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Amazon Pulls Out of Planned New York City Campus (nytimes.com)

Posted by msmash on from the tussle-continues dept.

As expected, Amazon said on Thursday that it was canceling plans to build a corporate campus in New York City [The link may be paywalled; alternative source]. From a report: The company had planned to build a sprawling complex in Long Island City, Queens, in exchange for nearly $3 billion in state and city incentives. But the deal had run into fierce opposition from local lawmakers who criticized providing subsidies to one of the world's richest companies. Amazon said the deal would have created more than 25,000 jobs. Amazon's NYC educational investments will continue.
Amazon's statement: "After much thought and deliberation, we've decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.

We are disappointed to have reached this conclusion -- we love New York, its incomparable dynamism, people, and culture -- and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams."

55 of 365 comments (clear)

  1. Good government management by Futurepower(R) · · Score: 4, Insightful

    Good!!! The governments should not provide subsidies. There should be a law against that.

    1. Re:Good government management by atrex · · Score: 5, Insightful

      Or, NYC could take that $3 Billion dollars and hire 25,000 workers with $50K annual salaries for two years to rebuild and modernize the city's subway system which will provide much greater and longer term economic benefit to the city than an Amazon office building.

    2. Re:Good government management by ranton · · Score: 2, Insightful

      And now some other city will give them what they want - and Long Island will be out of luck on this one.

      Out of luck? They were about to spend $120,000 per "new" job created, so it is far from guaranteed Long Island would have benefited. Long Island has a 3.8% unemployment rate, so I doubt it is hurting for new jobs. The New York City area is probably not hurting for businesses to locate there. Spending that $3 billion on more affordable housing would probably do far more good in attracting businesses by giving them more access to employees.

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      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    3. Re: Good government management by Anonymous Coward · · Score: 2, Insightful

      It wasn't subsidies. There's an important distinction between being paid, and incentives that mean you pay less.

      One puts the onus of failure on the tax payer, while the other still requires the business to be successful.

      In their rush to be virtuous and socialist, New York forgot that we are, and will always be, a capitalist nation. Tens of thousands of New Yorkers lost a golden opportunity to make billions of dollars for themselves and their community.

      This is not something to celebrate.

    4. Re:Good government management by ceoyoyo · · Score: 2

      And they'd still have half a billion dollars left over.

    5. Re:Good government management by sdinfoserv · · Score: 5, Insightful

      Try and live in NYC on $50K.

    6. Re:Good government management by AmiMoJo · · Score: 5, Insightful

      Problem is it's not $3bn in cash they have handing over, it's $3bn in tax they are not going to collect.

      You can't pay people with tax you would have collected if Amazon had come to town.

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    7. Re:Good government management by Anonymous Coward · · Score: 4, Insightful

      They were never spending $3B. They were refunding $3B worth of the taxes Amazon would have paid. Too many stupid people commenting on something they don't understand.

    8. Re: Good government management by ShanghaiBill · · Score: 4, Insightful

      There's an important distinction between being paid, and incentives that mean you pay less.

      There is indeed. But both are wrong. There should be equality before the law, even for businesses. One business should not be taxed to fund tax breaks for another "more worthy" business.

      In their rush to be virtuous and socialist,

      Only some deal opponents were socialists like AOC, who objected to the handouts to a rich company, although she doesn't object to handouts in principle. But many more objectors are free market capitalists, who don't think the government should be "picking winners". It was an alliance of left and right, standing together to oppose corporate welfare.

      This is not something to celebrate.

      Yes it is. Hopefully other locales will learn a lesson from this, and these corrupt handouts can stop.

    9. Re:Good government management by Anonymous Coward · · Score: 4, Insightful

      Keep in mind most of those amazon jobs would have been for a LOT LESS than $50k. They too would not have been able to live in nyc.

    10. Re:Good government management by Deathlizard · · Score: 3, Insightful

      That incentive was savings on tax revenue Amazon would have paid if they built in the area.

      Since Amazon isn't coming to the area, not only are they out any tax revenue that Amazon would have generated, but any potential Tax revenue generated by the hired employees.

      Unless they find another 3 billion dollar revenue generator, they get nothing but what the current property generates. probably a few million tops.

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    11. Re:Good government management by Anonymous Coward · · Score: 5, Informative

      The median salary in NYC is $50,711.

    12. Re: Good government management by jythie · · Score: 4, Interesting

      For the same billions, they could probably attract hundreds of smaller companies that would have far more impact on the city.

    13. Re: Good government management by Anonymous Coward · · Score: 5, Informative

      Actually NYC cleaned itself up in spite of efforts by both political parties. The decline in violence and poverty mirrored that of the rest of the country without regard to political affiliation.

    14. Re:Good government management by Solandri · · Score: 4, Informative

      The median household income of New York City is $60,879. In particular, Queens is $64,509, and the Bronx is $37,397, and Brooklyn is $56,942 (these two neighbor Queens). Median income is the income of the 50th percentile household. So nearly half the people in this area live in NYC on less than $50k.

    15. Re:Good government management by magzteel · · Score: 2

      Or, NYC could take that $3 Billion dollars and hire 25,000 workers with $50K annual salaries for two years to rebuild and modernize the city's subway system which will provide much greater and longer term economic benefit to the city than an Amazon office building.

      NY wasn't writing Amazon a check for 3 billion dollars.

    16. Re: Good government management by ShanghaiBill · · Score: 4, Interesting

      For the same billions, they could probably attract hundreds of smaller companies that would have far more impact on the city.

      Exactly. What NYC should be doing is improving their overall friendliness to commerce. Better transportation infrastructure, fewer restrictions on the construction of housing, fewer petty regulations, and a more streamlined bureaucracy. It should not take six months and 17 forms to open a taco stand, and nobody should need a license to paint fingernails.

      Many growth friendly policy changes would cost nothing. Others, such as infrastructure improvements, would be expensive, but are badly needed, and will benefit the city for many decades to come.

    17. Re: Good government management by ShanghaiBill · · Score: 2

      What does "fund a tax break" mean?

      It takes money to run a city. If Amazon is paying less, then someone else is paying more.

      If a mugger leaves the cash in your wallet do you consider that some kind of gain for you?

      Getting mugged happens randomly. We should be making our tax system less like mugging by having fair and uniform rules.

      People were buying apartments

      For every buyer, there is a seller. What you are really saying is that prices increased from their already sky high levels.

      developers were planning to build, new businesses would have been created.

      Developers in NYC are always planning to build ... and their building permits are denied 90% of the time. If NYC wants more construction and more businesses, they don't need to spend $3B. They can instead spend $0, and just stop saying "No".

      these would have been jobs for locals

      The local unemployment rate is at 3.8%, which is an historic low. The locals already have plenty of jobs to choose from. Amazon would have just bled workers from other companies, who couldn't match Amazon's wages because they weren't getting the same subsidies.

    18. Re:Good government management by Joey+Vegetables · · Score: 2

      A lot of these people live in public, rent-stabilized, or rent-controlled housing. My understanding is that those aren't available to new residents, except by lotteries and other mechanisms that can't be relied upon. Go to Craigslist and look at the rents you can find there for semi-ok neighborhoods, which most of them are, but not quite all - you have to be a local, which I'm not, to know for sure. But avoid eastern Brooklyn, immediately adjacent sections of Queens, the South Bronx, and Harlem, unless you know exactly what you're getting into. Then consider NYC's insane tax rates. Then consider how you can make $50k gross, maybe $35k net, and still be able to pay $2500 a month in rent. You can't, and that isn't what's happening. The people who make that little live in either subsidized housing or very bad neighborhoods, which are vanishing in much of the city due to gentrification.

      --

      Nonaggression works!
    19. Re:Good government management by ranton · · Score: 3, Insightful

      They were never spending $3B. They were refunding $3B worth of the taxes Amazon would have paid. Too many stupid people commenting on something they don't understand.

      Try to get your facts right before calling others stupid. New York City and New York State were providing a combination of tax credits, grants, and other assistance such as shared spending for infrastructure projects. It was certainly not $3B of just tax breaks. Tax breaks certainly are preferred over grants, since less money is lost if the jobs don't materialize and less money is spent up front, but in the end it is still revenue lost for spending elsewhere.

      In some Midwest town which is hurting for jobs, the argument that these Amazon jobs would be "net new" jobs is more compelling. But New York city has little problem attracting jobs; it has more problems funding infrastructure problems or offering affordable housing. The Amazon deal certainly could have been a good thing overall for New York (I originally said it just wasn't a guarantee Long Island would benefit), but the deal itself left a lot to be desired. Considering Maryland offered $6.5 billion more in incentives than Virginia at a location 20 miles away, but still lost, shows how little Amazon was using these incentives in its decision to locate their headquarters.

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      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    20. Re:Good government management by Anonymous Coward · · Score: 3, Insightful

      Just a quick distinction.This was not Long Island, it's Long Island City, in Queens, not on Long Island. Probably not important to non-New Yorkers, but LIC is a 20 minute train ride from Manhattan, Long Island is longgggg train or car ride.

    21. Re: Good government management by MachineShedFred · · Score: 2

      Found the guy who has never been on the NYC subway.

      Hint: it's already a smoking sewer run into the ground by incompetent management, chronic underfunding, and decades of deferred maintenance.

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    22. Re: Good government management by jeff4747 · · Score: 2

      No, they can not do this because New York City doesn't run the subway. New York State does.

    23. Re: Good government management by ShanghaiBill · · Score: 2

      This subsidy was Governor Andrew Cuomo's baby. He was heavily invested in it.

      He even offered to change his name from "Andrew" to "Amazon Cuomo".

      Nobody on the planet is going to be less objective.

      He has less credibility than a NYC Bowery bum to be making forecasts about it.

      By quoting him, you are saying much more about your own judgement and gullibility than about the supposed benefits of the subsidy.

    24. Re:Good government management by fafalone · · Score: 2

      The rent situation isn't that bad outside of Manhattan and highly gentrified areas. There's a whole range of places between Williamsburg and South Bronx. People do it by having roommates. Outside Manhattan, there's a lot of very nice areas where a 2br is under 2k in rent, so two or more people split it and pay less than 1k each in rent. If you don't live in a fancy building the situation is even better. I'm a 10min walk + 10min subway ride from lower Manhattan, in a highly gentrified, very nice area, and in a market rate apartment that's 2br for under 1700/mo, so my share is around 850. The building and apartment are perfectly fine themselves its just there's no amenities in-building; if I wanted that there's plenty of 4k+ 1 bedrooms here.

    25. Re: Good government management by astrofurter · · Score: 2

      Also, a smaller company probably can't afford to hire expensive Ivy League lawyers to pass suitcases full of cash to city councilmen in a dark parking lot.

  2. Place it where they need it by Only+Time+Will+Tell · · Score: 4, Insightful

    I've always said if Amazon wants to be really beneficial and transformational, place their HQ2 in a rust-belt city. NYC is fine, they are millions of jobs and a high cost of living. Places like Cleveland, Indianapolis, Pittsburg, etc. need the jobs and would be very supportive to Amazon.

    1. Re:Place it where they need it by PolygamousRanchKid+ · · Score: 5, Insightful

      I've always said if Amazon wants to be really beneficial and transformational, place their HQ2 in a rust-belt city.

      Bezos doesn't own a home in a rust-belt city. Unlike Washington, DC or NYC.

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    2. Re:Place it where they need it by squiggleslash · · Score: 4, Funny

      Plus if Bezos gets a home in Flint, MI, I bet the water problem will get fixed pretty quickly.

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    3. Re:Place it where they need it by hierofalcon · · Score: 4, Interesting

      Land costs are so much less, Amazon wouldn't need 3 billion. Plus, since real estate costs are so much less the pay ongoing for employees would be lower. Granted an influx of 25,000 employees would increase city costs in many ways (schools, roads, utilities, and would temporarily spike house costs). Still, they are unlikely to come anywhere close to costs of living in NYC.

    4. Re:Place it where they need it by 93+Escort+Wagon · · Score: 5, Interesting

      I've always said if Amazon wants to be really beneficial and transformational, ...

      Stop right there.

      Like most companies, Amazon is only interested in maximizing their profit. They won't say that, of course, because their expensive PR teams tell them how stupid it would be. So they spend a few million putting together a BS spiel about being beneficial and transformational - what's a few million against three billion dollars in taxes they won't have to pay?

      The real problem is - the local governments buy into the lie hook, line, and sinker. They turn around and tell people Amazon is going to create 25000 jobs, which will be filled by local people. They keep a straight face while they eloquently speak of the billions of tax dollars the local economy will be gaining due to these new positions. Of course it's in their interest to do all this, because they are politicians and need lies like this to prop up their future campaigns.

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    5. Re:Place it where they need it by s122604 · · Score: 4, Interesting

      I'd just say, as an (in theory at least) potential employee, place it anywhere but Chicago, California or the Northeast Corridor..

      It would be nice to live in a place where a 900 square foot condo doesn't cost a half million dollars..
      Austin suburbs are still relatively affordable, as is Nashville, Atlanta, Pittsburgh, and pretty much any Rust belt location.

    6. Re: Place it where they need it by Joey+Vegetables · · Score: 2

      In Cleveland as well, but starting from a very low base, and the increase is confined to a small handful of rapidly gentrifying areas. In general, housing here is still a bargain. (Example: my 4 bed, 1800 square foot single family house, with a driveway and yard, in the safe-ish suburb of Lakewood six miles from downtown Cleveland, and arguably the best bus service in the western suburbs, is now worth about $200k. Comparable price in, say, Astoria or Jersey City would be easily 6 to 10 times that.)

      --

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  3. Re: Idiots! by Anonymous Coward · · Score: 2, Insightful

    They thought they would take advantage of New Yorkers, the toughest, meanest, shit-throwing bilkers in the country.

    Not any more.

  4. FoxConned by sdinfoserv · · Score: 2, Insightful

    Citizens figured out that skyrocketing housing prices resulting in increased homeless, gentrification, and billions in tax payer payola (aka "incentives" https://www.bizjournals.com/ne... ) just isn't worth it.
    Good for them.

    1. Re: FoxConned by squiggleslash · · Score: 2

      "My house is worth 180x more?! This is a fucking outrage!"

      - a renter.

      --
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  5. Re:good by squiggleslash · · Score: 4, Insightful

    NYC will do just fine. It absolutely never needed Amazon, and Amazon would have caused problems for it (it's expensive enough to live there as it is due to the national shortage of decent urban space), not solved anything.

    As far as the notion that it was right for a massive business to punish a city because its government didn't want to subsidize it, I'm truly disgusted that anyone would suggest such a thing. I'd like to see less subsidies to corporate consumers in general (Amazon is a corporate consumer, a user, not provider, of infrastructure, for example), and for cities across the country to stop competing with one another on who can flush their local economies down the toilet as quickly as possible just to attract a large employer who'll cost local taxpayers more than they bring in.

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  6. I bet it's also the new tax law effect by blahbooboo · · Score: 4, Interesting

    I bet also they realized it was going to be even more expensive to have employees in NYC due to the new Fed tax law. Higher tax states like New York have become even more highly taxed due to the cap on the state level income tax deduction from federal taxes (SALT).

    https://nypost.com/2019/02/13/...

    1. Re:I bet it's also the new tax law effect by blahbooboo · · Score: 4, Insightful

      Thank god, it should have never existed. It just means those in states with no or low income tax are subsidizing those that live in places like NYC or CA. Now maybe those people will realize how much all their taxed out the ass govt programs cost.

      Too simplistic thinking on your part. The high tax states contribute far more to the federal tax budget that the states with no or low state income taxes. For example, NY sends $38 billion more to the federal government than it gets back.

    2. Re:I bet it's also the new tax law effect by blahbooboo · · Score: 3, Insightful

      Here is a recent write up

      https://www.ny.gov/programs/ta...

      the law disproportionately hurts “donor states,” like New York, which already contributes $48 billion more annually to the federal government than it gets back. You're no income tax states that you say are subsidizing high tax are NOT, in fact they are sucking down from the fed gov more than they contribute.

    3. Re:I bet it's also the new tax law effect by blahbooboo · · Score: 2

      One other thing, ND GDP is $49.77 billion. NY State is 1.547 trillion. ND is a rounding error for NY state. But keep telling using the per capita number so you believe ND citizens are contributing more...

  7. There was NO GIVEAWAY of money by drnb · · Score: 3, Insightful

    It's honestly anti billion dollar government giveaways. ... Most of the opposition is about giving away billions of dollars in tax credits to a company that already has billions of dollars!

    There was no giveaway of money, no money was leaving the pockets of NYC government. What Amazon was getting was a lower tax rate, gov't revenues would be lowered. But now the government's revenues will be zero. That is a net loss for government. That was an awfully expensive political statement to make.

    1. Re:There was NO GIVEAWAY of money by Anonymous Coward · · Score: 5, Insightful

      Granting the tax break is far, far more expensive.

      If the amazon deal is so lucrative, why don't we just give that tax break to every single company that operates in the city? The simple answer is because amazon, and any other company present, costs the city money. Infrastructure has to be maintained, city services have to be provided, etc. All that shit costs money.

      If the taxes they collect with the deal aren't enough to cover the expenses of Amazon, then you're just creating a ponzi scheme, with other people stuck picking up the tab.

  8. Re:Lol by jellomizer · · Score: 5, Interesting

    The thing that bugged me is that New York City has a huge economy by itself. Those Amazon Jobs wouldn't put a real dent in the local economy. Now if they were 100+ miles in upstate, then those would be a big benefit to the local economy.

    Metro NY shouldn't have to bend over backwards for Amazon for a fraction of a percent increase in its local economy. While a small town, say a post industrial town, Amazon could bring in new life.

    I hoped that Amazon got a lesson from this, that even though you are a big company, don't expect everyone to bend over backwards to kiss your butt.

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  9. A rust belt city doesn't have tons of money by rsilvergun · · Score: 4, Interesting

    lying around for direct & indirect subsidies. That's what this is about. As near as I can tell NY was basically going to pay Amazon for the jobs (similar to what Foxconn did to Wisconsin). The likelihood is that Amazon would be gone as soon as the subsidies dried up.

    It's like a sports stadium without a team to watch. It doesn't make sense to pay companies to bring jobs. Spend the money making your state somewhere people actually want to live and the companies will have no choice but to bring the jobs because that's where the workers are.

    Now, you're right that this is leaving middle America behind. They haven't been investing in their land or their people and they're feeling it. Part of me, the bitter, angry part, wants to leave them to their fate (it's mostly their own political decisions that got them there) but the sane part of me knows that's bad juju for all. Folks usually double down on bad decisions in a crisis. Better to have the Fed move in with jobs programs like we did the last time things got this bad. That's what the "Green New Deal" is for.

    Bottom line, Amazon's pushing Supply Side (aka Trickle Down) economics on NY (pay us for the jobs and the money you give us will trickle down to workers). NY was smart enough not to buy it for a change. Here's hoping the rest of the country will tell Amazon to go pound sand and they'll have to pay for the services they want and need.

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    1. Re:A rust belt city doesn't have tons of money by DigiShaman · · Score: 2, Insightful

      The "Green New Deal" was a Communist Manifesto for America. There was nothing remotely intelligent about it other than a trial balloon to gauge just how really stupid the average American is to buy into it. Politically, it's a diabolical genius power-grab ploy!!!

      Now put down the pom poms.

      --
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  10. Re:Lol by lgw · · Score: 5, Interesting

    The whole HQ2 thing was a scam to begin with. Good to see NY rejecting the con. Opening 2 HQs next to Bezo's other 2 houses was so blatant, I'm amazed he thought it would fly.

    --
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  11. Good for NYC by rsilvergun · · Score: 4, Interesting

    I've had it with this race to the bottom where we're all falling over ourselves to see who can give the most of my tax payer dollars in direct/indirect subsidies in exchange for a handful of jobs (yes, 25,000 is a "handful" to a city the size of NY).

    I have to pay for roads and schools, let Amazon chip in. Last I heard they're the most profitable company in history (unless Apple's got it this week).

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  12. Amazon has grown too large by hedge00 · · Score: 5, Interesting

    This is putting the cart before the horse. Corporations exist at the benevolence of society not the other way around. Amazon Corp uses strong arm tactics to wheedle their way out of paying the taxes that they exist to generate, because they are big enough to play municipal governments against each other. Time to break them up.

  13. Re:...and the horse you rode in on! by bobbied · · Score: 2

    Is it just me, or can you hear them shouting that (and gesturing)?

    I'm hearing the sounds of hot tar and feathers myself...

    --
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  14. There were no "conservatives" involved by Anonymous Coward · · Score: 4, Insightful

    Those subsidies were offered up by Democrats Andrew Cuomo and Bill De Blasio.

    Jeff Bezos gives money to Democratic candidates, not Republicans.

    Where are the "conservatives" in the story?

  15. Local gov'ts don't buy the line by rsilvergun · · Score: 4, Interesting

    but their voters, who are desperate for jobs, do. Take the gig economy & temp work out of the equation and we're pushing 9% unemployment. Meanwhile the politicians figure they'll be out of office by the time the bonds used to pay for the subsidies come due.

    It's just another example of the rich plundering the commons. Robert Reich calls it a Switcheroo. It's older than that though. We used to say "Privatize the profits and Socialize the losses".

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  16. NYC dodged a bullet by wyattstorch516 · · Score: 2

    I'd bet most of those 25K "new" jobs would have been the result of moving people from the Manhattan office over to LIC. The rest would probably be filled with low wage support or warehouse workers. Amazon would have pocketed the money and as soon as it ran out started to move the workers to other locations.

  17. New Metric required by Gorkamecha · · Score: 4, Interesting

    Can we use a new metric in place of Jobs?
    Jobs might have meant something back in the day - but the word has been mangled so completely it could mean "well paying blue collar work" or it could be "third shift, part time apprentices who have to pay for their own uniforms"

    How about instead we expect a "wealth" metric like "We plan to employ X million dollars of employees"?

    ...they won't of course. They don't want us regular plebs being able to do the math in our heads.
    "Wait....we we're giving you 1 billion/y in tax breaks, and you're only bringing in 1/2 billion/yr in wealth......"

  18. Re:They weren't suspending income-tax, genius. by DogDude · · Score: 2

    6 of one, half dozen of another. Whether you have them handing $3 billion in cash back to people, or you have people/companies living/doing business in NYC and simply not paying $3 billion in taxes, it's the exact same thing. So sure, you can say the individual employees will pay, but the company won't. It's the same thing. $3 billion is $3 billion.

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