NYC doesn’t need to give welfare to attract business, Fox has a large presence there and they hate liberal New Yorkers!
1
Compare Amazon with cities that host the Olympics. Every one has regretted it. How successful is a business that can’t pay it’s own way? Is this how Amazon really makes a profit by being a freeloader?
“Tax breaks” are wrong. Either have the tax and apply it or don’t have the tax. No more loopholes for intergenerational and corporate billionaires.
1
Everyone is missing the real lesson from the Amazon deal: Amazon selected the sites based on factors OTHER THAN subsidies, most importantly, talent available. If elected officials subsidized the activities that create that talent, especially great education, their communities will flourish. Great schools and universities, publicly-funded "coding camps," free community college and lots of full.ride scholarships to universities--subsidize those. Watch the companies then come of their own volition. Great universities, free terrific community colleges and low-cost excellent state colleges are what built Silicon Valley. Subsidize great education at all levels, watch the companies flock to the area without subsidies and everyone wins.
4
Dear Ms. Badger,
PART ONE of three _ Part two to follow is second comment
Why would Amazon want to jump into the noxious political environment in NYC? The same people who approved the Amazon deal, like Mayor De Blasio, are now ready and willing to stab Amazon in the back for political purposes to assuage an angry minority mob, even though the majority of the electorate supports the Plan. An awful environment.
Mayor De Blasio agreed to a deal with Amazon. Now he slams Amazon because they were reluctant to re-negotiate because of his “new” Political position. He puts them in a position to negotiate with themselves. Didn’t they already have a deal with him? No surprise Amazon cut and got out right away. Why would they want to divert time, capital and effort into enabling De Blasio to renegotiate/renege on a deal he already signed off on? Clearly De Blasio could no longer be trusted. Shame on Bill De Blasio. He should have never gone down the negotiating path with Amazon if he felt so strongly on other issues. Or has the pressure of the AOC phenomenon and a minority of extreme politicians caused the Mayor to bait and switch Amazon after approving the deal, and thus destroying any trust Amazon had in him?
2
PART TWO of five
Even more concerning is the rhetoric from AOC. I watched her on TV say that she wants good paying jobs for NY while slamming the Amazon deal and calling the cancellation a win. Wasn’t the average salary expected to be over $100,000 for 25,000 Amazon people, with 67,000 good paying secondary jobs like construction, etc.? What is a good paying job in AOC’s mind? Even more amazing was when she said, now we can spend the $3 billion from the Amazon deal on teachers and healthcare. She has no understanding whatsoever of public finance. The $3 billion doesn’t exist. She can’t spend it anywhere. It was a “tax discount” over many years to incentivize and require Amazon to invest billions to create 25,000 plus good paying jobs in an area of the city that is partially vacant, or about to be vacant (Citicorp Lease expiration) and in dire need of rehabilitation. Yet AOC is telling the public a complete untruth about now using the $3 billion. Although in fairness, I suspect she does not realize she is wrong. There is no $3 billion in cash lying around for her and others to spend.
5
The question here is whether standing on principle - limited or no tax subsidies, expanded union opportunities for Amazon's workers and reducing the spread of gentrification - was worth the loss of the approximately 25,000 promised jobs and the estimated net tax revenue of about $6 billion over the next decade? I think that it was not worth it because Amazon simply moved elsewhere, benefited that community (Nashville) but left no economic benefit to the City and State of New York. The only real victory for Amazons' opponents is the moral one that they they "defeated" Amazon. But that defeat came at too high a cost.
3
NYC refusing to buckle to Amazon, makes me proud to be a New Yorker. I believe our example will encourage activists in more cities to resist the power of wealthy corporations to demand to be bribed so that they could live off the hard work of American workers. NYC does not need any jobs that degrade men and women. Good riddance to Amazon.
7
@Timshel: "NYC does not need any jobs that degrade men and women."
This shows the lack of knowledge regular citizens are up against, and the sort of false rhetoric which wrecked this wonderful opportunity for New Yorkers.
How does an Amazon job degrade men and women? These were HQ jobs. The average salary was supposed to be $150,000/yr. Experienced hires were poised to get $200,000 or up to $400,000 a year. We're talking about technical, design, engineering, and product management jobs. How are these salaries degrading?
Honestly, if those salaries are degrading, i'd like to announce i'm open to degradation.
1
If Amazon is such a great company, they should have decided to stay in NY and declined the subsidies. No one should offer these giant and extremely rich corporations subsidies. This shouldn't exist anywhere. Everybody else has to make it on their own. Why should they get this help taken from ordinary people?
7
@Y. K.
Few corporations that have the leverage to do so will decline state sponsored subsidies. The only way to address this issue is through Federal legislation. Assuming that it is not unconstitutional, the Federal government has to set out the ground rules that all states and municipalities must adhere to. Because unless all states and municipalities are operating under the same rules you will always have some that offerunreasonably high spoils to take an unfair amount of the new economic activity.
2
@Schneiderman Yes, that's how the EU works. Member states are not permitted to offer big perks to lure companies. Not that there's no competition at all, but not the grotesques you see in the US.
My understanding is that Amazon was not offered anything that anyone building a similar project would not have gotten "as of right" with the exception of the $500 million that had to be approved by the Public Authorities Control Board.
And an article in Crain's New York (https://www.crainsnewyork.com/op-ed/would-new-york-have-turned-profit-amazon) argues that the Amazon HQ would have been cash positive for NYC in the first year.
3
Reading this, I am not at all sure that the author understands (and wants the reader to understand) that most of the Amazon subsidies were promised over thirty years ago in tax incentives set up to draw businesses to a then-recovering 80's era New York city and state. Amazon is not a special beneficiary (other than a $500 Million grant from a discretionary program.)
Those interested can check the Excelsior Jobs Program, REAP and ICAP.
Or they can read the NY Times. This is from last November when the deal was announced:
"New York promised Amazon $1.525 billion in incentives, including $1.2 billion over the next 10 years as part of the state’s Excelsior tax credit.
...
New York City did not offer any special tax breaks to Amazon as part of the deal. But the company will be able to take advantage of existing city tax credits, including a program designed to encourage companies to create jobs outside the busiest parts of Manhattan. The program, open to all companies, could be worth as much as $900 million to Amazon over 12 years, on top of the state incentives."
Despite the very public nature of these long-established programs, the author closed with this:
"And politicians should beware the consequences of negotiating [huge subsidies] in private.".
Puzzling.
https://www.nytimes.com/2018/11/13/business/economy/amazon-hq2-va-long-island-city-incentives.html
4
Good riddance. As a lifelong New Yorker I was disgusted when this deal was announced as fait accompli after backroom deals. A helipad for Bezos? Really? Did anyone think about the optics of that? I welcome Amazon in NYC but not for that kind of money. I hope the Mayor and the Governor learn a lesson that what they did actually caused Amazon not to come to NYC, since they would have come were it not for this.
7
@HL
As one who travels between homes in Seattle and NYC I see the benefits of Amazon in the downtown area and the problems in Manhattan. When you say "... not for that kind on money ..." do you mean not for the $27 billion Amazon would have paid in taxes but maybe for $30 billion without the $3.4 billion in refundable tax credits?
I thought that New York residents elected officials to represent them instead of having a plethora of conflicting groups out shout each other as a form of negotiation.
2
@HL exactly, this author and all I’ve read yet propagate the myth that support for Amazon’s move here EQUALED support for this “deal”.
NOT!
I, too, supported their move here, but not for $3B.
Yeah but what about all the tax free bonds issued to finance tax payer financed stadiums getting minimum usage with a few minimum wage concessions jobs?
Amazon deal could have been better however I would take it over a stadium anyway.
We shall see how serious this “movement” is when the next pro sports team holds a franchise ransom for a shiny new stadium...
2
@Snarky we stopped the ghastly Manhattan sports stadium proposal, and the Westway highway real estate giveaway and neighborhood-destroyer. It’s COMMUNITIES that have to fight these deals, Bezos’ refusal to engage proved he cares NOT ONE PENNY for workers or communities: only for his pocket and power.
5
Finally, a win for humans against predatory corporate capitalism! In addition to extorting handouts like this from easily-manipulated communities, corporate America has been steadily stacking the deck against us flesh-and-bone human taxpayers for decades, damaging citizen's financial health and the fabric of our country while doing so.
In 1960, corporate America's share of the federal govt's total income tax revenues was over 23%. By 2017, corporations had finagled to slash that by more than half, to 11.4% (the Socialist, Welfare Deadbeats!!).
2017 Federal tax revenues were $3.3 Trillion. If corporation's share had remained at 23%, they would have contributed an additional $383 Billion in taxes!!
FWIW, the so-called "unaffordable" Medicare-for-all proposals from so-called "radical, left-wing, socialist" Democrats are projected to cost $332 Billion/year. If corporate America continued to pay their fair tax share, we could fund health care for all citizens PLUS have enough left over to fund TANF (so-called "welfare") @ $14 Billion/year PLUS have $37 Billion left over for pocket change for our wholly-owned Congress Critters.
Return to Sane Tax Policies! Make American (Citizens) Great Again!
11
@Miss Anne Thrope
Corporate Capitalism has been such a blessing in my life. Because of large corporations and their wealth, I've been able to get incredible benefits all my life. They paid for my MBA, gave me years of training after my formal education, send me to interesting places all over the world. Offered me the opportunity to serve the poor and at risk by paying me and giving me time off to give back to my community on their dime. I've been given opportunities to speak and write and make a difference in the communities I've lived in. They paid me well and I've been able to donate to many charities who need my financial help. I've been able to send my children to school and help them pay for it without incurring massive dept. I've been given the opportunity to encourage young girls and boys to apply themselves in school to learn as much as they can so they can come join us in the work force and help our customers take charge of their future.
All of this and far more made possible, thanks to large corporations and the wealth they freely share and incentives their employees with to stretch themselves to higher and higher achievements. It's too bad for NYC, Amazon has really impacted my life and made all those small suppliers get a global reach.
Why are you hating on something that has done so much good?
1
@Ephron You have done well, well enough to give back to the community.The picture is not so rosy for residents who get pushed out by gentrification.
1
This just like Brexit misinformation that won the public opinion, this and every other articled speaks to the cost (incentives) and not the benefits.
We compete for corporate headquarters (coming or leaving) and jobs every single day.
You can not just replaced 25,000 jobs and the multiplier effect of many more out of thin air.
No one, including this author has enumerated the benefits - not at all.
Incentives are an investment and there is a return on the investment
Plus this 3 bn is being mischaracterized because the nature of it isn’t lump sum or current value
Go ahead eschew corporates and continue the outer borough economy of restaurants and nail salons and see if that creates enough wealth to reinvest in a deteriorating NYC infrastructure.
It won’t and the non tax payers in the city (which is close to a majority) will suffer as politicians push stupid political points against economic benefits
Voting Republican in NYC from now on.
1
@DMB
amen
1
In light of the news that Amazon will pay no federal taxes for the second year in a row, on $12billion+ in earnings, Queens may have made the right decision, since Amazon's payment of state and local taxes seems notional at best.
Also, Bezos' affair and scandal with AMI cuts both ways. He wants privacy he is unwilling to give fellow citizens, because he may have more to hide....He looks more Trumpian every day. The CIA, and perhaps the Pentagon, is counting on him to safeguard their secrets, but he and Amazon seem sketchier and sketchier, a security risk ?...can we hear reporting on his personal taxes next please.
2
On the same day GE returned $87m to Massachusetts when they decided not to build their new headquarters as promised in Cambridge where they relocated 2 years ago and have only filled less than half of the promised jobs.
4
I think that this outcome is the result of a lack of adults living in NYC. Once announced all the folks involved seemed to think that they had something to contribute to the outcome. There was only one party that would decide and that was Amazon.com
Business is business. It’s not politics, it’s not labor relations, it’s not gender bending, it’s not happy days, its not social planning, it’s just business. $3,000,000,000 in subsidies might have been at the initial rollout sufficient for Amazon to talk, but once they could see all the geniuses and their pet causes coming out of the woodwork, we are so out of here.
I’m sure time will heal this wound to the city’s psyche but they need to deal with the likes of their mayor and his ideas (whatever they are), and their new sense of socialism.
2
Public subsidies by a city or state to corporations are probably always or mostly unnecessary or even wrong. But if deplorable subsidies are for a deal that produces significant net benefits to a city or state, why not take the deal? Why reject a glass of water because it isn't full?
2
Years ago in my local paper somebody sent a letter to the editor complaining that the city had turned down what the writer described as an excellent deal with some company, a deal which would supposedly have transformed a run-down part of town.
This was the first I had heard of it. Obviously the negotiations had been behind closed doors. Perhaps the company thought the general public would oppose it and had insisted on secrecy. The letter itself was obviously sour grapes on the part of the company. And the city was probably wise to turn down the deal.
2
Profits are not made in a vacuum. A part of every dollar of business profit is underwritten by taxpayer-funded municipal infrastructure, energy, law enforcement, federal, state, and local regulations, workforce, education and training, and the consumer market itself—the very system of commerce on which its existence is made possible.
Look no further than the financial bailouts after the 2007 economic crash: when the capitalists couldn't cut it, it was public money that was used to restore faith in the system. So who is wearing the pants in this relationship.
Americans are held hostage by a failsafe corporatocratic strategy: private gain at the public's risk. Always. Their only task is to ensure that the people are made to feel lucky to be fighting over scraps.
7
@Emlyn Addison
And the irony is that this "auction" happened in an era where corporations claim that they owe nothing to their communities but only to their shareholders.
In my city, back in the Depression, the city government said they couldn't afford to pay its schoolteachers and would only give them "scrip", a vague IOU. A local department store agreed to cash the scrips and give the schoolteachers the money they needed, saving the local schools (Of course it meant the teachers became loyal customers of the store as a side-effect). That's a company serving its community. Significantly, that store doesn't exist anymore.
5
The Foreign Corrupt Practices Act prohibits companies or their officers from influencing foreign officials with any personal payments or rewards. Domestically, it should be illegal for any state, county or city to make any payments or reward to a corporation for their business.
11
Got that spin class starting early today.
1
The subsidy auction is a step up from three card monte, but the suckers are still the same.
6
We need a law at the national level making such state and municipal subsidies/preferences an unlawful restraint of trade. Keep in mind that states and municipalities will still compete for corporate locations based upon their general tax policies. With a national law, the general public will be protected from favoritism and the pernicious effects of arbitrary subsidies.
120
As long as there are business, there will be favoritism of one form or another. A 25,000 workforce could be the core of a small town anywhere. Small towns are better for families with children, as reported a couple of days ago in this column. But Amazon may be interested in prestige of the location instead of retaining its workers as they start families.
3
NY has to play favorites because its taxes are so high. Dallas and Austin offered very little in proposals because taxes are much lower. The financial benefits to the area would have been as great as New York, the benefits to taxing authorities much, much less. Think about lowering your taxes and make the reductions much less worthwhile.
@Don
Perhaps you have forgotten the New York motto:
"New York is open for business"
The refundable tax credits, based upon the number of jobs to be had at Amazon H2, were the same as any other employer would receive by moving their business to New York. 25,000 jobs paying an average of $150,000 per year would bring an additional $3.75 billion in salaries per year into New York on Amazon salaries alone. This doesn't include the additional 3 jobs that would be created for each 1 job at Amazon.
No arbitrary subsidies here. Just open for business.
Still trying to understand why Amazon, a company that pays no corporate income tax, has a market capitalization approaching one Trillion dollars, has a CEO with a net worth over $100 billion and a troubled history of paying it's workers a living wage, needs $1 dollar of relief for establishing a headquarters let alone billions of dollars. I would think that Amazon should be able to pay it's own way.
195
@robert Joyner Because the politicians will give it. Unlike stadiums, or the Olympics, these tax abatements were previously approved by Albany - $1.87B - and were to be metered out over 10 years. Given those were already on the books, the actual amount NYC gave was closer to $1B, according to published reports, which is too much, but still a good deal when you consider the far greater return: $27B in local income taxes generated by 25K jobs at $150K a year. That's also not including the ancillary service jobs and increased property values/taxes. For sure it was a quid pro quo, but not as bad as many think. I am sure other cities are happy to take those jobs.
14
@robert Joyner All the hollering about Amazon, they are just the Sears of today. Did anyone scream and protest when Sears opened up stores across America putting lots of local hardware stores out of business? How about when Sears auto shops took business away from gas stations and clothing stores and appliance stores? One day Amazon, the feared juggernaut like some Godzilla will be history too. It has been this way since the dawn of the Industrial Revolution.
6
@Ask, I'm not getting your math. 25k jobs at $150k per annum is $3.75b, which at about a 3.3% local tax rate yields $124m annually. Plus those jobs would not come on line at once - I believe the deal was 25k jobs created over 15 years. I'd rather give tax incentives to small businesses across the city and have them create a more diversified set of jobs across a variety of industries throughout the 5 boroughs.
18
I don't understand what has happened in the US. 50 years ago or so, when a large business wanted to move into your community, they offered a package of incentives to the local municipality, new roads, parks, etc. They knew that plopping their business down in your town would be disruptive, additional traffic, trucks, city services, etc., and they hoped to offset that. We can't continue to be held captive to the vague offers of "jobs" from rich corporations, while they continue to trash the environment in exchange for meager wages and no job security. The most telling thing about the Amazon debacle is how the Amazon executives were upfront when asked about allowing union jobs in to their campus-No way! I think they changed their mind out of fear.
205
Well, considering how the majority of unionized workers perform here in NY: low craftsmanship, negligence etc.. It is not exactly an incentive...
2
@Sebastian revel
Well Sebastion, I'm afraid you're only partly correct, as I think that a poor work ethic affects lots of Americans, not just union workers, and it's a result of how they were raised. Management has the ability to correct poor behavior, and discharge those who won't or don't improve, if need be, but they prefer to complain instead about the"union", which is easier, and transfers the blame. I agree that Union leadership shares some of the blame, but as a whole, I feel most are better off with some collective bargaining available to them. It's undeniable that workers were better off when unions were strong, and plenty of the work performed back then was top notch, second to none.
11
@Fred Rodgers Unions are good, but some , like in Philly are being exposed. Look at Johnny Doc. There are a lot of these guys in LIC
1
Genuinely curious: does anyone know of an instance where these kinds of deals have had long-term, SUSTAINABLE benefits for the host communities?
Where a corporation / sports franchise / etc. has made a real investment in being a good citizen in the community, created jobs that pay a living wage, actually stayed vs. looking for a replacement location when the bloom was off the rose?
3
@Sue
You need look no further than the car manufacturing hub in the southeast right-to-work states:
GM, Ford, Hyundai Kia, BMW, Mercedes, VW
in Tennessee, Alabama, the Carolinas, etc.
@SteveRR okay, what’s the average factory wage there? I question whether the workers themselves would say it’s “livable” especially without job security, but I hope I’m mistaken.
Additionally, those car companies likely remain because of domestic content -yes: regulations- NOT by competition alone with low-wage Mexico, India, et al.
2
The tax subsidies to Amazon are no different than the ones given to professional sports and no less morally bankrupt. It is high time local residents were not forced to subsidize private enterprise.
17
Tax law has so warped our society that common sense doesn’t make any sense. We are being governed by tax scams masquerading as politics. The richest pay the least as a part of their life the poorest pay the most.
The most expensive thing you can do on a personal level is be poor.
10
As someone who grew up in Arlington County, VA, I was amazed to find out it had become a city. When did that happen?
2
The so-called progressives celebrate their victory for the average NYer. Are they celebrating the loss of 25,000 jobs for average NYers and their families? Are they celebrating the loss of increased business activity for small businesses such as restaurants, shops & stores? Are they celebrating the damage that they have inflicted on so many NYers? They are not for the average NYer. Shame on them. Believe me the Dems. in NY will suffer huge losses in the coming elections due to the ideologically driven socialists. AOC and her followers have an agenda that is a cancer growing in our city. Next Republican slogan: 25,000 jobs lost!
9
@Mike-
“Socialism”, as you define it, has nothing to do with it.
The socialism under discussion here is corporate welfare. Companies with political clout pit states, counties and local municipalities against each other — a divide and conquer strategy. They promise new jobs in return for huge welfare subsidies from government. Those subsidies, in turn, distort a host of markets (labor, commercial, industrial and residential property, to name just a few) nationwide while burdening taxpayers with future obligations that often stretch decades into the future.
Those companies cynically play them for fools.
You can neither buy nor borrow yourself to prosperity.
2
Just perhaps this message will get through to every city in the country to stop the arms race in incentives to corporations.
7
Why didnt Amazon move to NYC without any tax breaks, like any other company? Why tax breaks for them and not for any other company?
12
@Alexgri Any other company who was bringing in 25k jobs at an average salary of over 100k would get subsidies. Amazon didn't move to NYC because the Virginia offer looked better after NYC pols decided the deal should be different.
Its no different than an individual deciding to take a lower paying job in a less expensive city.
25,000 people with new jobs who pay taxes. But those 25,000 people use services and make an impact on the places they live. It's wrong to just look at one side of the equation when computing the costs and benefits of enticing a corporation to locate by offering a lot of tax breaks.
10
Government got into the easy-squeezy game of buying corporate jobs rather than have corporations assume the risk of job creation. Why not, corporate leaders argued, the tax money will recycle back to the state? It allowed corporations to lower their risk and improve the bottom line for stockholders, and would have the employees as well as the non-employee taxpayers be the pawns in the tax shuffle.
In the early 1990's before this hustle was perfected, a neighboring state to NY offered money to companies to relocate. When exiting companies threatened to leave, they were given breaks to stay put. Now, municipalities in too many places offer money to employers to move, literally, down the road for tax incentives.
Now we have tax breaks for the rich, tax breaks for job-promising corporations owned by the very rich, tax breaks for companies to move jobs to Mexico, and looming breaking of Social Security and Medicare to pay for largesse to the broken self-destroying system of capitalism by people denouncing socialism....unless it is for themselves and their rich counterparts.
25
The public cynicism that is engendered when the public is asked to pay a wildly profitable company to locate in a new area. In SC it was different. Corporations were enticed with lower wages and no unions, plus ridicules tax benefits. With the giant corporate tax cuts passed by Congress where does the corporate gravy train end?
9
Hopefully, this will be beginning of the end for corporate racketeering in public subsidies. It is absurd for any business to demand public subsidies for private purpose, but it especially galling for public companies with access to the capital markets to get public subsidies.
13
@Mister Ed Yes go back to the old way of doing business with good old fashioned political bribery up in Albany. New York state and New York City do have something of a reputation on political ways to get things done through cost overruns and insider trading. At least these refundable tax credits were above board for all to see. Maybe that is why this couldn't get through the local political hacks. No money for them.
I feel sorry for the majority of NYC residents who supported the deal to bring in Amazon and 25,000 jobs. They could have benefited from the 27 billion dollars of tax revenue this deal would have brought for improvements to infrastructure, etc. The vocal minority has managed to ruin a good deal for everyone else there. These people will continue to complain above problems that could have been solved by this deal.
7
@John
I think everyone agrees that additional jobs are a pro, but many of us don't agree on the literal con. Businesses have been bribing politicians local, state, and fed with "job creator" promises that are flimsy at best and downright damaging at worst. Do the cost benefit analysis on these jobs that are mostly low-paying. Taxpayers and local residents typically end up paying FAR MORE than the alleged benefits. These companies privatize all the profit (to their CEOs and stockholders) while externalizing the cost to society. Two examples: 1. Wal-mart in my suburban neighborhood got millions in tax breaks/subsidies yet we the taxpayer are picking up the cost of the infrastructure improvements required in the beginning with now the crumbling disrepair due to empty coffers, we are paying Medicaid healthcare for their underpaid workers, we are paying for the extra congestion and pollution, and we are paying for the storm runoff and counted/uncounted costs of flooding. 2. Georgia Pacific in my small hometown got subsidies and tax breaks for their few hundred "good jobs" but yet they rack up hundreds of thousands of dollars in unpaid pollution fines, continue to pollute with politicians at all levels turning a blind eye because we all know Main Street America is suffering economically and need every job they can get despite the costs, and people who live in close proximity to the plant continue to die from cancer at much higher rates than the average. Where do we draw the line?
24
@John If Amazon had agreed to allow union labor this would not have happened. It seems foolish to give Amazon money to push wages further down than they already have.
13
For those who think Amazon was desperate to have a Hq in NY your wrong. In fact Amazon has a list of many states and cities who will welcome their Hq and jobs it will bring to the economy there. Unlike the past a Hq in a corporation like Amazon is not locked to any one geographic location. You can bet Mass. and NY are now officially blackballed and off the charts for future expansion of Amazon. You can thank politicians like AOC and Warren. They don't care They have their cushy job. They just told the people of NY that you do not need 25,000 new jobs. They have told you that you do not deserve a shot at those six figure incomes. Look who is cheering at your loss.
7
Sure, Bill.
Have you seen NYC’s housing prices? They keep going up, because people want to live there.
Amazon and you might be under the misapprehension that New York City is desperate for Amazon, but it’s not.
It’s sad the deal didn’t happen, but corporate giveaways, Amazon’s anti-union statements, demand for a helipad and all sorts of other cushy gifts made it not worth it. Amazon will continues to expand its current corporate presence in NY, regardless, because they can’t not have a presence in the largest talent pool in the country. Amazon just won’t have a spiffy new campus. Their loss.
20
It seemed ridiculous for the world's richest man to require enormous subsidies from NYC. That politicians could have negotiated a deal which didn't include Amazon subsidizing subway and other public infrastructure development for the opportunity suggests that the politicos in NY are as braindead as those calling for Brexit (hard or soft) or as tone deaf as Macron.
13
Thankful beyond belief that the People Of NYC won against Amazon. I hope this is a sea change and this outrageous blackmailing and doling out billions to billionaires for handouts called jobs will cease.
22
It’s hard to believe, but New York City did just kill the goose that lays the golden eggs.
7
Amazon thought they could bully NYC. Sorry, not sorry.
20
The biggest welfare recipients in our nation aren’t the old, sick, poor and downtrodden — despite Republicans’ shrill, usually hate-filled claims to the contrary. No, the biggest welfare income streams go to an already wealthy few, to their businesses and to their corporations, why the headwaters of the Amazonian gravy train ending in Seattle are the Hudson and the Potomac.
How did they acquire, or force, such generosity since their boon is our bust, their feast our famine? Why, they bought it from our politicians, functionaries motivated by self-interest only too happy to sell it to them if their price is met — just like they buy everything else. One need only watch Trump’s corrupt regime sell its favors to the highest bidder to perceive just how transactional the process has become. “E Pluribus Unum” ("Out of Many, One”), our nation’s official motto bravely inscribed on its currency, should be changed to something closer to reality, like “Quid Pro Quo”.
Chancellor Otto von Bismarck, no stranger to seamy dealings or the squalid underside of politics, probably said it best when he remarked about the ways-&-means of his Reichstag, itself no island of ethical purity: “one should not watch how laws or sausages are made”.
10
@Steve Singer especially in Chicago and NYC
@dab
Or North Carolina or Wisconsin after Democratic governors were elected and their powers were removed by the republican state houses before the new governors were inaugurated.
You might take a look at how laws are made in other locations, too. ALEC and lobbyists have lots of power in many states, less so in Illinois, CA, OR, WA, and NY state.
As for city ordinances in Chicago and NYC, they may be different than in your city/town/village, but I imagine the process in your locality is not so different - it just has different players. For example, developers seem to get a lot in Chicago, but they do in many other cities and towns, whether a council has a majority of republicans or of democrats, or "non-partisans".
Tech employees in New York City are overpaid and overrated. You can get the same or better skill set for 1/3 the cost in the midwest. Choosing New York was an economic loser for Amazon, even with 3 billion in subsidies. I think Amazon realized it had made an expensive mistake and welcomed the opportunity to bail out.
5
Think about the increased traffic that Amazon has created in their billion dollar business. Our crumbling public roads, bridges and airports used to transport their goods. Think about the human capital employed at Amazon that have been educated in many public schools and universities. And yet, they can enrich shareholders generously with higher stock prices after the generous corporate tax plan. Those stock buy backs paid off! The suckers that buy from them can foot the bill for the necessities in our communities and at the state and federal level too. What a corporate model they have become.
12
the Oakland Raiders are moving to Las Vegas in a year or so. The residents of Alameda county out here are still on the hook for the football park the Raiders got built to entice them to return from Los Angeles. this Amazon failure to understand that NYC and environs protect unions over True Welfare Queens shows a lack study by their management. the times are a changing.
20
I have nothing against Amazon, and Seattle is my favorite place on the Planet. The Husband is an original “ Prime “ member. That said, this is good news. Let Amazon build where they wish, but let them pay for it. Enough corporate welfare, WE can’t afford it. They certainly can.
28
Tax breaks are theft.
8
@Mons
Taxes are theft!
"Everything the State says is a lie, and everything it has it has stolen."
~ Nietzsche: Thus Spoke Zarathustra: A Book for All and None
@SteveRR Zarathustra wasn't intended to be taken literally. Way off.
3
@Rick Schricter
says the guy not doing a thesis on Nietzsche
There is a legendary book about where corporations choose to put their headquarters. It is blank, except for page 300, which says, “Twenty minutes from where the CEO lives.” The one thing a CEO cannot buy is time—the time that it takes to get from home to work, for example.
Jeff Bazos has a house in the District of Columbia; it’s a little more than 20 minutes from Crystal City, Virginia, but you get the point. A modest subsidy would have been quite sufficient to lure him to Virginia.
15
Ok so we saved 3 billion dollars... great!
But 26k jobs and opportunities vanished...and i bet and I'm almost certain that MTA fair hikes will increase in the near future... yeah thanks for saving us the 3 billion.. thanks... Just incredible.
1
@NYC politics $120K per job and they wouldn't even pay union wages. That's the issue really.
3
If a company is healthy why does it wants deals that soir its community standinh? Why draw funds sway from the government’s maintenance of necessary infrastructure ?
If a company isn’t healthy then what do governments get for giving away taxpayer money?
9
It’s ridiculous to have cities and states in the US giving away tax dollars and fighting Balkanizing one another in the mad rush to compete for a company that can well afford its own move. If people truly believe in a free market, they shouldn’t be advocating for corporate welfare.
17
@Dan It is not welfare, it is truly an incentive. I would always pay 3 now to get 27 in 3 years.
2
While you mention the $3 billion tax incentive, you didn't mention the $27 billion the City was estimated to earn over 20 years (according to your editorial page). Wonder how that plays into the equation. What were NY'ers slated to gain?
3
@D that was NEVER going to happen: see Foxconn WI, and the misery of Seattle.
2
“... who contended that a tech giant did not deserve nearly $3 billion in government incentives." Of all companies on the planet, this one, the richest, least deserves such incentives. In fact, it should be paying amounts like this to operate where it operates. It will increase the cost of living where ever it goes in service of enriching itself thereby making life more miserable for the average worker in the area it chooses. Not only that, but Amazon's mission is to basically wipe out traditional business that employ millions of Americans in favor of creating a race of clerks who take orders, pull items from shelves, and ship in an environment they already control at low cost. None of this is good for America, business and the welfare of millions of American workers. Unless your name of course is Bezos...
12
Amazon would have turned Queens into a company town — that's not what Queens wanted to be. If it remains a place filled with lower middle class immigrant families with reasonable rents and mortgages, cheap delicious ethnic food and no corporate campus — does that mean they're failureS? No. It means they've survived. I respect that.
15
Progressive poster child Elizabeth Warren said this:
“You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.
So in effect she’s saying the relationship between business and Government is a partnership. Why then is it unreasonable to have your partner share some of the costs?
6
Matt, When will business and wealthy business owners begin sharing the costs?
Amazon paid $0 federal taxes last year, so I guess not soon.
11
@Matt Williams
Because the Government, the "rest of us" in what you quote, already paid for roads, education, police, and fire.
What is confusing for you?
3
@Matt if you mean Amazon is the partner that should share in the costs, then Yes, that’s what the local communities were saying. Supporting Amazon’s move here did NOT equal support for giving them $3B.
1
New York hands out tax abatements to real estate developments, many of them apartment towers for the rich, who thus are spared the dreary necessity of paying their fair share of taxes. Yet Amazon, which was promising jobs in return for a pretty minor tax discount, gets driven out of town like a thief. Let’s all remember who did this to us.
4
@Andrew Fetherston,
Management at Amazon did this. Amazon had the support of the majority of New Yorkers, two of the state’s most powerful politicians, and 3 billion in incentives . A few people voiced skepticism and they slink away?
1
I don't know how to calculate the mathematic equation, but losing the golden opportunity to diversify and strengthen New York's economic base and 25,000 high paying jobs.... in the name of "against corporate greed" to me is a fool's rationale.
Even communist China knows first wealth creation and job creation, then worrying about equality, because no one wants equality when everybody is equally poor without opportunities.
6
@May MacGregor
Maybe the correct term is "socialist greed". The Social Justice Warrior gets paid in adulation from peers and intoxication from the power to disrupt.
As those on the far right continually support policies against their own best interests, so do those on the far left. Amazon will now take their 25k jobs elsewhere while AOC and her crowd of left wing extremists crow victory.
2
Economists? You mean Paul Krugman? How did nyc get to the level of $3 billion? The city was in a race it chose to run in. It succeeded and then all the naysayers came out of the woodwork. Amazon reacted the only way possible: Why move to a place where you’re not wanted. Over time, the results will answer the question.
4
@Tejano
Amazon was wanted. The majority of New Yorkers were for the deal.
1
@Deedee the majority supported the move, not the $3B deal.
As a Queens resident, and graduate of Long Island City High School having lived in the area for most of my life, I remember LIC as a desolate wasteland of warehouses. It is nothing like its past life and has grown into a vibrant gentrified neighborhood without Amazon's jobs and hype. The subway stations and infrastructure are busting at the seams and do not seem able to handle more developments, high rises and office space. Had the politicians recognized this and tied Amazon's HQ2 into the investment of LIC's infrastructure, they would have a better argument to make to the community.
Conversely, the HQ2 opposition was led by a bunch of imbeciles and political hacks who claimed to stand up for low paying workers and poor people that simply do not exist anymore in LIC (but for the Queensbridge projects).
LIC will survive and keep growing without Amazon. The real problem is the politicians (on all sides) who cannot properly deal with a golden opportunity to bring a giant corporation to a neighborhood and city that will result in hundreds of billions of dollars in spending and tax benefits over a long term (think 20 years). The $3 billion in incentives that the city was providing were a drop in the bucket compared to the long term jobs and revenues that wold be generated.
7
@Peter How do you know that infrastructure wasn't part of the discussion and that Amazon wasn't pressed to help pay for that? I would hope they were, and maybe they weren't. But, it's pretty clear that Amazon couldn't handle even a little bit of criticism and opposition. Queens and NYC in general will continue to attract businesses and workers. We will never know if the return on the gifts promised to Amazon would have resulted in the economic benefits they claimed would result. We do know that an HQ2 really wasn't important to them, otherwise they would have announced plans for elsewhere. They and other tech companies will continue to invest here because of the talent pool and the simple reason that people want to live here.
2
Ahh Jeff We knew you when you were at D.E. Shaw - Libertarian to the end. Thanks for taking your ball and storming off the field in a cry baby huff rather than showing the negotiating skills you once had.
I think what we need to do know and quickly before the next downturn is to initiate projects that will improve STEM and ARTs programs for the city but not just for kids but also for adult learners who are transitioning. One thing we should think about is to develop the city property in LIC into spaces that are affordable for startups. Entrepreneurs don't have garages to work on projects. Finally, we can't wait for large corporations to be our saviors. It never works that way as Foxconn showed Wisconsonians.
5
@St. Thomas LIC is not affordable now, without handouts.
@dab exactly why he suggested developing LIC that way, to which I’d add affordable housing.
1
Do you want to create jobs in NYC? maybe stop jobs from leaving the city. Every second storefront is for rent in certain parts of Manhattan. Rents (residential and retail) are too high and because most of the luxury condos are fancy Swiss bank accounts used to launder money anonymously, no one ever moves into them and the neighborhoods slowly die. Handing out 3 billion to a company that paid ZERO Federal taxes in 2018 is not the way to go.
14
@Jonathan yes empty storefronts are a problem nationwide, and mostly about owners’ greed, certainly here: they could easily fill those stores -and collect rent- if they lowered the price.
And btw: “Private sector jobs in New York City rose over the year by 71,000, or 1.8 percent, to 4,035,300 in December 2018” -Dept of Labor
1
This isn’t the first time corporate greed and star-seeking politicians have come together in an ill-fated marriage (Anyone care to buy a used overpriced NFL stadium?). We should all be wondering in what alternate universe does one of the richest companies in the world deserve government subsidies? Shame on both sides.
Let the market decide where successful businesses should grow. Governments should please save their subsidy dollars for where they are needed most. Google, Facebook and other tech success stories have been adding jobs in NY City without crying poor for handouts.
6
New York is the jewel in the crown. Any company that comes here ought to be grateful––and just like every New Yorker, rich, poor and in between, understand that it must pay for the privilege of living here.
Google seems to get it. They pay up. Market rates. No whining.
Amazon can go fly a kite.
20
Large corporations pitting cities against each other reminds me of what wealthy NFL owners used to do to cities for stadiums. There are studies upon studies that cities got suckered.
It is unfair to existing small businesses when trillion dollar corporations walk away with tax write-offs not available to mom and pop establishments. And then we complain about the loss of small corner stores and how brick and mortar cannot compete with Amazon.
Memo to New York governor and mayor: If you think your taxes are too high to attract businesses like Amazon, work to lower them for everyone, including existing businesses. And don't count on Amazon to pay taxes: it's federal tax obligation for 2018 is zero dollars, on profits of $11 billion.
8
Hurray for ALL OF US!!! Perhaps... hopefully, this is a turning point. Stop these giveaways... to sports teams as well. The Bronx says Good Work Queens!!!
6
The bottom line is that Amazon is not coming, and New Yorkers will now gain nothing from Amazon.
Although in an ideal world we would not have to compete for companies to come to cities, that is not the case right now. Even with the concessions, New York would have reaped billions in benefits and would have taken another step towards becoming a real tech hub instead of being the west coast's little brother.
If you want to argument that generally speaking, corporations should do more for communities, that is one argument.
But to argue that it would have been bad for Amazon to come to New York, even with some tax concessions, is just silly.
6
I wonder if Amazon would have chosen NYC if NYC had initially said, "Come if you want but we're not offering any incentives"?
2
"the defeat of “Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world”).
For Ocasio-Cortez and others: how about also highlighting the defeat of incompetent, borderline corrupt, mayors and governors masquerading as astute economic managers. Amazon was trying to get what it could, in a brutish unproductive way, but that doesn't mean that Cuomo and de Blasio needed to embrace the process with such gusto. Our anger needs to be directed at least as much towards them as towards Amazon.
4
It was reported today Amazon made a eleven billion dollar profit last year and paid zero federal taxes? It also paid no federal taxes for 2017 either. So to all of the non New Yorkers who are crying into their coffee I say you take Amazon in your backyard. Amazon is a sponge that gets crazy tax breaks and treat its warehouse workers like indentured servants. The people crying the most are the speculators who were going to make the Queens neighborhood where Amazon was moving to unaffordable to the current residents. Did the richest company on earth really need a ransom patyement of three billion dollars. Once Amazon landed in that section of Queens gentrification would be right behind it. New York City rents are becoming unaffordable for working people. The 25000 jobs were over a period of ten years. If Amazon had of not tried to soak the city to the tune of three billion dollars they would have had a new home in Queens. ,,,,,,,
7
I want to congratulate the liberal NY politicians on their victory. Bezo is still the richest man in the world. Amazon is still the most valuable company in the world, and NY is without 25,000 high paying jobs. You have served your constituency well!!
4
Amazon didn’t win? It’s Jeff Bezos that didn’t return Deblasio’s and Cuomo’s calls. Anti- Business Progressives should learn from Cuba and Venezuela what happens when you vilify business and capitalism. It’s called poverty and malnutrition.
2
@Jose Garcia yeah alert and aware citizens and communities are way past these tired and out-dated false dichotomies.
Catch up.
Jeffrey Preston Bezos ---aka Amazon--- the world’s wealthiest person, needed your money. Instead he found his Waterloo.
Bezos, who can walk entire city councils like puppies on leashes looking for HQ2 dog food, needs your tax dollars to expand and distribute food stamps to his lower paid workers. Internalised profits, socialised cheap labor costs and expansion costs. This is reverse socialism for the riches. A scam that New York City had the wisdom to let go.
“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.''
The docile, shut up and follow our rules, puppy love story won't happen in NY.
7
@Le Michel The workers are NOT underpaid. And after a while, if a job is not fulfilling, quit!
1
The lack of public support is centered on those that have a sinecure in the form of a stabilized apartment or a public sector job. And the later represent, other than construction (which fully supported Amazon) the only union jobs in what’s been misleadingly tagged a union town.
2
The opposition and this article have proven they don't understand the value of the incentive packages.
More importantly, siting a HQ is already a complex decision. There's really no point in going where people are going to make your life difficult.
1
I don't think this was a revolt against tax breaks and other incentives. That's giving the anti-business left too much credit. It was hatred of the successful for being successful, which is what Marxists do.
2
Governor Cuomo upbraids the State Senate for nominating State Senator Michael Gianaris to the Public Authorities Control Board, giving him a veto over the Amazon project. All he needed to do about that was to reject the nomination of anyone so committed against the project from the outset. "The State Senate should be held accountable," he says belatedly. Spare us, Governor.
@John P. MacKenzi
Cuomo did reject Gianaris’ nomination.
Gianaris publicity stated he wasn’t going to veto the Amazon project if he would have been on the board.
2
In cities across America, handouts to corporations are commonplace and take many different forms. We visit the Town of Oro Valley AZ often and their town councils are known for increasing housing density. Land parcels originally zoned for 1 home per acre are rezoned by "agreeable town councils" for 5 homes per acre thereby reducing the cost of the land for the developer & increasing its profits.
Conspicuously absent is an "impact fee" that offsets the increased cost 5 units will have on roads, schools, police, fire and most importantly, water.
This "giveaway" process caused Phoenix AZ to become a 60 mile, sprawling, heat island. Night time temps now exceed 95 degrees whereas they were once 60 degrees.
All it takes to increase developer profits are campaign contributions for a town council that will vote for the land use increase.
Ocasio may have thwarted Bezos, but until America gets meaningful campaign finance reform, looting the public trough will repeat itself over and over again.
11
Politicians of all stripes and labels beware! Read the letters below. The people are watching and they are fed up with such"arrangements" cooked up and put in place without their consent.
This happened on a much smaller scale here several years ago in San Francisco. Our beloved Supervisors were getting ready to trade construction height limits along the bay in a sweetheart deal for low cost housing for their "constituents". Well, it made it to the ballot and their real constituents, including me, voted it down.
4
This is an excellent article. Two follow up points:
1. Millions of dollars were spent by states and cities across the country trying to lure Amazon - in places now known that Amazon never intended to go. The money those municipalities spent for consultants, etc. on this ridiculous exercise were local tax payer dollars and could have been put to much better use.
2. I find it interesting that (at least for right now) Amazon doesn’t appear to be reopening the competition or talking about its second choice on the list after NYC. This seems to indicate they always wanted to be in NYC and were just using the bidding process to extract more money from our city/state by feigning interest elsewhere.
6
These deals of subsidies for corporations to come to these towns and cities are like the bid for the Olympics. In principle they seem an amazing business opportunity and reinvestment in communities. But as we have seen in the last 10 years, hosting the Olympics is a loss or at the very minimum a wash in the long term, reason why the public has pushed back so hard in the last few bids not to host them. So i read the intensity of the comments and i can only say that the very same day Amazon decided it was to hard for them to answer legitimate questions because people wanted more accountability, GE announced they would not continue with their expansion in Boston after a similar series of subsidies were offered to move their HQ from Connecticut to Boston less than 4 years ago. GE is no Amazon today but it used to be one of the Hallmark companies and similarly our governor and mayor of Boston, fell for it in closed doors. No infrastructure, transportation investment has come this way from such promises. Like the Olympics, reality hit the ground.
11
We can't compare Amazon to the Olympics. The Olympics are a few weeks one time only. Of course the benefits are negligible. As you know, it takes years of economic activity to bring profits. And once the Olympics are gone, the activity fizzles out. Amazon might very well have gotten a great deal. But so did the region when we consider the long-term economic advantages. Consequently, the comparison isn't valid.
2
I don't understand all the complaining about Amazon. NYC decided to offer them the tax breaks - which they only get of they create the promised jobs - as part of their competitive offer to get Amazon to come there.. NYC could have offered them to come to the city but without the breaks. That's a choice the the city made, and has now reneged upon. So Amazon decides that they no longer have the deal they agreed to, so they'll do something else. The city now owns that lost opportunity, as they previously owned the offer they made.
You may not like Amazon, but any reasonable business would have had the same reaction.
5
@Arch Macy
The city didn’t reneg on the subsidies . You are misinformed .
2
It's not the $3B or 25,000 jobs. Amazon has enough riches to renovate the L line 3 times over. Did they even offer to rehab a subway station?
13
Amazon is large enough and wealthy enough that it could step back and ask:
Where can the company locate that will have great impact on rebuilding a community?
Detroit is one obvious possibility: a city making a real “comeback” and with one of the best airports in the nation.
Ann Arbor and the University of Michigan are very nearby and produce many young professionals with the computer programming skills Amazon desires.
23
@Jean yes of course, Amazon proved it has zero interest in helping any community whatsoever, even with $3B incentives(!) and that it’s “search” was always a shameless scam to extract the max from locations it already preferred.
1
@DugEGSurprise, surprise! The sole objective of business is not "helping any community"; it is to make money. Nobody should be disappointed when business acts in this rational manner.
The real problem is housing affordability. 3bn in tax breaks would pale in comparison to how much they would add to the local economy. Yes people would be priced out but sometimes you have to move when things get to expensive. This isn't happening overnight, people have time to adjust. Surely a loss for NYC.
2
It would take at least 13 years and likely longer for the state to recoup it's $3b incentive in income taxes. Probably less if you consider sales tax. Either way, that's a decade of Amazon living free in the state. Based on it's behavior on Seattle it won't contribute anything to the community except those it employs and everyone one else can just suffer gentrification.
I don't think any company has a duty to pick a place that needs investment and build it up. The states should be doing that with tax revenue. But companies should be good neighbors and not make things worse for those living nearby.
14
@Jessica
"Based on it's behavior on Seattle it won't contribute anything ..." perhaps you should research Jeff Bezos $2 billion charity commitment, or his parents foundation, or the Amazon Smile program, the Farestart program and the transformation of the South Lake Union area of Seattle .
So what went wrong with this deal? Here are some faux pas: 1) That Cuomo and DeBlasio, 2 men who never came together to work on solving the city's problems, sprung the deal on the public which had been kept unaware, stoked doubts based merely on the secretive way it was rolled out. 2) That the tax incentives were already accounted for in previous budget agreements misses the point; people do NOT accept the idea of giving tax breaks to the world's richest company that condescends to grace us with it's presence. They should pay US to come here, not visa versa, and those $3 billion should be sunk into the city's needs directly, not extended in tax breaks to lure a company that would come anyway. 3) Paying for a heliport for the world's richest man? Really? 4) No question that NYC can live easily without those jobs and it's undeniable that our infrastructure is stressed to the max and therefore the idea of adding to it did not reap praise from those who use the subway, worry about increased rents and so forth.
A final observation is that, as any REAL New Yorker knows, Amazon and any other big conglomerate should pay US to have the distinction of establishing a base here, not visa versa. Our talent pool, not to mention our cultural and leisure offerings is why they wanted to come. If they want to come, they should lay out the money to do so, not depend on our tax dollars as a "thank you" to them. The GOP tax revisions, hitting returns, has already rewarded them enough. Clear now?
36
Well said ManhattanWilliam.
The contest Amazon setup was a brilliant stroke on their part, in a way. Nobody wants to lose a contest and so the politicians fell all over themselves to win. And, of course, Amazon got all sorts of valuable data from cities across the country.
But because it was all secret, the big reveal
got loads of press and suddenly people were saying “What? We paid how much to win? Why?”
Amazon’s fundamental mistake here was assuming that the desperate politicians offering whatever they could to lure Amazon accurately reflected how citizens felt about the process.
When a company offers to move in, most people don’t think “Gosh, what can we do for them,” they think “What will this company do for us?”
But Amazon thought this process was all about making Amazon happy with helipads and other such nonsense, and forgot that there are actual people, with opinions, who also have a say. And Amazon forgot to give them any good reason to support the deal.
8
They should have chosen Newark, NJ. LIC has faced 2 decades of gentrification, and there's enough businesses there. No need for tax breaks to add even more pressure against working and lower middle class people.
13
@Angel I agree they should have chosen Newark. But I think there were some "lifestyle" considerations that concerned the poorly informed Amazon people responsible for this decisions.
2
@Angel or Cleveland, Detroit, Camden, or countless deserving locations that would be greatly assisted. Amazon could have gained devoted & skilled workers, public good will, and continue its anti-competitive profiteering. Instead, Bezos flatly blew it, proved his “search” was always and only a shakedown, and that he cares nothing for workers and communities.
Amazon paid less than ZERO federal taxes last year - got a refund - on multibillion dollar profits. People say, well NYC isn’t paying those 3 billions to Amazon; by the same logic, reducing taxes on the rich isn’t ‘giving them money’ ... In fact, it is if you are no longer collecting what you should be (why else are taxpayers so happy to get refunds)
Amazon wouldn’t necessarily be unwelcome (even with congestion and pricing residents out) if it wasn’t trying for those tax breaks - then it could be a genuine win-win for everyone. Unlike small or innovative businesses, it absolutely does NOT need tax breaks.
Perhaps most of all, I find it shocking how many people support this type of business-as-usual, the very type of thinking that has led all of us to the extreme wealth disparity of our times, where the many fight over the few scraps of the richest few.
45
@lm
I don't agree. I think LIC residents fear higher rents. I think local politicians fear the migration of their voter base(s). I think the anger about the tax break is a smokescreen or red herring. I think it's a disingenuous complaint. I think the protesters are smart enough to know that the city isn't giving money to Amazon. It's a convenient reason that makes those opposed to the deal seem noble and principled, when, in truth, they just don't want their rents to go up. In NYC, rent is politics. In NYC, every discussion is really about rent. Whom you date is about rent. Whether you seek a divorce is about rent. In NYC, the issue of rent rules all.
4
@lm
The extreme wealth disparity was greater in the 14th C. people now have greater upward mobility than any other time in history. Maybe the 50's were better, but that's because so many workers died in WW2. Nothing promotes national prosperity like war. What's surprising is how prosperous America has been despite not having a major war in the past 50 years.
@Anti-Marx
Sociologists say upward mobility was high in the late 20th century but has slowed in the last couple of decades, as the computer revolution created a gap between those with technological skills and those without. This coincided with an ideological change from Austria, where successful Americans were told that they owed nothing to their fellow Americans but could fight to protect their assets. Ayn Rand is the hero now.
As for the 14th century, one history book argued that in that culture the important thing was not wealth, but the individual's hope for religious salvation. Since everyone was considered equal in the sight of God, midieval times could actually be considered more egalitarian than ours, where people who lose in the rat race are considered just that, losers.
As long as so many communities are desperate to gamble these economic give-aways MIGHT be offset by imagined revenues, and companies have the resources to wave the possibility of them (without being required to deliver) it's never going away.
With so much lobbying power in the halls of government, who would ever write legislation to reign in this type of corporate handouts?
11
Well-said.
You speak my mind.
2
Geographers and economists can tell you why cities grow. In the Amazon case, so can the working adults who would have been taking these six figure jobs. Good schools. Commuter infrastructure. Grocery stores. Leisure activities. Low crime. Northern Virginia has all that in spades and knew it. It didn't need to offer a gazillion dollars in bribes. Long Island City doesn't. It did.
The challenge for the people of LIC now is to push for the money that would have been spent on bribing Amazon to be spent on exactly those things: schools, infrastructure etc. Then, when the next opportunity rolls around, they have an organic way to win, no bribes needed.
63
No money was going to be spent on Amazon. They were getting a tax abatement. There is no 3 billion that now can be spent on other things.
16
@P.P. Porridge
No $3 billion was to be from future taxes. If employment and business community developed around Amazon could have produced $20 billion billion revenues . Then the $3billion would have come into picture and not in one go either. That is a reduction in future tax revenues. $3 billion does not exist, it is not in municipal bank account to spend. In other words, it is not in the budget to spend. So forget spending it elsewhere instead.
6
@LCG I'm really glad the nys government is giving me a huge tax break on my future taxes owed. Pfhew that's a heck of a relief...oh, you mean that was only for Amazon...? Hmmm...
8
Amazon needed New York as much as New York needed Amazon. Amazon needs the city because the young talents they want to attract to the company want to live in thriving and stimulating urban environments, and nothing beats New York on that (see Google's recent plans for investments in NY for another instance of that). New York needs Amazon because it has to rebuild much of its infrastructure and that will be costly. I guess it was a marriage made in heaven, but the tax breaks ruined it all. I guess Amazon should have just accepted that contributing more to the community was better for its profit line than a mere $3bn in tax breaks. Without headquarters in New York much less young bright people will join the company.
14
Opposition based on the subsidy is a smoke screen. Scratch the surface and it becomes apparent that it was really based on fear of gentrification. The nay sayers are lower skilled, rent rather than own and feel threatened by any show of progress.
3
@GC: I'm not sure that that is true. But, if it is, can you blame them? It's not like there was much of an attempt in this deal to keep that area of the city from getting more expensive to live in or to give them an opportunity to improve their skills. Don't YOU vote for what you think will benefit yourself, whether narrowly or broadly?
3
Amazon was not going to get cash from New York it was going to pay less taxes then they would have otherwise. The subsidies were too generous and there was not enough enforcement in the initial deal to the extent that we know about it. But those are things that could be negotiated. Killing the deal altogether hurts economic growth, job creation, and tax revenue in New York. Where do people think the money is going to come from to fix up the subways?
9
@Michael Richards
Where is the money to fix the subways to come from? Well, certainly not from the $3 Billion Amazon would not have to pay in the future, that's for sure.
5
@Michael Richards I may be mistaken, but I thought Amazon was getting something like $500 million to build the HQ.
1
Amazon’s impending arrival must surely have given pause to anyone who routinely commutes via the various MTA bottlenecks in Long Island City.
The crisis in public transportation is what fuels this NIMBY constituency.
If you want to know how much an undercapitalized subway system is costing our region, look no further than this broken deal.
35
@New Yorker What a delusion that the 3 billion dollars NOT being paid would go into mass transit. That`s magic math. Trust me, all of whatever Amazon paid in tax or didn't pay was going nowhere to benefit the NYC tax payer. It was going into the coffers of the crooked politicians who cooked up this deal. Good for new yorkers to speak up and quash the deal based on the real harm it would do to affordable life in NYC.
3
Remember a few years ago when Boston walked away from the Olympics and thousands of alleged construction and other jobs because the people (not the pols and corporate suits) decided that that the promised benefits were not worth the estimated costs (and disruptions)? The same fundamental calculus is at work here. Maybe there would be 25,000 jobs … or maybe there would be 10,000 jobs or less, who knows? But what is predictable is the disruption of transportation, real estate and housing, neighborhood institutions, and a variety of other costs – ALL of which would be borne by the taxpayers who had ZERO input into the decision to disrupt their lives AND give away 3 billion of their tax dollars. Corporations are not social service agencies or nonprofit NGO’s, they are not “do gooders,” they are instead voracious seekers of money and power and the people of Queens should consider themselves fortunate to have dodged this bullet.
97
@Jason Shapiro
But the Olympics is a short-lived event. It might be a boon for a smaller town, but Boston is a major city. Amazon was offering permanent jobs. The Olympics offers temporary jobs.
3
@Anti-Marx - While Amazon offers jobs to temporaries.
5
@Anti-Marx which does not negate JS’ points.
1
I understand the appeal of New York City to companies and to people. It appealed to me, also, which is why I moved here when I was in my 20s, without the benefit of any tax break. All New York City residents pay taxes daily to live here: income taxes, property tax as applicable, and sales taxes on everyday transactions. Why should a corporation, particularly one of the most highly capitalized companies in the world, enjoy an exception to that? Yes, its employees will pay taxes, but why can't the company, itself, pay taxes? A better "break" for a company who wants to move here would be a commitment by the public and politicians to free tuition at all city and state universities. This would enhance the value of the city or state's workforce, to the benefit of all employers.
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@Ellen Freilich
Tuition at SUNY colleges and universities now is free for students whose families make less than $125,000.
3
A corporation is an investment and a city like New York is a great asset to a corporate culture. Over time, the HQ in Long Island City would have paid off for both parties. It turns out that regular people, like corporations, are short-sighted.
6
@William Taylor
You mean politicians are short sighted..hey I'm not a big fan of cuomo or de Blasio but they saw the potential.. the long-term potential.
I just wished the other local politicians had seen this.
As a businessman I had to assume Amazon went into these meetings and asked..."who needs who more..?
2
The DC-area agreement allows for up to around 40,000 jobs. That's almost as many as the DC and NY parts combined. Amazon must be especially happy about that now.
5
Let this be just the start. It is time to stop pandering to the rich and powerful, be they corporations or individuals. New York is a great city, with or without Amazon. It is unconscionable, and bad public policy, that Amazon was able to manipulate the tax laws to pay no taxes last year, while many of their employees do not make a living wage. If Amazon or any company wants to be in New York, let them be here under our rules, not expect us to accept their rules.
104
@EdBx - When we evolve to the point where billionaire NFL owners repeatedly get stuffed on their new-stadium tax extortions, the war will be won. Power to the People!
3
The question I'm left with at the end of this article is why corporations don't seem to base their location decisions on tax incentives? It makes a compelling argument that they don't but I'm wondering why?
7
That's easy. What a company needs, especially a tech company, is a skilled workforce. I am a skilled worker and what I'm looking for isn't just a paycheck. I'm looking for a safe community, good schools for my children, entertainment that isn't multiple hours drive, and an easy commute.
It's possible that Amazon could plonk itself down in rural Kansas where land is cheap, taxes low, and incentives from the government cover construction costs of the new facility. But how many skilled workers want to live in a failed state with schools so bad they're children won't have the same opportunities that they have?
9
Subsidies are less important to companies than other factors – – strong labor markets for the type of workers they want, related services ranging from law to advertising to design, public amenities, strong transportation links. And, believe it or not, research shows that proximity to the CEOs home sometimes matters hot HQ location decision (this is why I was always betting on DC for the Amazon deal—Bezos has a house there and owns the Washington Post.) But cities are afraid of “unilaterally disarming” and being seen by voters as not caring about jobs.
3
@Magicwalnuts - (R)egressives slander hard-pressed citizens, always accusing them of wanting "free stuff". Meanwhile, corporations blatantly finagle to extort free stuff, but since they don't really need it anyway (it's just icing for their executive-bonus cakes), they're willing say "stuff your free stuff" if the slice isn't big enough. They just wander off looking for a bigger slice of someone else's cake.
2
In fact, if the Amazon deal had gone through, protesters could have targeted the company right here in New York. Rep. Ocasio-Cortez might have had a direct line to them, right in her backyard. That might have been a real way to effect change. Once the HQ was built, it's not like they could just up and move it.
Instead she publicly insulted and disparaged the company and scared them away.
Meanwhile, New York City's tax-funded programs like preschools and the subway will have to come up with other sources of funding to make up for the lost tax revenues from Amazon.
28
@Jeff Creek
True to a certain extent. I thought about let them build it and then we will come to our senses. But Mr. Bezos has a red line temper. He would pull out. He hates anything that would impede his direction for growth. Unions would do that. Secondly, we 'd be stuck with not fulfilling our end of the deal.
Luckily we didn't sell them city property.
26
@Jeff Creek
Do you really think that AOC, a freshman congresswoman was the one who stopped Jeff Bezos? Do you think that if Jeff Bezos was the guy driving the tank in Tiananmen Square, he wouldn't have just flattened that lone protester? I applaud her efforts, but Amazon is a heartless machine that is only interested in the bottom line and run by a robot who discounts the humanity of everyone else except himself. Even among billionaires, he is the neutron star of tightwads, giving almost nothing to charity. Amazon crunched the numbers and determined it wasn't worth it. They were wrong to bolt and NY was wrong to not demand so much more for their presence. To blame AOC is just a way to get in your digs at socialism and nothing else.
12
@Jeff Creek NY Subways proud of being among, if not the very worst in the world.
3
Economists, politicians, and the public have all been wrong before. So it will be interesting to see how this decision plays out. Five or six years from now, after Amazon sets up shop in Texas, North Carolina, or some other state, New Yorkers can decide whether they made a smart decision or a short-sighted blunder.
10
@DLS
We don’t need five or six years. Heck we don’t even need 5 seconds. NYC mucked up badly.
1
@DLS
Amazon setting up shop in Texas, North Carolina, or some other state won't affect NYC. Amazon was trying to set up one "headquarters" of many. And they still have a major presence in NYC.
4
@DLS
NY made what blunder? It was Amazon that decided to leave, NY wanted them, even offered them subsidies .
1
Amazon's inflexible petulance demonstrates just what kind of good "neighbor" they would have been had they stayed. Dismissive of any criticism, they would have devoted their resources to stocking the City Council and Legislature with friendly faces, rather than addressing any legitimate concerns. Any difference between Bezos governing by fiat and Trump's mercurial swings? You really cannot bargain in good faith with someone who thinks they're king.
129
You offer to sell your car for $10000. 30 people tell you they want it. You pick one. That person shows up at your house and says “wow nice house! you don’t need $10000, I’ll give you $7000”. I’m calling you a liar if you say you’d take the $7000.
1
@Tom
A better analogy is if your spouse co-owned the car, you and the buyer cooperated in discussing the terms behind her back, presented the deal to her as a fait accompli and then he stormed off in a huff when she objected to the process and wanted to discuss the terms.
6
Stormed off in a huff or simply saying “No thanks, I will find another car. I do not need the aggravation.”
1
Amazon to Long Island City: Drop Dead
Let me get this straight: New York just passed up a huge economic stimulant because a few politicians believe this will be the beginning of "reforming economic development?" Funny, a vast majority of deals like this have been wildly successful.
I'm sure the Seattle City Council had nothing to do with this decision, after sharing its "horror stories" of hosting Amazon for three decades.
Amazon is nothing like Foxconn--false narrative. So now Long Island City prefers to let its infrastructure, schools and mass transit rot instead of making an investment in one of history's most successful companies. This will be a turning point in the slow decay of NYC and smaller cities will reap the benefit.
15
@Bridges
If you think NYC is in "slow decay," don't you think using tax money for infrastructure is a better investment than a relative handful of jobs?
6
@Bridges
You are betting on Amazon over NYC?
Twenty years ago Amazon did not exist and it may not exist twenty years hence. One hundred years ago NYC was the greatest city on the planet and for my money it still is. How many amazon types have come and gone in the past century? I'm betting NYC will still be a great city when few people will know the name Bezos
8
@Bridges
Maybe LIC doesn't want to make people homeless like Seattle has due to skyrocketing real estate due to Amazon.
8
Studies have shown that a few meals at a conference, or even a couple of token gifts, can persuade an MD to prescribe more of a particular pharmaceutical company's product. So I can't help but wonder what the politicians who originally negotiated the NYC deal in private were expecting. Campaign contributions perhaps? an expensive "fact-finding" junket?
Guess we plebeians will never be allowed to know.
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@Martha Shelley
Don't forget that the most important qualification for a pharma rep is to be beautiful/handsome, the better to flatter the marks. It's like an internship for being a Hollywood glamour extra.
5
@Martha Shelley, As long as there are businesses, there will be favoritism of one form or another. A 25,000 workforce could be the core of a small town anywhere. Small towns are better for families with children, as reported a couple of days ago in this column. But Amazon may be interested in prestige of the location instead of retaining its workers as they start families.