ubers/Lyfts/for-hires, because the drivers are rich, right?
I could go on. Finally I'll leave you with, have a look at how many new City jobs opened up and new agencies opened up in 2018. Do you really think the City can be trusted fully owning its budget?
You're clearly right in that the NYC taking ownership wouldn't magically solve the issue. There's a bigger systemic problem here - piss poor management and complete lack of accountability. The fix isn't as simple as changing ownership since clearly these organizations are being misproperly managed regardless of whether NYC or NY State are in charge.
More drastic reform is necessary. I don't know what that looks like. Maybe we can start by giving politicians more direct control and oversight over these "public benefit corporations" that they're bankrolling.
If your property appreciating in value by 20+%/year? That's insane.
https://www.statesman.com/news/20161125/this-day-in-tech-his...
I never said it did.
However, if you really need to make a contract iron-clad in order to protect yourself (and good luck with that!), that's a very strong indication that the entity you're dealing with is untrustworthy and you shouldn't be getting into bed with them in the first place.
The problem with most major corporations (and particularly major tech companies these days) is that they are not trustworthy actors.
With a stadium, you only employ a relatively small number of people during the week and off-season. Staff during games and concerts are not really earning a ton of money that will create new economic activity. With Amazon, tech workers actually increase the tax base and they're spending their money at local businesses. At least with the Virginia deal, the tax breaks don't kick in until they actual create jobs at the promised salary levels.
Now I don't really agree with giving a massive private business all of these tax breaks, they can afford to expand without them if it makes business sense. The problem is that each state is competing with each other and FOMO kicks in. Without that powerful motivation companies wouldn't pull these stunts. Although eventually they'd try to pit countries against each other (which they kind of already do).
Cities will keep on losing this kind of battle until some form of government or policy arises to counter the power of corporations (which are de facto increasingly taking the role of governments). Under our current regulations and incentives, I'm actually glad to see Amazon flex its political capability and teach NYC a lesson in what happens when you let vocal minority dictate public policy. Let examples like this teach us how broken our laws are.
Note I am equally glad to see some day that government (federal, state) come up with policies that stop cities and states from undercutting each other to get a temporary revenue / population / popularity boost at the expense of giving away the farm just to get it (until you find out it wasn't worth it, and get to try and remember that at the next election). Or god forbid, actually create policies that in the long-term stimulate as many jobs as a corporation might in a single swoop.
I don't see any reason to prioritize the "economic base" over the people currently living there. Those things do not necessarily go hand-in-hand. They can, but often do not. Those elected officials seem, to me, to be representing the best interests of the people who voted for them. What's best for the tax base of a certain geography is often at odds with the people currently living somewhere.
No one lived there until very recently, and the people that do are rich as fuck - it's basically a discount Midtown East. The poor people who live in the nearby projects came out strongly in _favor_ of Amazon opening up and lobbied the city hard - turns out Amazon also needs janitors, cafes etc.
Amazon would not even have been one of the top 20 employers in the city and finance would still be the most important economic sector by far.
It would have been a big deal for LIC, but not for NYC.
I think a lot of people get so caught up in hating on tech workers and opposing gentrification they forget where the money comes from.
It’s become very stylish to rage against corporations. I wish people would take a more rational point of view. We shouldn’t be hating on successful businesses for fun.
Edit: also, I’m not sure, but isn’t the $3B a reduction in taxes Amazon would have paid? So it’s not like NY had that money to begin with. It’s jist a reduction in what they would receive.
Ref: https://www.google.com/amp/s/amp.businessinsider.com/amazon-...
And like other commenters pointed out, the state still makes money through payroll taxes, sales tax, property tax, etc.
I agree that the politicians should have made it more clear that the additional tax revenue would be used to fix urgent problems like the failing subway, poverty, etc.
Include all taxes from 25,000 employees + their families (property taxes, sales taxes, etc), and it's a very likely $4.5 to $5 billion over ten years to state & local coffers from the employees.
And that's just the direct benefits. It excludes any taxes Amazon corporate would pay, such as property taxes on any real-estate they buy over that ten years. It also ignores the potential for additional expansion in that ten years (Amazon will more than double in size over that time, to half a trillion dollars plus in sales, I'd bet on more than 25k employees).
It would have easily paid for itself, which was actually never in dispute. People didn't like it regardless of the fact that it would have paid for itself. They disliked the idea of giving Amazon anything.
The other issue is that this is assuming literally all 25k employees would be new residents of NY. Assuming this is true (which it probably wouldn't be), that also means that the city needs to maintain infrastructure for at least 50k new residents (probably more like 75k assuming an average family size of 3). That's not an insignificant amount of new people who require public services.
Regardless, ($14k * 25k * 10 = $3.5B). Not that much more than the initial tax rebate, and not accounting for any additional costs to the city. Also assuming that the rate of tax-paying by employees remains consistent, and that they don't cut any staff in HQ2, which is far from certain.
As to:
You realize any property that Amazon would purchase is already owned by someone, right? And that the current owner is already paying property taxes.Amazon already has an office in NYC. If they want to expand in NYC they can. Amazon growing in NYC is not at all predicated on the existence of HQ2. The only probable reason Amazon would continue to expand in NY specifically would be for more tax breaks. Which kinda defeats the argument that "Amazon will grow and we can collect more taxes".
Seems like an clean net positive for the city even viewed in the shallowest of accounting terms. This doesn't include the positive network effects of encouraging the future growth of Amazon and other tech companies in the area.
What if Amazon decides they only need 10k employees in "HQ2" after 5 years?
Better bird in hand than two in the bush.
NY needs to focus on improving infrastructure now, which is the only guaranteed thing that will promote growth in the long term. And to do that, NY needs to be 1. less corrupt and 2. not give giant tax breaks to corporations that already have offices in the city.
Yes, maybe Amazon HQ2 will be a net positive 10 years down the road, but NY should focus on fixing its broken subway system and other structural issues so that the city can actually support 10 Amazons in 10 years. And HQ2 literally did the opposite of that (increasing ridership while decreasing revenue in the short term is not how you improve infrastructure, surprisingly).
When someone says it's destroyed, they mean it's gentrifried or exclusionary, not benefiting everyone equally. That's certainly true. Economically the fact is Seattle has been an epic boom city for two decades now.
Sweden, Finland, Denmark and Norway also don't benefit everyone equally. 99.9% of the world can't live there, few of the planet's 7.5 billion people are welcome. It turns out that all nice, affluent places are aggressively exclusionary, without exception.
And how does building a bunch of offices in LIC hurt the rail system? If anything Amazon would be a new major constituent that would benefit from improved rail service.
2021: After hitting 2020 growth targets, Amazon quietly lays off 5000
It’s not like we haven’t seen this before.
https://esd.ny.gov/excelsior-jobs-program https://esd.ny.gov/startup-ny-program
I mean, I think it's great if there's now budget to increase support for small businesses.
2. New York already has a lot to offer in terms of labor market, real estate for employees, and access to capital markets. Did Amazon really need incentives to want to be in NYC?
3. No huge loss for either party. NYC doesn't need Amazon, and Amazon can make the little people dance for them somewhere else.
The problem with subsidies is that they needlessly cost money in a zero-sum competition between cities. It was always clear that Amazon would build somewhere. A race to the bottom competition over the exact location leaves everyone but them worse off than the alternative, which is coordinating to refuse to engage in it, like any sane economy like the EU does.
It's just like anything, you might benefit from the price you pay but you might have been able to get it cheaper.
As part of Amazon’s new headquarters, New York and Long Island City will benefit from more than 25,000 full-time high-paying jobs; approximately $2.5 billion in Amazon investment; 4 million square feet of energy-efficient office space with an opportunity to expand to 8 million square feet; and an estimated incremental tax revenue of more than $10 billion over the next 20 years as a result of Amazon’s investment and job creation.
EDIT: Apparently there were limits placed on 120 landings a year and it was on the waterfront campus mitigating some of the safety concerns. It was still a major concession given though that does nothing I can think of to add to the community.
And it was dumb for Amazon to seek out subsidies anyway. Amazon only needed one criteria to have a successful HQ2: A willingness to accommodate new housing demand. $3B in subsidies would be dwarfed by the increase in salaries from higher costs of living. If a city can allow housing to be built, and keep up with Amazon's hiring demand to keep housing prices flat, that alone would be worth far more than any city or state could ever hand over to Amazon in subsidies.
Everyone's moving to more comfortable places with lower costs of living. NYC is not an attractive place for job candidates unless those candidates are already in NYC. Even companies with a strong presence in NYC are expanding in places like Nashville, Omaha, Dallas, Denver, etc. rather than in NYC.
At some point, New Yorkers ought to ask themselves why everyone wants to move to these nice midwestern cities.
Consider that your perspective might be skewed because people in lower COL areas tend to be those who place more emphasis on COL?
I think more and more tech workers are going to wake up to the fact that while mega-city life can be cool, it's not the only way to live.
I think there is something to be said about early career people rushing to NY and not realizing how much 80k really is, though. Schools should really have a class for all majors that just goes over how you calculate and compare cost of living and put a price on benefits, including the intangible benefits like having other employers you could move laterally among without planning to uproot and go 1000 miles away.
Job-wise, the NYC tech market is as good as ever.
Not sure why you chose the midwest as a qualifier here - out of all the cities you listed, only Omaha would be considered a midwestern city.
Out of the 15 fastest growing cities according to the Census, almost none of them are in the midwest [1] (Only one really: Columbus). Admittedly it's over a short time span.
Also: #5 is LA, a city I don't think anyone would consider to be low cost of living.
The real story is that the south (+ Texas, depending on what you consider Texas) seems to be growing rapidly, not the midwest.
1: https://www.census.gov/newsroom/press-releases/2018/estimate...
It's actually pretty important, because the crux of your argument is that they're moving to places with much a lower CoL. If people are moving from NYC to LA/Seattle/etc., your argument doesn't really hold much water.
> or you could take my point that there is a reason why people are moving out of places like NYC in favor of less dense cities that don't smell like urine.
Where are you getting that information from? As far as I can tell, NYC has had about a 6% population growth since 2010. It actually matches the US overall population growth pretty well, which is pretty impressive for what is far and away the most populated city in the country.
Gee, I don't remember mentioning "LA/Seattle/etc." by name. Unlike some other cities that I mentioned by name. Did you see the part where I mentioned cities by name?
> As far as I can tell, NYC has had about a 6% population growth since 2010. It actually matches the US overall population growth pretty well
Great, now compare that to the growth rates of Dallas or Nashville or etc.
In the end all they proved was this kind of stuff should just stay in the backroom. And good paying tech jobs stay on the coasts.
They likely could have avoided it if they had just selected one of the dark horses like Indianapolis or Saint Louis.
The process was anything but transparent. "Cities’ Offers for Amazon Base Are Secrets Even to Many City Leaders": https://www.nytimes.com/2018/08/05/technology/amazon-headqua...
But NYC is on the coast. What do you mean by this?
I wonder if this is to let some of the news cool, work behind the scenes with some of the previous offers, then surprise announcement down the road.
Weird.
I remain unconvinced that they care about local politicians' angry takes on their campus (who they probably expected to hate it in the first place).
ask the state government, who's happy to give Amazon the tax break but not nearly so happy to fund the agencies running its largest city's transit.
But I didn't like the big tax breaks, and as a taxpayer of the city I'm glad my money won't go towards subsidizing the expansion of one of the world's most valuable companies.
It's too bad Amazon wasn't willing to pay their fair share.
This was all covered in a Planet Money episode[2], so you can listen/read it and make your own decision, but if it's true, it seems a shame that New York was denied what should be a favorable outcome because of FUD, spite for Amazon/Bezos because they are large, or some combination thereof.
1: https://eml.berkeley.edu/~moretti/multipliers.pdf (Note: I haven't read this, but I tracked down the most likely source for the reference as I got it from [2])
2: https://www.npr.org/templates/transcript/transcript.php?stor...
This isn't internal information, you can look it up on the career page.
https://www.amazon.jobs/en/search?offset=0&result_limit=10&s...
The fact that that's all you can think about ...
is exactly why people are starting to lose their love for Big Tech in general.
https://news.ycombinator.com/newsguidelines.html
It is when you're not considering the adverse effects on others. And when you're already doing quite well enough, as it is.
Why should something that vaguely amounts to an arbitrage situation be free?
NYC could've had Amazon, even with decent tax breaks, but the government just went too far without the support of its constituents.
You actually think that's going to happen?
This may have already happened, it's really hard to say.
Things like Uber, AirBNB, even Google Waymo are all examples of this.
Edit: I did a bit of research below, and 4% definitely does not seem accurate. I have no idea where the source for that 4% was :/
The number of votes cast in New York's 14th Congressional District election, 2018 was 141,122: https://ballotpedia.org/New_York%27s_14th_Congressional_Dist...
That's approximately 20% of the total population. I can find no info on what percentage of that 691,715 is eligible voters, but the 4% claim appears pretty ridiculous.
https://www.instagram.com/p/BkuxZsylioX/
That's extremely common for local elections. For all the talk of money in politics, neither party could afford to fund opponents in every district.
> With 98 percent of precincts reporting as of Wednesday, the State Board of Elections shows 27,826 registered Democrats cast votes in Tuesday’s primary in New York’s 14th District. With 235,745 registered Democrats as of April, according to the BOE, this comes out to a turnout of around 11.8 percent.
NYT shows roughly 150,000 votes in the 14th precinct for the actual election: https://www.nytimes.com/elections/results/new-york-house-dis...
The population of the district is around 712,000 https://ballotpedia.org/New_York%27s_14th_Congressional_Dist...
So, the actual percentage is indeed higher than 4%. Even still, it's quite low.
https://www.youtube.com/watch?v=LrObZ_HZZUc
Jay Foreman does another great video on the very weird situation with the House of Lords:
https://www.youtube.com/watch?v=RrQBTvRj0s8
We’d get the most pro-business candidate every time. Not that any candidate has been anti/business, but can you imagine, it’d be pro-business on steroids. Schultz, One of the Waltons, corporate raiders?
I think it gets complicated but the decision had merits, I think. Obvs, the SCOTUS believes it did.
In the case, the conservative non-profit organization Citizens United sought to air a film critical of Hillary Clinton and to advertise the film during television broadcasts shortly before the 2008 Democratic primary election in which Clinton was running for U.S. President.
The federal law, however, prohibited any corporation (or labor union) from making an "electioneering communication" (defined as a broadcast ad reaching over 50,000 people in the electorate) within 30 days of a primary or 60 days of an election, or making any expenditure advocating the election or defeat of a candidate at any time. The court found that these provisions of the law conflicted with the United States Constitution.
They were prohibited from airing ads 30 days before the election. The decision in terms of effects and scope was terrible. It was a broad decision and had a very wide effect.
The repercussions may be wider than anticipated or liked, but the decision to not allow them to advertise and show it because it wasn’t by an established entity seems spurious.
https://www.youtube.com/watch?v=PeGlzEavpTM
>In response, Citizens United produced the documentary Celsius 41.11, which is highly critical of both Fahrenheit 9/11 and 2004 Democratic presidential nominee John Kerry. The FEC, however, held that showing the movie and advertisements for it would violate the Federal Election Campaign Act, because Citizens United was not a bona fide commercial film maker.
So basically a "house of lords" for America, but instead of bishops and lords it's tech CEOs and celebrities? :)
https://en.wikipedia.org/wiki/House_of_Lords
If the relentless (Media) attacks of DJT are an indication, there are few "outsiders" who are going to get involved in the future. And isn't that exactly what status quo'ers like the DNC and GOP want?
Consider the possibility that he isn't being attacked. That his actions/statements are being reported on. That what you call an attack is indicative of the nature of the man. When you cause George Will to leave the party then....
My benchmarks are these:
1) The USA went to War in Iraq over over lie. Thousands died, gazillions were spent, etc. as a result of that lie. The Media barely noticed. People who believe Trump is the worst thing ever clearly never understood who and Dick Cheney was. Trump is a pussy cat compared to Cheney.
2) Not only did BHO renew the (so called) Patriot Act but he expanded its depth & breadth. The Snowden revelation also came to light on Obama's watch. Again, the Media barely noticed. Real journalists would find both of these troubling. Instead, BHO was our first BuzzFeed POTUS.
--
I am by no mean a fan of DJT but the truth is nothing he has done to date comes close to either one of those. He's got __a lot__ of work to do to top either one of those. The Media is bending over backwards to discredit DJT because:
1) It's a favor to the DNC. It lets the DNC off the hook because ppl are too distracted to ask the DNC what should be asked. That is: "How negligent and incompetent do to have to be to lose to DJT? And what heads are going to roll for your debacle? We want names!!!"
2) The GOP doesn't like him either. He stepped in on their dance, made all their candidates look like the fools that they are, and made it to the Whitehouse. That's not how it works.
3) Neither party wants to see another outsider do what DJT did, and they will, by any means necessary, make sure it doesn't happen again any time soon.
4) Trump is good for the Media's business. They love the "outrage". They love the "controversy." As long as it draws eyes and clicks - cha-ching, cha-ching, cha-chaig - they're happy. The media finally discovered that giving Bush #2 and Obama free passes didn't help pay their bills. For the Mainstream Media DJT is like printing money.
That is the context. That's how W.DC operates.
George Will has been a solid conservative for decades and written numerous books lauded by conservatives. Consider the possibility that it was precisely his integrity that caused him to abandon the party. Perhaps it's possible that Trump represents a part of the party that a reasonable person with some sense of moral and intellectual consistency wants nothing to do with. How far right does the party have to go before you will question the state of affairs? Trump called Ted Cruz a liar. He implied Jeb Bush is a wimp. He implied that Ted Cruz's wife is ugly. He implied that Rand Paul is ugly. He said that McCain is a loser because he was a POW. He was a loser for getting captured. Trump agreed that his own daughter is a nice piece of ass. This was on the Howard Stern Show. How far does the man have to go to lose credibility in your eyes?
To be fair, was he wrong? How many career politicians do you know that aren't liars, especially Republicans?
>He implied that Ted Cruz's wife is ugly.
Again, to be fair, I just did a google search and he's not wrong, IMO. Yes, it's in poor taste to make remarks like that, but Trump is a populist, so he's basically playing the "I call it like I see it" card, which gets votes from his base.
>How far does the man have to go to lose credibility in your eyes?
The things you're complaining about are positives in the eyes of Trump voters. That seems to be the problem you're having with understanding. They don't want another regular politician; this is why populists come to power now and then. It seems to me that the biggest problem that both parties have, and is shown by your post here, is a completely inability to comprehend the appeal of someone like Trump to low-information, low-class voters.
If we had an alternative voting system (there are several good ones), people could actually vote _for_ someone rather than just _against_ someone, and there would be some criteria for voting other than who can put out the most inflammatory campaign commercials.
But again, the status quo would never go for it, and I suspect most voters wouldn't go for a system that can't be explained on a bumper sticker. I'm not trying to insult the intelligence of the average voter, just their attention spans.
Oh, I really think it could.
And lest I forget to mention the lobbying that happens everyday.
https://nypost.com/2019/02/12/majority-of-new-yorkers-want-a...
It irks me to no end that our system is set up to reward the largest and the wealthiest.
NYC should have prepared a package for Amazon and said "this is what we'll guarantee in breaks to small business owners if you come here".
I didn't even think it was a particularly bad deal all things considered, I just hate the idea.
Meanwhile, half of NYC and the country is wondering what NYC will do without 25,000 jobs. Or before that, wondering how the housing market could possibly bear it.
25,000 people, a ton of whom were already living in NYC (thats why they wanted to come) was going to be barely a ripple.
The whole thing was a sham. People were way overstating the affect it'd have, and NYC needs better subways, not more tech jobs (or both in conjunction).
I could give a shit about 25,000 potential AWS employees.
In terms of impact on a regular residents life at least.
In my opinion, the type of special treatment that New York offered Amazon is fundamentally anti-democratic and just plain wrong.
Sounds like a negotiating tactic, to encourage residents in support of the campus to put pressure on their representatives in government.
The "politicians" are upset, because their constituents are upset. Amazon, attempting to turn the tables is an interesting tactic - sort of a reverse psychology. I wonder if it will work.
It would be absolutely ridiculous and absurd if they decide to come back, just because the narrative between officials and constituents changed.
Honestly, them coming back to NYC wouldn't be any less of a shit show then the process of them coming to NYC.
While I'm skeptical about this claim about 70% of NYers supporting this, if it's true, then they should do a better job of voting.
I did however love the protester's signs:
https://static01.nyt.com/images/2019/02/14/nyregion/14nyamaz...
The only person who successfully circumvented NYC politics was Mike Bloomberg, and that was solely a result of his personal charity giving over $600 million in donations to different community orgs and non-profits over the course of his mayoral tenure.
Does anybody think that Amazon pulling out of NYC will make their impact on the DMV greater or would it probably be the same as if they had HQ2's both places?
Yeah. It sounds odd, but it's certainly not crazy / wrong.
But to save face, AMZN now has to pull out of NYC that has a great pool of talent.
Wait, where'd Nashville come from? I thought the choices before were NoVa and NYC?
Have you been there this year? It was -26F without the wind chill a couple of weeks ago.
Come for the cold weather and stay for the high taxes and high housing prices on the St. Paul side. Also, traffic is going to be fun on the west side for a couple of years.
Ocasio-Cortez, Gianaris, van Bramer...?
If we want to create jobs, we don’t need a giant corporation using our tax money to help organize this human activity. We can hire each other for our own local purposes.
If we want to keep NYC rich then we don’t exploit the labor of the local population to send money out of the city.
The biggest US export by far is Dollars, ever since Bretton Woods they are in demand all around the world. We trade them for stuff others make. It has made Americans lazy and fat.
Do you really want jobs? Like race-to-the-bottom Amazon warehouse slave jobs? Is that the goal of humans? No. It’s just fed to them.
Donald Trump said he’ll keep the jobs in this country. Bernie said he’ll keep the money in this country by preventing corporations and billionaires from offshoring it through loopholes.
I know which goal I’d prefer, if I wanted Americans to be the masters and not the slaves. (I happen to believe that money going to poorer areas is good, so I don’t hold that nationalistic position - but if I did, I would want the money to stay, not jobs.)
Big loser here is New York City.
Amazon will get its tax break somewhere else.
Looks like we’ve reached our “Gettysburg” moment against corporate welfare. Terrible years of war still left, but the tide has turned.
As for "being pushed further and further out", that again is the voter's own fault for not voting better. They don't need to move farther out, they need to build more densely, and they don't do it. This is largely an American problem because for some reason, Americans associate dense residential areas with "slums" and think that only suburbs with McMansions with gigantic and useless lawns can possibly be "nice".
https://www.ft.com/content/023562e2-54a6-11e6-befd-2fc0c26b3...
But fewer Foxconn style deals and race to the bottom HQ2 publicity stunts would be great for everyone (except the mega-corps).
"After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. 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.
We are disappointed to have reached this conclusion — we love New York, its incomparable dynamism, people, and culture — and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.
We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult.
We do not intend to re-open the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.
Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time."
This has happened with Amazon, Casinos, GE, The Olympics, F1 racing... cities need to not be so fucking desperate to sell out their residents to the highest bidder.
I'd be more amenable to a property tax increase than any of this garbage.
That said the system could be changed and laws written to prevent subsidies all together. Then competition for large workforces would be based on other factors.
If you're tired of $24 pizza consider the cabbie serving south asian places along 21st street, they're fantastic, and yes they're still there.
If you stop seeing the tax payments as entitlements, it begins to be a lot easier to reason about.
It's simple negotiation; you may lose some money on that one deal, but you'll gain more in the end by not decreasing the value of all subsequent deals.
It's almost like taxing easily-moveable economic activity is a bad idea.
A lot of what makes NYC great (like the 24/7 public transit system, the best in the country) costs serious money to operate. You need to get that money from tax revenue.
And businesses aren't actually easily-movable, not at all.
Most of which were present there because they set up a long time ago. The current environment makes it so that you pretty much have to get a discount to make it worth starting there, per the famous reddit comment:
https://www.reddit.com/r/nyc/comments/9wploz/ocasiocortez_bl...
>And businesses aren't actually easily-movable, not at all.
"Where they decide to locate new offices" is.
https://www.npr.org/sections/money/2018/11/16/668769284/epis...
Kansas City is at least a well known name in the tech world now, when there's plenty of other midwest cities of similar size that rarely get brought up.
Millions would be a steal for the revenue becoming a tech hub would bring in. Even if it does take a more than a decade to be realized.
Cities of similar size: Albuquerque, Milwaukee, Louisville, Oklahoma City (and more).
Out of these, Kansas City comes up more often tech wise. I waste a good bit of time on sites like this discussing tech related matters, and not once have I read an article involving any of these cities.
This is why I said well known and on the map, not 'popular'.
Obviously the truth is that there are bad aspects of a race to the bottom as well as positive attributes. Finding the balance requires nuance and grace by the leaders who navigate these uncertain waters.
The alternative, as is being demonstrated, is that you simply don’t get that business, and you lose out. x% of $0 is $0.
No. Not "new business". "A" new business. It's a sweetheart deal for one company in particular subsidized by the taxpayers. They're not reducing their citywide tax rate to attract Amazon, they're just giving a handout directly to Amazon.
What you're describing is nothing close to the reality. It's the prisoner's dilemma. Cities that participate in this scheme take turns screwing each other over in an attempt to get a minor benefit themselves, but compared to the scenario where nobody played the game to begin with, they all lose.
1. $2.988 billion in state/city subsidies (so ~$48,000 per job)
2. The state estimated that Amazon will generate $27.5 billion in state and city revenue over 25 years, a 9:1 ratio of revenue to subsidies.
Using the numbers above, we can calculate that the state would break even in roughly 3 years if they're correct.
[0]https://ny.curbed.com/2018/11/16/18098589/amazon-hq2-nyc-que...
Maybe an extreme example of a "bad deal" but these aren't always a slam dunk, and some of the math to justify (especially sports stadiums) can be a bit iffy.
But what about.....just kidding couldn't help it
LIC was a perfect location to recruit folks whose easy commutes from Brooklyn to Google were going to be complicated.
Note that Amazon did not provide projections on economic impact or tax revenues or other aspects here. The city and state made those promises, based on economic analyses they commissioned (and likely used in their negotiations). It includes things like taxes from the additional jobs and businesses that will be created outside of Amazon.
All but $505m of the ~$3b in subsidies here would have come from programs that already existed in NY State and NYC (Excelsior, ICAP, and REAP). Would you give up $3b over 10 years (and just $505m above programs that are broadly available) to attract business that will provide an incremental $28B in new tax revenue and $186B in GSP over 25 years? That is a _tremendous_ ROI, the kind that typically does not exist in the market, and a $505m capital grant (the primary Amazon-specific concession) was a small price to secure it. The 9:1 return they projected on this deal was the best such program NY State and NYC would have ever run, and possibly the best such deal ever across the country. To put it into context, the Film Tax Credit program had a 1.15:1 ROI.
We can argue all day about whether the HQ2 search was a bluff or sham or whatever, but there is no reasonable claim to certainty here - and hence negotiation enters the picture to turn something uncertain (Amazon MAY come to NYC) into certain (Amazon WILL come to NYC).
Here are the quotes from the original HQ2 press release on the economic benefits:
> The construction is expected to create an average of 1300 direct construction jobs annually through 2033. Overall, the project is estimated to create more than 107,000 total direct and indirect jobs, over $14 billion in new tax revenue for the State and a net of $13.5 billion in City tax revenue over the next 25 years. The project provides a 9:1 return on investment.
> According to an economic impact study by REMI, Inc., a world leader in dynamic forecasting and policy analysis, the Amazon project will generate over $186 billion in Gross State Product for the New York State economy over the initial 25 years. REMI also projects over $14 billion in total new tax revenue for the State (in 2019 dollars), with annual revenues growing from $10.8 million in 2019 to nearly $1 billion in 2043. The City forecasts $13.5 billion in total new tax revenue.
https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de...
The ROI here is well beyond any other conceivable option. It is so large that even if projections of a 9:1 ROI are way off, it would be a big win. Also, most of the subsidy to Amazon is not an up-front lump sum. Rather, most of it takes the form of credits for prior actions. For example, they would get tax credits for job creation in the prior year incrementally, based on what they actually delivered.
Taking all this into account, this would have been a super safe path to greater tax revenues, which would have improved the city/state as a whole. I hope as a next step Amazon considers cities in other parts of the country, away from blue coastal cities. Economic revitalization across a broader slice of the political/ideological/cultural spectrum can only be a good thing.
This whole thing is beyond stupid, no aspect of this model works for anyone. Just stop.