From Fast Company:
Earlier this month New York Governor Andrew Cuomo joked (?) that he would change his name to “Amazon Cuomo, if that’s what it takes” to get the ecommerce giant to set up shop in the Empire State. Cuomo got his wish, but instead of merely debasing himself and his name, he embarrassed the state and city of New York.
Today Amazon announced it was opening two new headquarters in Long Island City, Queens, and Arlington, Virginia–along with a third, smaller one in Nashville. Amazon loves to brag about the power it has over everything around it, so we delved into the details. It turns out these cities are paying a pretty penny for the privilege of Amazon serfdom.
Let’s look at the numbers:
- New York is giving Amazon $1.525 billion in “performance-based direct incentives” for creating 25,000 new jobs. This includes a $325 million cash grant, along with $48,000 for each of the 25,000 jobs.
- Arlington is giving the company a total of $573 million. This includes $22,000 for each of the 25,000 jobs Amazon will supposedly make, along with another $23 million cash grant. (A disturbing footnote that every journalist should note is that Virginia also agreed to give Amazon advanced warning about any FOIA requests for information.)
- Nashville is giving the ecommerce giant $102 million in total, which includes cash grants ranging from $4,500 to $13,000 for each of the 5,000 new jobs it creates.
Essentially, each area is paying a premium for the supposed economic boost that Amazon will provide. And New York is by far paying the most.
New York’s infrastructure has been pressed to its limits for years. The subways are in a constant state of disrepair, rents have been skyrocketing, and affordable housing has been in a state of crisis. Many of New York’s more than 8.6 million residents are looking toward city and state leaders to address the systemic problems plaguing the city.
A company like Amazon could present an opportunity to collect more taxes to fix the crumbling foundation. Instead, Governor Cuomo and Mayor Bill de Blasio made a deal with Jeff Bezos that cost the city more than twice what the other supposed headquarters are paying.
. . . .
And at what cost? Will Amazon’s presence help fix the rot? On the contrary, crowding into an already-densely packed area will lead to more–and potentially worse–problems down the line. Long Island City’s Court Square subway stop saw about 23,672 average weekday riders in 2017. That will more than double with HQ2. Jeff Bezos, however, will probably not be one of them, as the city has agreed to give the company access to a helipad.
Soon we’ll begin to see the reality of a company planting itself in a neighborhood where the rent was already rising, smack dab next to the country’s largest affordable housing project. And while this happens, politicians like Cuomo will undoubtedly tout this new chapter as good development in the annals of New York–one that he spearheaded. Expect to hear Amazon’s name invoked along with rumors of a presidential run.
Link to the rest at Fast Company
And a member of Congress from New York also weighed in:
New York’s newly minted Congresswoman-elect Alexandria Ocasio-Cortez, who took to Twitter last night to point out that tax breaks will funnel much-needed money away from the city’s crumbling infrastructure.
Starting in January, Ocasio-Cortez will represent New York’s 14th congressional district, which includes parts of Queens.
She noted that the community’s response so far has been outrage. “Amazon is a billion-dollar company,” she wrote. “The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here.”
Link to the rest at Fast Company
Their main problem is a problem all large tech firms are having. It’s not possible to locate all of the companies employees in one city. Trying to do so distorts the local economy such that people can’t afford to live there. We see this in all over silly valley. Even the crappiest house costs a million dollars – if you can even find one for sale. This makes it VERY difficult to attract and retain talent. Notice how I didn’t say “workers.” These businesses need people who are experienced and talented at fairly esoteric jobs – they’re not interchangeable widgets. If you get to a point where you can’t onboard these people, you need to do something drastic – like open a second and third headquarter somewhere else.
Doesn’t surprise me at all that AMZN wants to locate close to the Feds and Wall Street. I live in the Pacific Northwest and I know more Google employees in NYC than in Seattle, and they are all fixing the cracks in Fed installations. I’m expecting yet another AMZN HQ in Lausanne or Zurich.
Apparently Amazon’s stock plunged if it’s a “billion” dollar company.
AOC is shockingly ignorant on almost every topic she opens her mouth about.
did you consider the possibility that tweet was a typo
I read his comment as two independent factual statements.
So your counter is that he’s an even bigger dumbass than if he didn’t realize that tweet was probably a typo?
Overlooking the possibility this was a typo is a mistake we could all make. Just calling her names with nothing to back it up is Fox News commentator-level idiocy.
Me, I was willing to give him the benefit of the doubt. I guess you don’t.
Nope.
I recognize snark when I see it.
Just calling her names with nothing to back it up is Fox News commentator-level idiocy.
Nonsense. That’s my level of idiocy.
Oddly Nate, your opinion of me doesn’t change my mind.
Though I would question your need to attack me because I pointed out that AOC often makes foolish statements and this is another one.
The “billion dollar” gaffe is by no means indicative of anything more than a typo in all likelihood, I would concede.
That makes her human and me, it seems, a “dumbass”
consider me burned.
FYI THAT was snark
And the highlight of this (IMHO) is still Alexandria Ocasio-Cortez’s comments (because I needed a laugh). She really, really needs to get a refund from Boston University for that economics degree they gave her. https://nypost.com/2018/11/13/ocasio-cortez-finds-amazons-hq2-in-nyc-extremely-concerning/
Maybe she’s “concerned” the 25,000 jobs are going to Queens instead of the Bronx.
Did a quickie check and those 25,000 employees will be coughing up $150M a year in state income tax and $90M in city income tax plus a whole bunch more in sales tax. Figure at least a quarter billion a year.
We also haven’t seen what taxes Amazon will be paying. The various articles concentrate on the breaks, not the payments. Anyone know?
Seems pretty sensible to me:
“Displacement is not community development. Investing in luxury condos is not the same thing as investing in people and families. Shuffling working class people out of a community does not improve their quality of life.”
Thing is, de Blasio et. al. know that if they want to keep New York functioning as it is, then they have to keep it as one of the centers of global commerce and finance. Bringing in Amazon is one way for them to actually do that, something I don’t think Ocasio-Cortez gets.
All the stuff she wants requires cash, and lots of it, and I suspect that the City of New York will come out ahead on this deal cash-wise.
High=paying tech Jobs were going to come to NYC anyway (the same is true for NOVA). There was no need to bribe Amazon to bring the jobs there.
They were going somewhere, that’s fir sure.
This way Cuomo gets to brag he’s business-friendly when he goes to Iowa next week.
Were the 25,000 high-paying Amazon high-tech jobs coming to NYC anyway? There surely are other high-paying high tech jobs coming to NY. But the 25,000 Amazon jobs are an incremental addition to all those others.
And those other high-paying high-tech jobs? Are they the ones investing in people and families?
My suspicion is that Amazon knew all along that they’d have to use two smaller hubs. Because in reality, these are HUBS not HQs. But headlines for Amazon creating a couple hubs wouldn’t have brought nearly the amount of excitement and incentives quite like a SECOND HEADQUARTERS(!!!).
And now Amazon knows what type of ‘deals’ it might be able to make in all those other areas. 😉
Exactly what I was thinking.