Imagine if NY distributed 1.5b tax credits and 500m grants Amazon is getting to NY-grown young companies made organically in the urban tech sector. Instead of one Amazon funneling off talent and resources from the city, you’d get 50 new companies with a greater social and civic connection to the city.
Instead LIC will get crushed by top-down McUrbanist development. It seems the milquetoast critic here is getting in line behind his crony bureaucrat friends to beg for his own pet projects, when Amazon has no intention of doing anything other than what Amazon wants.
Kind of a coincidence this comes right AFTER the election, huh? Not
5
“New York” will reap the benefits - just as “Seattle” has benefited from the presence of Amazon. But the residents of Long Island City should brace themselves for change- they are about to be squeezed out and replaced. Just ask all those small, local businesses and residents that used to be in the South Lake Union neighborhood of Seattle, once an unhip, semi-industrial area that is now the hub of the live-work tech lifestyle. The sheer size of the corporate subsidies/tax breaks Amazon is getting and the secretive way the deal was made heaps insult upon (future) injury. The people who already live there will get all the downside, unless they think trendy, expensive restaurants, higher rents and property taxes, overcrowded transit and traffic congestion are good trade-offs. All those lucrative jobs don’t go to the locals.
7
In an article supposedly about Amazon’s arrival, the details are weirdly out of place. Amazon doesn’t and has never shared much culturally with Silicon Valley.
Amazon didn’t grow up in a suburban, office park environment. It has never offered free meals or elaborate and subsidized services that insulate its employees from the rest of the city, and its employees have always to a large extent lived close to work. Most of the people I currently know who work from Amazon live across the street from their offices or just a few blocks away and hoof it through the neighborhood and spend liberally in the restaurants and bars around the offices.
It’s very much an urban company.
2
Corporate welfare at its most outrageous. Like sports stadiums, politicians burst with pride about these monuments to their legacy. The public pays. No one will ever know what the financials look like in 5, 10 years. No matter. This exercise in robbery will be repeated while infrastructure, education, healthcare that could have benefited from a $2billion infusion are starved; “we’d like to (insert need), but we don’t have the money”
10
I wished Mr. Kimmelmann would stick to architecture critiques instead of holding forth about economic considerations.
4
I would not want to pay New York taxes on Amazon pay.
2
@Rodrian Roadeye “The true New Yorker secretly believes that people living anywhere else have to be, in some sense, kidding.” - John Updike
I would have loved to see an unbiased financial analysis of the realistic ROI for this expenditure. I have yet to see it and am unconvinced about the benefits of this type of corporate welfare
6
" I’m not saying companies move, or should be expected to move, for any reason other than to make money. "
But I suspect you, like all of us who are nostalgic for 1932 - 1980 Roosevelt-era regulated capitalism instead of the current 1980 - 2028? Reagan era under-regulated morass we find ourselves now, think otherwise about corporate responsibility.
These obscene bidding wars between nations, states and localities only guarantee more shifting of assets from working people to billionaires through an already unfair tax system. Governments representing working people need to organize, legislate and act the same way union members do, determined not to undermine each other's bargaining power.
How that ever happens, is beyond me. But thinking about it is the first step.
11
This whole "incentivization" thing is a big rip-off of the residents of the City, we need more people and development less than practically any other locale in the USA, every affluent kid in the world wants to come here to hang out with each other. Our subways are stretched thin and overburdened, and we pay companies to come here? Most Amazon jobs pay miserable wages, so presumably this new LIC HQ is strictly for executives? The others wouldn't be able to live within many miles of their work place. Any high-paid employees would want to live in Manhattan or Brooklyn, so it's hard to see what benefit LIC gets out of this. Maybe new housing could be built expressly for Amazon employees, preferably along the G line of the subway, which could use a reason to exist.
8
With more than two billion in tax incentives, where will the revenue come from to improve the already overtaxed transit system?
Some techies like a balance between the human world and the natural world. We don't all want to reside in the mega city.
At what point does the cost of living and the stress of getting around make a place no longer attractive?
7
Bottom line: Amazon gets NYS/NYC to pay Amazon to do something Amazon desperately wants to do anyway (and that Amazon would have done for free). Jeff Bezos walks away, laughing.
Face facts, folks:
1. NYC is well on its way to being "Hong Kong on the Hudson," with everyone crammed into little apartments for big rents, and having horrendous commutes.
2. MOST of the jobs offered by Amazon are the "do you want fries with that" of the tech world.
12
Can't say I'm surprised by the kneejerk, nearly 100% negative comments about Amazon's move to Queens, from the same people who said the Barclay Center was going to destroy Brooklyn.
Yes, affordable housing and an antiquated subway system won't be helped by the influx of 25,000 new workers.
But these issues have been an ongoing problem for years, and the innovative thinking to resolve them long lacking in our politicians.
In exchange for the tax breaks, perhaps Cuomo and de Blasio could entice Amazon to use its strategic planning expertise to help find mutually beneficial solutions to these issues?
www.newyorkgritty.net
3
@mivogo
Perhaps they could entice them by withholding the tax breaks.
5
I'm sorry NYC, you deserved better.
7
This silly argument over "who benefits whom" has me chuckling. Socialist politicians like Ocasio-Cortez contend that limiting the taxes that AMZN pays is somehow "giving away the store." Do none of these economic dim-wits understand that value creation is decidedly NOT a two way street? Government creates NO value, and could not EXIST without resources first taken from the private sector. If OC thinks otherwise, she should try operating in Congress with ZERO tax revenue. She couldn't even keep the lights on.
9
Seattle could have stopped Amazon way back but since the city was a back water and government wanted big business to move in, we let Amazon have it's way with Seattle.
Now we have needles, tents, crime through the roof and a homeless population that has move here to get in on the "cash cow" entitlements from the socialist city council.
NY could have put the breaks on the HQ partnership but it's big government decided not to. They wanted a "marquee" business in their city.
Like the article said, Amazon is not required to hire locals - being a local is not a skill set - you actually needs skills and that requires talent and hard work.
I love many of the changes in my city since Amazon has been here.
But many of us are sickened by the rocketing increase in crime due to drugs, criminal activity and public defecation, etc with the migration of homeless people to our city.
Get ready NY, your in for a bumpy ride!
3
@pnp: I hate to break it to you, but NYC is FULL of "marquee" companies; Amazon is just one more.
We already have plenty of homeless people, too.
And NYC has an enormous number of talented people who work very hard. I'm guessing you've never been here.
6
@pnp I am not familiar with local issues in Seattle, but crime, drugs, and public defecation are bad behavior. NYC, working with NYPD, effectively curbed this several years ago. It sounds like Seattle can use a little of what we used to call 'Giuliani Time'. While it's currently a bit out of fashion, I hope NYC does not let it creep back in. The streets of Seattle, and from what I read, San Francisco, are the result.
1
And to think New Era Caps is living the Buffalo area. Maybe the State should invest in that business too. An economic gain for NYC and a loss for Western NY.
I wonder how much the subway will cost to fix? If NY had put that money into infrastructure instead of corporate welfare, would it be better off? These questions will be answered in the years to come.
7
@Solis of Texas The subway fares need to be higher, and the labor unions need to be curbed. This is how I imagine they'd handle it in Texas.
Just another form of corporate subsidy ( in this case secret). Industrial
Development Agencies (IDA) all over counties in New York State grant these deals for private businesses and developers through Payments in Lieu of Taxes (PILOT) .... building value not fully assessed on tax roll
And other incentives that do not add funds or sales tax for construction materials to the county and state coffers. Who pays indirectly?
The existing property owners. My community holds these meetings at 7:30 am in the Town Hall. Furthermore there has been no oversight as to verified job creation. These are not "public projects " but restaurants, hotels, office buildings and residential rentals at market rates. Corruption at its finest.
8
The article asked what the companies give back to the communities. Individuals in those companies may give back to the community, such as providing a school program through Amazon, and companies have made promises such as thousands of jobs, but many promises fall through or don't last very long. In my opinion, companies need to make promises for the environment around them to help the physical world, such as providing funding for a community park in the midst of the concrete jungle, instead of solely adding another industry to New York.
6
What Does New York Get? Simple: a bunch of really good jobs. That’s what makes New York thrive. The people that get these high-paying jobs will pay rent, go to stores and restaurants, and pay a lot of taxes. This will all help employ plenty of people who won’t actually work for Amazon. The reason New York is such a great city is that we do have a lot of people with high-paying jobs. There are plenty of other American cities that don’t have that, and they’re certainly not thriving the way NYC is.
Yes, there will be infrastructural challenges, and yes, neighborhoods will be disrupted. None of this is bad. “All of this has happened before and will happen again.”
15
New York has plenty of high paying jobs and can easily attract more without the help of a behemoth like Amazon. What New York desperately needs is good paying jobs and affordable housing for working people, because without them the city won't function.
44
@Rick The first half of your comment is a fair and reasonable point and one that I would agree with. However, I take issue with the second part of your comment. To say that neither infrastructural challenges or the disruption of neighborhoods is "bad" is neglectful, ignorant, and high-minded arrogance. You may not take the 7 train as part of your commute, and you may not have ever been priced out of a neighborhood, but it's incredibly disrespectful to the people (yes, people) whose lives are being disrupted to say "none of this is bad." Not being able to hold onto a handle bar in the 7 train due to overcrowding is most definitely bad and dangerous, as is moving your children and yourself out of a neighborhood after having settled in for many years.
The reality is that gentrification, and all of its associated challenges, will continue to occur as this is the manifestation of human nature. But it always comes at a price which is 100% "bad" to those who are effected. I would hope that you might revisit the second half of your comment out of respect to everyone else whose lives will get worse as a result of Amazon's establishment of HQ2A.
26
That’s all great Rick, with New York getting all those great jobs! But Amazon should pull its own weight and pay the piper. No tax incentives,pay the taxes for the infrastructure to support 20,000 people.
We don’t need Amazon, they need NYC. Pay the price
31
Kimmelman mentions “how New Yorkers like to operate”, portraying an urban paradise of public spaces, glistening trains, and democratic institutions devoted to the public weal.
Lost in this paean was mention of one of the most corrupt State governments in the US, and a subway system run by and for corrupt unions and the corrupt public agencies who hire them.
Has Kimmelman read the Times’ expose of how the subway is run like a giant pig trough with corrupt bidding, no-show employees, and padding of contracts every step of the way?
For this public corruption is also part of the story of how “New Yorkers like to operate”
11
@Space needle Amazon may have gotten incentives to move here, but once here, they just might use their leverage to force improvements in government and efficiency. Or am I dreaming?
1
Amazon - 1
Taxpayers - 0
7
Can someone explain to me why NYC is PAYING Amazon to move here? It is a PRIVILEGE to be in NYC and Amazon should show some humility - and Amazon should be PAYING NYC for the privilege of ruining another neighborhood or two, and messing up the subways, and bringing in too many entitled people who think they own the place. Guess what, Amazon, we don't want or need you here; YOU need us!
16
NYC is not paying Amazon anything. Amazon is getting a tax break but they are still paying taxes.
1
@Casey Penk: And whose pockets are the "tax break" $$$ coming out of? OURS - the NYC taxpayers. So yes, NYC is paying Amazon. You can re-word it any way you want, but NYC is paying Amazon to be here; if Amazon were not moving here, NYC would have more tax $$$ in its coffers.
8
Amazon has grown from nothing to a business with 177 billion dollar revenue without NYC. It can’t say how much NYC does or does not need Amazon, but I think it is safe to say they don’t need to be located in NYC and could just as easily have picked another location, near or far away.
To judge by most of the comments in the thread, ambitious engineers & coders are either too busy to read articles like this or too savvy to pay attention to grumbling from the balcony.
4
This for me personally is the last straw. Seeing the city I was born in lose its flavor, quaintness and originality is too painful to bare. I know that the only thing that never changes is change. Through the decades I was hoping the what made NYC unique would continue to evolve and be a driving force for the creativity that has transformed the globe. Unfortunately all of NYC is going to meet the same demise as SOHO, an artistic oasis that was powered by pure unbridled creativity reduced to trendy shops and chic restaurants, with the artists, musicians, authors and others priced out of what they created. Yes, there was a flavor to my NYC that has been replaced with steel, glass and money, but no personality. While I can afford to live here, I choose not to anymore as there is less and less to like everyday. Amazon may be a financial boon to NYC, but as age has taught me, money is truly not everything.
18
I seem to remember that in NYC, as in most major cities, people walking around with obviously more money than the locals are easy targets for mugging. Since Amazon is under no obligation to hire current NYC residents, it is a sure thing that a significant percentage of new Amazonians will be from out of town/state. Of course NYC will not want their employees mugged, or even having to look upon the poor albeit at a distance, so kiss the last vestiges of poor and working class people within 20 miles of Amazon goodbye. Where will they go? Maybe they will try Seattle.
1
@Mrs. Cat Are you saying you want muggings more than Amazon? And unless there is some long distance commuting, the employees will be NYC residents, either existing or future.
3
@Mrs. Cat
What utter nonsense, muggings are now exceedingly rare in virtually every part of New York City, you must have last been here in the Disco Era.
4
I hope both local/regional governments in the so-called winning cities did a deep investigation of what happened to Seattle before they threw all their resources at Jeff Bezos to get his notice.
3
Stop mentioning the BQX streetcar project like it’s a good thing because it’s not. It will do more harm than good.
What you should be touting is the Triboro RX. A subway line that will provide service to more New Yorkers and won’t be built in a flood plain.
9
Tech is like every other industry. It thrives on gossip and personal relationships, which are only to be found in cities. The fact that NYC's economy is so diversified among so many sectors works strongly in its favor: Where else can Amazon pull in major talents and resources for/from fashion, media, advertising, world government, biotech, etc. Just the fact that NYC is, with London, THE publishing center would make it attractive to a company that is built on book sales.
2
I don't get it. We have a an overwhelmed transportation system that the governor refuses to adequately fund, a housing crisis for the lower and even middle classes, and an underfunded school system - and we are going to create even more demand for transportation, housing, and schools? While reducing the taxes Amazon would pay? AND we get no say in it?
32
@maggie While corporate Amazon gets generous tax breaks, their employees will pay taxes on their income. If it does meet the prediction of 25k workers at $100k per year, that's $2.5 billion subject to tax. That should help pay for some of what is needed in NYC. Additionally, other jobs will be created to supply & service both Amazon and their employees. Yes, there will be disruptions and neighborhoods will change, pricing some people out, but as far as the city's economy goes, it's a benefit. I understand that for many, the trade-off is not worth it.
3
@Rob Mis: "neighborhoods will change, pricing people out, ... but it's a benefit" - WOW!
Thanks for your absolutely Trump-ian take on whether people who've lived in NYC for decades (and who make NYC into the kind of city Amazon, or any other company, would want) should be forced out, just so Jeff Bezos can be worth a few billion $$ more.
I guess all the regular workers need to move to a slum somewhere?
7
I get that these council members and representatives need to talk tough for their constituents. But Amazon and other tech companies bring billions of dollars in economic development via high-paying jobs with good benefits. We should be fighting fast food chains that bring in minimum wage jobs, not solid upper-middle class employers.
5
@Casey Penk Hear, hear! Let's get a moratorium on any new outposts of Flavors, Pret a Manger, Cafe Europa, Fresh & Co., and Dig Inn! And, while we're at it, closed down the ones currently in operation!
@Casey Penk: But then where will "tech" (*cough entitled cough*) get their coffee and lunches?
2
Let's stop the populist rhetoric implying that tax subsidies are money that NYC is GIVING to corporations instead of spending on infrastructure, housing etc. A tax subsidy is not a payment, it is a discount. NYC accepts less than official tax rates, but it still generates taxes it would not otherwise receive. Think about buying the greatest new gizmo at 40% off. No one is giving you money. You are just paying less than you otherwise might. Even if your purchase is a loss leader, the seller expects network benefits or buzz from your early adoption to provide even greater profitability from others. Further, Amazon will provide thousands of high paying tech jobs that will generate substantial personal income tax.
Other than a few new high rises along the river, Long Island City is woefully underdeveloped with hundreds of acres of rundown marginally utilized one and two story former manufacturing space. That space is only one subway stop from Midtown and has immense potential value and thus tax revenue. But redevelopment has proceeded at a glacial pace. Amazon will spur development there in the way that Brooklyn took off in the 2000s. Even if Amazon paid no tax for 20 years, the enhanced property tax values across an entire swath of the city would more than compensate for any losses on Amazon. Zoning variances for that development will yield many new affordable housing units and NYC business growth will take another step toward sustainability by moving further beyond Manhattan.
13
@Tifany Maybe the problem is that we should have developed that area (and the similar ones around the city) already, without waiting for Amazon? It’s not as if there would have been an excess of housing if we had done so, or if we couldn’t have collected years of property tax already. And it’s not as if we could expect the new developments to match the increased demand, or the infrastructure upgrades (if there are any) to be done in time for the increased population.
And you can play on words about whether a rebate is giving money to a company or not, but at the end of the day if no one offers tax rebates to Amazon, they will still build their HQ somewhere (maybe in New York), and pay their taxes there. Full price. Compared to that situation, we are indeed losing money as taxpayers, and that’s a fact rather than populist rhetoric.
7
@Tifany Excellent point! For years, people have complained that Fortune 500 companies have been in Manhattan, with the outer boros ignored, and now that one of the biggest is moving to LIC, people complain.
7
@Bob Robert I don't disagree with you that this space should have been made conducive to development long ago. That is most directly a function of political donations from Manhattan developers/landlords keeping prices high by limiting supply of viable alternatives. You raise a valid point about the increased demands that will be placed on infrastructure. I have no idea, but hope the Mayor required some upgrades as part of the deal. It is easier to discount taxes and have a corporation pay for infrastructure expenditures than it is to guarantee the funding through multiple city budget cycles.
That said, the "play on words" is calling a tax discount money that we are giving away. It is money we don't currently have that could easily have gone to another city. Part of America's strength is competition among individuals, businesses and cities that makes most parties stronger as they strive to provide more value to whomever is buying their services. As long as cities compete for jobs and high value tax payers, NYC will have to negotiate rather than set an inflexible schedule for its largest customers e.g. Amazon.
NYC is a landlord. Property taxes are the rent it charges. It has some prime developments (read "neighborhoods") in Manhattan and Brooklyn, but LIC is a redevelopment project and needs an Anchor tenant. It makes much sense to give a discount to an anchor who will make it easier to secure new tenants for the rest of the neighborhood and increase overall rental rates.
2
25,000 high paying new jobs. Most cities would do almost anything to get those jobs and rightly so. Growth like this do not come along every day, week, month, year, decade etc.I am glad that this area, the DMV was one of the selected sites and will accept any negative impact.
7
Don't know how all these new employees will get to and from this new HQ LIC unless they build a new subway. The current one is beyond crowded. Also, where are all these people going to live? Bunch of new high rise residential towers in an already crowded but otherwise charming neighborhood? Sorry, but I suspect Amazon is going to lure a bunch of workers from the Queensbridge projects and not pay them well.
6
@Scott The employees will be taking a reverse commute, out of Manhattan and into Queens, so the subway traffic won't be affected that much.
5
@Scott You'd be surprised. There are so many residential buildings being built right now. The neighborhood is easily going to handle the influx.
3
@HKGuy I think it's more likely that a lot of Amazon workers will live one neighborhood over in Greenpoint and along the G line in Brooklyn, which already is going to be hell once the L shuts down at exactly the same time Amazon starts LIC ops.
3
More worker bees with no share of the honey.
12
I want to know what the States of Virginia and New York promised Amazon to get those satellite hqs. As one of the most valuable companies in the world, Amazon shouldn't be holding out its hand for subsidies or abatements.
8
How is this not on the opinion page? Why does the author float again the unfounded claim that regulation and zoning rules are causing high housing prices - is that from, what, a REBNY press release? And why interview Vishan Chakrabarti - "Mr. I Love Towers Everywhere" for this story?
Really, the biases here are just depressing.
11
@LE It is irresponsible to imply that zoning and regulation are not major contributors to NYC's high housing costs.
Only Manhattan, parts of Brooklyn and select other corridors are covered in high rises. ~80% of NYC is covered in decaying one to three story sprawl ripe for redevelopment. Like Singapore or Taiwan, NYC could double apartment stock by turning whole blocks of row houses and low-rise apartments in to 50 story towers surrounded by green space and offering rehousing to current residents in the new buildings. But zoning, 35% affordable housing, and our courts' willingness to entertain most any lawsuit prevent such redevelopment and keep prices rising for big developers and landlords in Manhattan.
NYC construction costs are the highest in the world. Interest costs pile up while every construction project, even as-of-right, obtains multiple permits, community board and landmarks hearings. The preservationists fight virtually every demolition. You have to hire $1,000 per hour land use attorneys and expediters (who are likely charging you for bribes) lest your project languishes for years waiting for permits. Even minor zoning variances require a variety of additional hearings. If construction realities dictate minor changes from an approved plan, the project is tallying interest awaiting new hearings. And, Builder Magazine says average NYC construction wages have topped $100 per hour which is in no small part due to prevailing wage and other highly pro-union regs.
4
@LE How long have you been reading the NYTs? It's been a longstanding (and depressing) trend for well over a decade.
1
"Google and Facebook already have headquarters here...."
Incorrect, Google's and Facebook's only headquarters are in the Bay Area. They have offices all over the world, but headquarters only in one place.
9
@JustInsideBeltway Technically correct, but both companies consider NYC their "Eastern HQ."
2
"Google and Facebook already have headquarters here (established, not incidentally, without state subsidies)."
Now, that's what I call a road map; now, if only Gov. Cuomo is a man who actually seeks direction when lost...
5
Probable outcome: Wal-Martization of this great city. Unless somehow these deadbeat business practices of underpayment and exploitation should fall away. (Who needs businesses that contibute so little to their host communities, anyway?)
8
Bezos isn't stupid; he knows that liberal New Yorkers support his political views and therefore will be more than happy to overlook Amazon's predatory business practices that continue to drive thousands of retailers and distributors out of business throughout the country, not to mention Amazon's long record of abusive work conditions for seasonal temporary laborers.
11
@ERA: Why do you blame just "liberal New Yorkers"? How many people have Amazon Prime memberships - and are ALL of them "liberal New Yorkers"? I don't think so!
It's ALL the Amazon Prime members who are happy to overlook Amazon's predatory business practices.
Bezos isn't stupid, but Amazon Prime members ...
1
Can we please stop with this BQX streetcar non-sense? Add some bus-lanes with accordion buses and make a connection at Atlantic ave between Atlantic Ave Barclays Center, the Lafayette C, and the Fulton St G. They're literally a 1/2 block to a block away from each other and no connection exists, it's crazy. You want a connection between all of Brooklyn, build one tunnel and boom! much better than a street hogging, slow and expensive monstrosity on the surface.
9
@Asher You're probably largely correct, however, trolleys seem to have a modern yet retro charm - that's all I can figure about the plan. The articulated buses would be cheaper and could even be electric!
"We need more jobs and opportunity!" *enter Amazon* "Wait, we DON'T want jobs and opportunity!" Um...
6
@Charles K.
How much taxpayers money spent "per job"?
1
From the Big Short (Think of Amazon as Jared and NY as Vinnie):
Jared Vennett: When you come for the payday, I'm gonna rip your eyes out. I'm gonna make a fortune. The good news is Vinnie, you're not going to care cause you're gonna make so much money. That's what I get out of it. Wanna know what you get out of it? You get the ice cream, the hot fudge, the banana and the nuts. Right now I get the sprinkles, and ya - if this goes thru, I get the cherry. But you get the sundae Vinny. You get the sundae.
4
May New York and Arlington gain something of value from getting the new Amazon HQs. We in Chicago saw how our leadership fell over backwards trying to give away anything and everything for this deal. Well, Rahm Emanuel found out he wasn't up to the task (or maybe Chicago wasn't). Soon a new leadership may work to improve Chicago without Amazon and NYC and Crystal City will find out just what they really got out of this deal. Leaders like bright shiny toys just like all greedy children but too soon they see how quickly the shiny toys rust and become junk. Rarely do civic leaders see far enough into the future to recognize the positive effects of carefully invested growth stimulants like education.
8
@RLW NYC spends a bloody fortune on 'education' but over the past 50 years there have been very limited results, thanks to the stranglehold of the teachers' unions and the fact that anybody who can afford to pulls their children out of the system. May Amazon work around that system and push for new ideas, not just more spending.
1
Apropos - if Amazon's prospective LIC employees are looking for NYC's stellar schools and transit systems mentioned, may I suggest a thorough review of coverage of such by the NYT, the WSJ, or any other local paper. There's a wealth of information to be had there, and - dare I say - not what they are hoping for. But far be it from me to burst the bubble.
6
Hoping that Amazon will do anything for the city beyond lip-service PR is ridiculous. Anyway, as a society we would obviously rather have that money be spent by our elected officials (on which we have some control and expectation of transparency) than by a company whose only legal responsibility is towards its shareholders.
Building universities and making the city attractive through an employable workforce (including from populations with a difficult background), decent housing conditions and good infrastructure attracts companies, and we should definitely ask our officials to do that. Unfortunately if we leave them make one-off deals, it will always be the favored solution to attract big-ticket companies: ask Amazon whether they would rather have the mayor spend ten million in infrastructures and education, or give them a ten million rebate, and what do you think they will say? On the mayor’s side, which one do you think has the most political visibility?
And let’s not forget that as an American society, deals like that make us poorer, because Amazon would still have built these HQs in our country, tax rebate or not. Cuomo (and whoever that Crystal City official is) has just been doing some blanket-pulling exercise, this is shameful and New Yorkers should not let him do that in their name, whether they end up winning from it or not.
9
There is some irony in Amazon, a company built on the notion that brick and mortar stores are obsolete, requiring the very population density for employee recruitment that thrives off of businesses such as those, where humans interact with one another and not primarily with computers. It By continuing to threaten the economies that make urban areas vibrant it also threatens its own vitality. If cities were smart they would push companies like Amazon far away rather than embracing them.
21
Once again, SOME cities(not all)have chosen to offer boatloads of taxpayers money to attract industries that need it like I need a cold, which if history has shown us anything in these matters, there is rarely any "strings attached" to these deals on the part of the company that guarantees that they will provide the jobs they promise and provide the stability of employment and staying at the same location long term.
Once a community starts to do this, a precedent is set in which any company that might consider setting up shop in the area is within its rights to demand tax cuts and/or rebates before they even consider promising anything.
If a community is going to spend taxpayers money and attract business, do it where it will do the most good in further developing a better and educated workforce and improving infrastructure, an area where, compared to much of the rest of the industrialized world, America is drastically falling behind.
By the way, has everyone forgotten that this administration just recently lavished a TRILLION AND A HALF dollar tax cut on the wealthy and corporations(including Amazon) yet, that is still not enough? What about the BILLIONS handed out to banks that were "too big to fail"? What did the taxpayer receive in return for that?
STOP with the corporate welfare already, America. There is far too many other more important areas of concern in which communities desperately need that money. Bezos doesn't need another yacht.
11
@Deus It is true that the Federal government handed out billions in TARP money to prop up the US banking sector during the fiscal crisis in 2008/2009. In fact, that money was paid back with interest and the government made a tidy profit. Per the US Treasury website, there was a profit of $30.1 billion on its investment. I think that was a win for the US economy.
5
@Golda
Maybe, but at an extremely high price. The loss of 8 million jobs that are just coming back to where they were in 2008, the banks ceased loaning at the time to particularly small businesses and these banks have consolidated and are bigger than ever with considerably less regulation.
Once again, where did the investment "win" go? Like I said, most of it went back into the hands of the top percentile of money earners and corporate tax breaks, NOT the average worker(who footed the majority of the bailout) and certainly not in any badly needed infrastructure improvements.
You better hope that the next recession is not a bad one, because IF these same banks run into trouble, this time there is no "Plan B".
4
As a fifth generation New Yorker, it is has been incredibly depressing to see the rapid luxurification of NYC in under 20 years, enabled by Mayor Bloomberg …..
The destruction of neighborhoods, particularly in Manhattan and Brooklyn; middle/moderate/low income residents forced out by real estate speculators and greedy landlords; the tsunami of luxury buildings for young affluent people (like Amazon staff), pied a terre and the international super-rich hiding their money; and destruction of small shops and neighborhood restaurants, all replaced by mall stores and chains.
The East Village as one example, is now just a place for NYU students and recent grads to chunnel in and out, and party.
What has happened in NYC is not "normal" change or gentrification - it is hyper-gentrification which destroys civic life.
(BTW all this is chronicled in detail in the blog and book Vanishing by Jeremiah Moss)
Amazon will just be the big tsunami, negatively impacting housing and transportation.
And confirming that NYC has been transformed into a playground only for the wealthy young techs and older 1%. Complete wealth/income inequality - NYC, the new serf city.
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@LS Blaming Amazon for the gentrification is barking at the wrong tree. Gentrification happened in New York because politicians never cared about building new housing in response to the increased demand, and people never cared about it either, or even fought against it.
Luxury housing did not create the people who want to live in New York. It doesn’t matter if you don’t want the rich Amazon employees or the foreign billionaires to come: they will come if they want to and find whatever housing suits their needs. If there is not enough new-built luxury apartments they either buy lower-quality ones and renovate them, or just lower their standards. That is exactly how gentrification works.
It’s not because we are so worried about the well-being of the rich that we want more housing skyscrapers to be built: it’s because if you don’t build them housing, they will take yours.
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@LS Do you know what was heartbreaking to me? Seeing the city abandoned by the middle and upper middle class in the 1960s and 70s and left to rot away. Compared to that, I'll take gentrification any day. Gentrification brings taxpayers. Decrepitude brings Detroit, MI, and Newark and Camden NJ.
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As a resident of Roosevelt Island, I am dreading both the possible increase in rent and property prices, and the thought of competing with more people on the Subway if Amazon move in across the East River. Regarding development, it's a mixed bag. More services is always great, but infrastructure would have to be greatly improved in LIC and surrounding areas first. There's another two residential buildings planned for RI, which will further strain the infrastructure here, and which I have yet to see a plan to address. There's always lots of promises and claims that local residents will be listened to, but when it comes to private companies making a buck, it rarely happens and it is the residents who will continue to suffer.
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@catee I've lived here for 36 years. I'm ecstatic about this deal. It will bring many more good things to RI than bad. Wait and see. Plus, the last 2 buildings have been long part of the master plan. The infrastructure will survive.
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I just heard Joe Connolly on the radio reporting that Amazon chose NYC and DC because of the wonderfully-educated workforce (they checked the SAT score of local colleges), proximity to other tech-genius companiesetc.
I have another explanation: Amazon chose these places because they are the national centers of media hype -- Bezos' biggest product of all -- and the math-challenged press eats it up.
Let's start with the claim that Amazon will add 50,000 employees. Assuming an average salary of $75,000 times 1.5 to cover overhead, that would total $5.6 billion.
(I think these costs are conservative for expensive cities like NY and DC, and one can only assume these are not low-wage warehouse workers, like to bulk of AMZNs employees.)
Amazon makes only about $3 billion in profit right now, on sales of $178 billion, or a 1.7% profit margin.
Assuming shareholders remained satisfied with this razor-thin profit margin, Amazon would have to grow its sales by 80% -- to $319 billion -- just to make up for this added cost,
Amazon will add 50,000 NY/DC employees just as soon as they have blimps in the air tending the fleet of drones delivering the packages!
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@Peter Blau
I don't think the headquarters in Seattle even has 50K employees, yet this claim of creating 50K jobs at a second headquarters was never questioned in the press.
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@Peter Blau Amazon's sales grew by 230% over the past 5 years. And you're right, maybe they will have drones delivering our packages in 5 years ¯\_(ツ)_/¯
@Jason: They already HAVE drones - human drones who are tasked with delivering our packages to our doors, and who often enough just LEAVE the packages there.
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More money for the rich is all that counts these days.
The rest of us and our lives are don't amount to a hill
of beans which can easily be soaked and cooked.
"When the bought breaks...." And it will.
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How are the low-wage Amazon workers going to afford NYC? Not everyone is going to be earning a living wage at Amazon. Everyone knows how badly they treat workers and how poorly they are paid. Or is Amazon hiring only incredibly expensive white-collar executives to fill its campus in Long Island City? Not everyone is Bezos, who can siphon off whatever he wants. So what are the average workers going to be paid? Will NY also wind up subsidizing Amazon, too, with welfare for its underpaid workers who won't be able to afford NYC rents?
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As I posted with another article on this subject:
Another article in today's NY Times says, "The company also said it will develop a smaller site in Nashville that will focus on operations and logistics. Amazon said that site will create 5,000 jobs."
Good Old Jeffrey. One of the most insatiably greedy, socially unconscious, morally/ethically bankrupt Robber Barons alive. He puts the real jobs - where real people labor like robots for the lowest wages and benefits he can get away with - in Tennessee.
Do you think the Good People of Tennessee - a true-blue RED state - think he did them a favor? Therein lies the real problem, ladies and gentlemen.
WE THE PEOPLE must stop relying on lesser human beings like Jeff Bezos to "create" jobs. They only know how to create/steal it all for themselves. They are demented with their stolen/inherited wealth. OUR hired/elected lawmakers must stop paying these Robber Barons for taking OUT of OUR communities and putting nothing but congestion and rising prices into them.
In a few years the Good People of Nashville can take over the plant and turn it into a true employee-owned company where every employee shares equitably in responsibility, company direction and profits. No outside investors to steal the profits.
OUR story of inclusion and Social/Economic Equity for ALL Americans starts NOW.
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@njglea - I seem to recall the last paragraph (or similar) straight out of President Nicolás Maduro's playbook. Even a cursory look of failed socialism makes one wonder what you've been reading. You also seem to have lost sight of the very real value Amazon provides for hundreds of thousands, both in urban and rural areas.
That said, I agree with you and others about some of the very real concerns raised in this article, both urban (housing and infrastructure) and rural (particularly working conditions for fulfillment centers), and I won't even get started on the political corruption that allows the worst of these. However, this should be a respectful discussion conducted in the marketplace of idea, not a polemic against tech. You're words are more likely to influence others when formed with reason and delivered with respect for all. Still, I'm glad you wrote. Thank you.
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So this is what they call Capitalism? Before Amazon the state of New York was already giving away $9 billion a year in "tax incentives" to corporations, so Mr. Kimmelman's $90 billion a year for all of the USA is way too low.
But hang on to your wallets, in NY all corporate tax incentives amount to a whopping 76 percent of the state's gross taxes and yet are so ineffective that the companies receiving the incentives add just 3.53% to NY's gross output.
"Economic development" money is just another word for corporate welfare and it means tax hikes for actual people. Because of course when properties or corporations are exempted from taxes, the tax load is spread out over the remaining taxpayers - so everyone else pays more so these few special corporations don't have to pay anything. And unlike people receiving social services, corporate welfare recipients face no penalties for failing to live up to their promises (job creation etc) that allowed them to receive tax incentives in the first place.
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My son lives in Tacoma and says that rents in Seattle are out of control because of Amazon. 25,000 people could easily consume 50 high rise apartment buildings.
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Good article. My one nitpick is this sentence:
"I'm not saying companies move, or should be expected to move, for any other reason than to make money."
One of the man-made credos that people have come to take as a truth is that the only important stakeholders in a company are the shareholders. It's time to re-examine our assumptions and start to value human flourishing above profits for Wall Street.
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There's an obvious power play going on at the very very high political and wealthy elite here that is beyond even the typical high-earning professional New Yorker. They are laughing all the way to the bank, at the expense of everyone else who has to do things like worry about commute times, $/sq ft of apartments, mortgages and the like.
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Some quick math - With state and local taxes close to 10%, 25,000 people making $100,000 will generate $250M in state and local income taxes annually. This does not include sales tax for the goods they buy, property taxes on their homes, etc. I’m not advocating for a corporate handout, but even if Amazon as a company pays $0 taxes, their employees will generate hundreds of millions of dollars in revenue we can use to fund infrastructure, schools, affordable housing, etc.
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@TM: 25,000 people earning $100,000 each is a cool 2.5 billion dollars a year. Someone else pointed out that Amazon's annual profit is just 3 billion a year. Therefore, unless Amazon plans to increase its revenues by a drastically high percentage, there will not be 25,000 employees earning $100,000 a year. And that is the problem. Most of these 25,000 will make less than that and yet will still be expected to find affordable housing in NYC.
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@TM
Amazon has "allegedly" promised this growth over a 20 yr. period, hardly, anything of any real consequence immediately. If history has shown us anything, despite the "corporate welfare", governments rarely introduce any "strings attached" to these deals that mandate the company receiving the handouts follows through with their promises.
I also have my doubts that ALL the employees working at these locations will be earning the salaries that the company has claimed, we will see.
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@TMDoes your quick math include incentives, because I am sure that there will be income tax rebates that go back to Amazon.
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I’ve seen the dark inside of how Amazon works, and I know Silicon Valley intimately. New York is kidding itself if it thinks that a satellite office of what is essentially the 21st century WalMart is going to help it rival San Francisco or Silicon Valley. Culture matters in entrepreneurship and Amazon’s controlling sweat-shop culture (and I’m talking white collar workers workers, let’s not depress ourselves about how they treat hourly workers) is antithetical to fostering the kind of risk taking people that entrepreneurship needs to take root. Case in point, see Seattle’s not so thriving start-up scene. In 2016, nearly 20 years after Amazon’s founding Seattle had exactly one “unicorn” start-up - and that was a biotech company. New York’s money would have been better spent trying to lure AT&T back from Basking Ridge.
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@Mark I think Tableau is doing alright.
@Mark Hey, Keep your greedy palms off Basking Ridge, my town. BTW, AT&T moved out to Texas a long time ago when Southern Bell (I think) bought it but retained the AT&T moniker. Its corporate offices changed hands (Pharmacia, Pfizer, Verizon) and is now used by Verizon.
I remember hearing that the avg salary for the employee would be $100k. This was a year ago when the bidding was still live. Is that still true? When will someone dive into the cost of living for these 20,000 some odd individuals? Oh wait, cost of living & their commutes. Did anyone look at a subway map? There’s one line there. Further, if they think Brooklyn is affordable, I’m really confused.
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@Jill L There's a couple more than one line there. You can get the E, M and G at Court Square. Of course if all the Amazon employees will be making $100,000 each, perhaps our shared concern about the transit infrastructure is misplaced. They'll all be taking Uber.
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One line?! That may be true for Greenpoint and the north side of Williamsburg in BK, but not for LIC in QNS. The map I'm looking at shows the 7, E, F, G, M, N, R, and W all run in LIC. Even conceding that some of these travel the same route (as either Express or Local trains), there are still at least four different lines.
Whether the MTA still manages to muck them up on a daily basis is of course another question.
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You’re absolutely right.
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Corporate consolidation to behemoth size, in part due to failing regulators, causes problems. Jobs are concentrated in fewer locations, tax revenues go down because of the lobby and economic power of these giants, promising startups only aspire to be bought by the giants anymore because of the economies of scale and unfair competition (tax asymmetry and subsidies) .
After the futile HQ2 charade that embarrassed governors and mayors, Amazon went we the obvious choice it probably planned all along. The other corporations of course took note and now know their jobs too can be tax payer subsidized if they play their cards right.
What a fiasco.
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Newark would have been the best choice. The city has PATH trains, an international airport, NJPAC, sports arena, a recovering downtown, access to major highways, universities, real estate area, etc. However, Christie kaboshed Amazon-type business development when he cancelled a new Hudson River Tunnel as too expensive for New Jersey taxpayers. Seems like a bargain now.
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@eyny I think Amazon would be just another company moving into NY city, while they could have had transformative effect on Newark, NJ.
I think Newark should probably take a clue from Amazon (how it chose two sites) and divvy up their incentives to multiple companies to move in and create as many jobs.
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So typical. Beg, cajole to get them to choose NYC. Then when the deed is done, the narrative changes to "what will you do for us?" As long as business choose NYC, the city will do just fine.
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@RY I don't think it's true that the same people who wanted Amazon here are the same people who don't want it here. The narrative hasn't changed.
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NYC gets traffic, gentrification, and even more unaffordable housing!
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@MomT It's a shame that our "progressive" mayor and governor (who's distracted by shiny objects) couldn't figure that out.
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New York will receive more competition for affordable housing, more displacement of low income people, more people trying to use a worn out subway and street system. There need to be impact fees on these corporate behemoths to mitigate there adverse consequences. Instead we give them incentives.There is a value system reflected in all of this.
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@Mark C McDonald
There are impact fees, it is known as taxes, the city has their hand in our pockets in a hundred different ways. There would be money to pay for subways and streets if the local pols weren't so busy featherbedding their public sector union buddies with giveaways like early retirement and gold plated pensions in return for getting them elected.
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@Mark C McDonald They have to develop new infrastructure technology to be successful in Queens. Hopefully this will accelerate growth in environmentally friendly transportation and construction.
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Let's hope it works for the City but I have my doubts. I suspect this will just widen the gap between the haves and the have-nots.
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We live in the free market so that's fine too....
@Patagonia Would you rather live in a city of haves or have-nots?
Such cynicism. I like Professor Chakrabarti's idea and suspect Amazon might as well. It offers potential for training Amazon employees inexpensively, thereby providing excellent jobs to a lot of New Yorkers.
I worked in Crystal City (Amazon's other new site). It's an excellent choice for both the DC area and Amazon I suspect the LI City choice will equally benefit New York.
Kudos to Governor Cuomo. Loved his dad when I lived upstate, never much impressed with the son, but he got this right with his over-the-top courting of Amazon.
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@Donald Champagne
I appreciate your optimism. Does it extend so far that you'll cover the inevitable increase in my rent when greedy developers buy my building in hopes of scraping off some of that sweet Amazon cash?
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Given how Cuomo bent over backwards in order to woo them, I have little hope that Amazon will give back anywhere near as much as they take from the city. The whole process felt like a ruse to lower their taxes and other obligations in areas where they already had a footprint.
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@gigantor21 -Cuomo bent over, but I'm not sure it was "backwards."
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Boston is breathing a big sigh of relief that Amazon isn't coming here. We have enough to deal with, regarding out of reach housing costs, congestion and traffic.
Also, I think there is a huge difference between Amazon and "traditional" multi-billion-dollar companies like GM or Walmart. Amazon is notorious for not being particularly charitable in the Seattle area. The battle over the homelessness issue a prime example of that. They come in and they push all their competition out, but other than the jobs they provide, there isn't much else to say about them. The people in Long Island City who are renting, are soon going to find themselves pushed out to Suffolk County to find affordable housing. Good luck to you.
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Replying to the “good luck to you” to Long Island City phrase of one letter writer, apparently the site chosen is the light manufacturing are called Annabel basin, south of the QueensWest state park and apartments.
The breaking of the zoning involved is with the cooperation of big real estate interests, including a once-good-citizen corporation, Plaxall, that owns a few buildings and land nearby. Crains Business reports that the site, all ready threatened with massive “development,” is the chosen area.
Cuomo and our mayor, have taken a lot of contributions from big real estate, our soaring LIC soaring rental rates attest.
Breaking the light manufacturing area is one thing. Sharing in the asthma problems caused by the proximate Con Edison smokestacks is another. Ravenswood Houses, the nearest City project, has more than double rates for respiratory diagnoses. Con Edison shares the East River waterfront.
Plus, thousands of jobs in light manufacturing and movie making are threatened. Oh, let’s send those jobs to New Jersey. They are waiting with open arms.
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It seems odd to me that NYC would need to incentivize any company to move there (regardless of bureau). It is already America's greatest city and the issues that it has (mainly related to over-population) would seem to be exasperated by Amazon's new HQ, not alleviated. It would make more sense to require the company's assistance linking Brooklyn and Queens (as I imagine will be a popular commute for Amazon employees) than providing corporate tax breaks.
That being said the new HQ has exciting potential and fingers crossed that it works out for Amazon, NYC & the residents.
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