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This is such a great deal for NYC As the article says, they give up $1.5B over 10 years, but then get "Projected incremental tax revenue of more than $10 billi
by rb808 8y ago
This is such a great deal for NYC
As the article says, they give up $1.5B over 10 years, but then get "Projected incremental tax revenue of more than $10 billion over 20 years."
I dont know where that comes from but the payroll and property taxes paid by 25k employees dwarves the incentives.
The most important part is it cements NYC as the main tech center on the East Coast. That is invaluable.
EDIT: I wonder if NYC with tax incentives, Amazon would still pay more tax than regular tax rates in FL, TX.
- giarc 8y agoThat $10 billion likely assumes all new staff. There are going to be many current NYC citizens who simply switch jobs to Amazon. Therefore they won't contribute any incremental tax increase. Only if their previous employer rehires their position will a net new position be created.
- slimed 8y agoWhy would their tech sector employer not rehire for their position?
- giarc 8y agoLabour shortage related to big new employer hiring everyone.
- vthallam 8y agoWhy wouldn't the previous employer rehire though? Unless the employee is someone who was just sitting around and not contributing to the company.
- giarc 8y agoUnemployment is ~3% and Amazon comes in and sweeps up all the available (and non available) tech employees in the area. They may want to hire, but can't.
- cddotdotslash 8y agoI find it hard to believe that 25,000 people are moving jobs and their previous employers are saying "we're not replacing them."
- Fomite 8y agoAssuming the economy stays on a decent trajectory. But even then, there's probably some inefficiency in that replacement.
- BonesJustice 8y agoMost will be replaced, and most of the replacements will also be locally sourced. Company A creates a “new” job. They hire an employee of Company B, who in turn poaches a replacement from Company C, and so on. It’s fair to assume that some hires will be new arrivals to NYC, and some might come from the pool of unemployed. Most will have simply hopped from one employer to the next, replacing one job opening with another.
- giarc 8y agoI never said 25,000 people would be from neighbouring companies, just that a non-zero percent would be from the area already. So they aren't going to contribute incremental tax increases.
- vdnkh 8y ago> There are going to be many current NYC citizens who simply switch jobs to Amazon. Therefore they won't contribute any incremental tax increase. How about for tech workers to get a raise? Or to move to a different part of the city? And besides, this is just conjecture. Do you have any data or polls or even anecdata which supports your claim?
- lostlogin 8y agoBut wouldn’t many of those people have lived there and paid taxes anyway?
- anonyppppp 8y ago"The most important part is it cements NYC as the main tech center on the East Coast." This has long ago been cemented...
- killyp 8y agoI wouldn't say that at all. NYC is definitely large for tech on the East Coast but so is Boston in tech R&D, DC for government related tech companies, and Research Triangle in NC and Austin TX (if this counts as East Coast) are both hotbeds for tech startups. There really is no Bay Area equivalent on the East Coast.
- briankelly 8y agoSorry to be inflammatory but in what world is Austin, TX considered East Coast?
- goobynight 8y agoYour state should probably border the east coast to fall into the category of "east coast".
- astura 8y agoNowhere in Texas counts as "East Coast."
- synaesthesisx 8y agoNot really - Boston has been far ahead in terms of tech/VC/innovation on the East Coast
- frgtpsswrdlame 8y agoOnly if you think Amazon wouldn't have moved there otherwise. I think Amazon probably would have picked NYC no matter what so this is $1.5B straight down the toilet.
- StanislavPetrov 8y agoThis is such a terrible deal for NYC. For the last decade Cuomo has been giving subsidy after subsidy, tax break after tax break, to corporations from Long Island to upstate New York. Each one came with projected revenues and gains, and each and every one failed miserably and ended up costing NY taxpayers countless billions - while most of the corporations walked away with a profit. https://www.niagara-gazette.com/news/local_news/state-of-subsidies-cuomo-s-programs-fail-to-propel-job/article_9dc3243a-11d7-11e7-9741-cf04a8cac611.html https://www.niagara-gazette.com/news/local_news/state-of-sub... https://nypost.com/2018/07/21/cuomo-has-wasted-billions-and-somehow-hes-still-here/ https://nypost.com/2018/07/21/cuomo-has-wasted-billions-and-...
- marricks 8y agoDoesn’t NYC have a housing crisis already? I’m not sure they need a worse one coupled with the gentrifying forces of thousands of tech employees moving in. $1.5 billion in housing or just really anything to help people who already live there is what should happen.
- vdnkh 8y ago>anything to help people who already live there is what should happen. People who live here will benefit from this. NYC has a much more diverse candidate pool than SV - 47% of our tech workers are immigrants. Our schools are more diverse; there are more programs to teach underrepresented groups CS skills. They will benefit from this. >gentrifying forces of a thousands of tech employees. Can you explain how gentrification will actually play out, and how it's different than 25k jobs being created organically over the next decade? >$1.5 billion in housing Just because Amazon has been given an incentive doesn't mean that housing gets short sticked. https://www1.nyc.gov/site/hpd/about/press-releases/2018/07/mayor-de-blasio-announces-largest-year-for-affordable-housing-production.page https://www1.nyc.gov/site/hpd/about/press-releases/2018/07/m...
- rb808 8y agoNYC is expensive and there is a lack of affordable housing. Cheaper than SFO though as there are hundreds of new apartment buildings always being built. https://www1.nyc.gov/assets/buildings/html/nyc-active-major-construction.html https://www1.nyc.gov/assets/buildings/html/nyc-active-major-... https://www.nynesting.com/new-developments https://www.nynesting.com/new-developments
- meddlepal 8y agoYea NY's problem isn't like SF's or Bostons. NYC knows how to build and will build, it's just they need to build even more and faster. Nothing stays forever in NYC which is kind of why it is such a great city.
- JumpCrisscross 8y ago> Doesn’t NYC have a housing crisis already? New York has a problem. San Francisco has a crisis. I just negotiated a 2% rent cut. Like four luxury buildings opened nearby and sucked out our building's highest-earning renters by offering lots of perks for marginally more rent. I asked my landlord if he wanted another vacancy or to keep a hassle-free tenant--he budged. And my experience is not that unique. "Manhattan rents dropped 3.8 percent in March [2018] from a year earlier, the most since 2011" [1]. [1] https://www.bloomberg.com/news/articles/2018-04-12/pick-a-new-york-city-borough-rents-are-falling-there-and-fast https://www.bloomberg.com/news/articles/2018-04-12/pick-a-ne...
- boomka 8y agoI don't know who you are referring to as NYC, but citizens of USA as a whole are worse off. Pitting one USA municipality against another to extract subsidy for what Amazon would do anyways is just another mechanism for wealth transfer from the poor to the rich.
- JumpCrisscross 8y ago> to extract subsidy for what Amazon would do anyways I don't think they would. Big infrastructure in New York is expensive, financially and politically. Without Amazon's pressure, there is no way the new campus would have been developed, hooked up and approved as quickly as it has been.
- chrisseaton 8y agoIt's not just money is it? It's also things like infrastructure they'll provide? Could that possibly make Amazon more efficient, and so employ more people who spend their salaries and so on, creating a net gain for the whole US?
- boomka 8y agoAll of that would be true in any other location. One could argue other locations actually need such infrastructure more. Amazon was not hiding the fact that they would build HQ2 anyways, and in USA. There was absolutely no need to donate them taxpayer money for it. And if you do, then taxpayer should own the infrastructure, with Amazon paying for use.
- konschubert 8y agoA better deal would have been not paying 48K per job and still getting Amazon to NYC. An equally good deal would have been not paying 48K and getting Amazon elsewhere in the US. I mean, not for NYC, but for the US as a whole it would have been equally good. The race to the bottom is lined with "good deals"...
- peteretep 8y ago> A better deal would have been not paying 48K per job and still getting Amazon to NYC. And an even better one would have been free ponies for all and rainbow shitting dinosaurs. Also wasn’t on the table, however.
- fenwick67 8y agoThe operative word being "projected"
- briffle 8y agoPeople said the same thing about the Foxcon deal in WI. And they have been drastically scaling back the scope of the plant, the skill and wages of workers required, and the number of them. Yet the state agreed to fund infrastructure improvements, and cash payouts to the company.. (not tax breaks). Basically, the subsidy per employee has more than doubled, and the average wage has dropped by 30%, and they barely started construction. One of the big issues I have with these deals, is towns/cities don't have experience adding safety clauses to these, that are legally binding..
- panic 8y agoAre New Yorkers going to see these tax revenues, or are they just going to see housing prices go up?
- InclinedPlane 8y agoThis implies there is zero cost to NYC from the operation and no opportunity cost from giving up $1.5 billion. It also implies that no tax revenues would have come from the people and businesses that Amazon will inevitably force out.
- CPLX 8y agoI beg to differ. New York City doesn't have a problem attracting jobs. Like not even a little bit. The idea that this is actually incremental revenue for the city is extremely debatable. New York City is a really big place. Midtown is the largest central business district in the country, and Lower Manhattan is the third largest, after Chicago. There are 1,700,000 jobs in Manhattan alone and 3,900,000 in New York City. We're supposed to all bow down before a sixth of a percent change, spread out over 5-10 years? Really? There are single buildings in New York City that employ as many as 25,000 people. Back when the twin towers were around they contained 55,000 employees between them. JP Morgan Chase is putting about 15,000 employees in their new HQ building, without a breathless 13 months of coverage. This shit happens all the time. You could pick any number of random single city blocks in Manhattan with way over 25,000 jobs. Amazon needs New York way more than New York needs Amazon. It's the global center of media, fashion, advertising, finance, and many other categories of Amazon's business. This giveaway is a goddamm travesty. How about instead, Cuomo gives me and any other startup founder who's been in Brooklyn or Queens for decades $48,000 for every job we've created, and we tell Amazon to go fuck themselves.
- ng12 8y agoSeriously. Google owns the fourth largest building in NYC: https://en.wikipedia.org/wiki/111_Eighth_Avenue https://en.wikipedia.org/wiki/111_Eighth_Avenue
- jondubois 8y ago>> This giveaway is a goddamm travesty. How about instead, Cuomo gives me and any other startup founder who's been in Brooklyn or Queens for decades $48,000 for every job we've created and we tell Amazon to go fuck themselves. So true. The rent in NYC is already very high. What kind of lifestyle can a blue collar worker afford in NYC? Obviously the only winners here are corrupt politicians and greedy Amazon execs. They should all be jailed.
- zaroth 8y ago> Obviously the only winners here are corrupt politicians and greedy Amazon execs. They should all be jailed. You can dislike tax incentives if you want to, but the hyperbole is so over the top it becomes radical, divisive, noise. We need less of this in these discussions.
- FooHentai 8y ago>I dont know where that comes from but That's key then isn't it. Where it's going to come from needs to be clear, or else there's a very real risk it's not a good deal. Sales pitches stack the deck on expected benefits ALL the time. Diligence is essential here, and the devil is always in the details. 'Potential benefit' rapidly morphs to 'definite benefit' when stuff percolates up into articles etc.
- segmondy 8y agoYes, if you get 25k fresh new employees into NY. Chances are a good amount of these employees are already living in NY and paying payroll and property taxes.
- BonesJustice 8y agoAlso, I hope those averages are skewed downward by non-engineering jobs, because if Amazon thinks they’re going to be able to hire their usual caliber of engineer for $150k/year in NYC, they’re in for a nasty surprise. Apart from having to compete with NYC’s already bustling tech presence, they’ll be competing to hire the same engineers that investment banks, hedge funds, and HFT groups are after. The comp packages in fintech are impressive, and generally all cash (as opposed to a mix of cash and stock).
- heimatau 8y agoHmmm. This strikes me as a way to move slaves. If Amazon has their workers get taxed by NYC, Amazon gets to save money. Kind of nasty when it's thought of this way. :/