27 ms·

Facing opposition, Amazon reconsiders NY headquarters site, two officials say

160 points by ihuman 8y ago

ceejayoz 8y ago
> “The Amazon transaction was probably the greatest economic transaction in 50 years in this state,” Cuomo said in a recent radio interview. “We don’t get a business to come with 25,000 jobs anymore. I spend hours and days trying to get 100 jobs, 200 jobs.” This sounds like a severe waste of his time.
- Nasrudith 8y ago
  Yeah the proper way to get ahead is to make the city desirable as a location not to bribe with sweetheart deals. One gets diminished returns and only incentivizes one party. The other incentivizes everyone in the market and gets full returns.
  - hannasanarion 8y ago
    And the city is already desirable. Google and Apple are building huge campuses in New York in the Upper West Side and Hudson Yards respectively, and they aren't getting paid two billion taxpayer dollars to do it.
    - dajohnson89 8y ago
      If i understand correctly, almost half of that sum is from pre-existing tax incentives.
    - rlanday 8y ago
      Google's currently in Chelsea and is expanding in Hudson Square, not the Upper West Side.
      - epc 8y ago
        Google has taken over some space (unclear how much) in Starret-Lehigh and Alphabet/Sidewalk have space in Hudson Yards. The new offices down by Houston are years away.
    - brianwawok 8y ago
      Are you sure? Deals seem pretty common
    - throwawaysea 8y ago
      Of the potential ~$3B NY subsidies (this is what it is projected Amazon can claim, not what is promised), I believe only $505M is specific to Amazon (capital grant from state). The rest is from pre-existing programs including Excelsior, ICAP, and REAP. Chances are, Google, Apple, and the rest are all going to be taking advantage of these programs. https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de-blasio-announce-amazon-selects-long-island-city-new-corporate https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de... > To bring this transformational, multibillion-dollar project to New York, the State offered a package of performance-based incentives totaling $1.705 billion. The package includes a $1.2 billion in tax credits through the Excelsior Jobs Program, which is directly tied to Amazon's commitment to create 25,000 new jobs and no less than $2.3 billion investment over ten years as well as a $505 million capital grant that is directly tied to Amazon's commitment to invest $3.6 billion and create up to 40,000 new jobs over 15 years. > Under pre-existing as-of-right programs authorized by law, Amazon is eligible for a partial property tax abatement through ICAP and an annual credit of $3,000 for twelve years per eligible employee under REAP, a program available to all companies to encourage job growth outside of Manhattan. REAP benefits for Amazon's 10-year expansion are projected at $897 million through 2038, and ICAP will abate approximately $386 million.
- specialp 8y ago
  Well he is referring mostly to moving companies to the upstate region which actually really needs it. But I guarantee it is not convincing a company to bring 100 jobs to NYC. If Amazon wanted to build HQ2 in Utica NY or Buffalo I'd say give them all the breaks they want. But they were always going to move to a NY, Boston or DC for the talent and the contest was a sham.
  - bilbo0s 8y ago
    >I'd say give them all the breaks they want... Just some friendly advice from a Wisconsinite, you might want to walk that statement back a bit. Because that kind of attitude is how we ended up on the hook for $4 to $5 billion for Foxconn. (And that's for not even HALF the jobs that Amazon is talking about. All of them paying less than the Amazon jobs too.) People have to start getting rational, and giving out benefits packages that actually make sense. "Give them all the breaks they want!!!", can lead to some really dark places. On the other hand, misery loves company, so, yeah, I suppose if New Yorkers are that anxious, there's plenty of room down here to join us as the nation's corporate welfare laughing stock.
    - jdhn 8y ago
      Isn't that money only to be paid out if Foxconn actually hires all the people they said they would? Last I heard, Foxconn wasn't even sure that they were going to hire as many people as they originally thought they would.
      - whatok 8y ago
        Yes, that's correct. No tax break is structured as a check that just shows up. They're usually contingent on meeting hiring thresholds or tenure. Amazon's tax breaks were going to be by head over several years.
        addicted 8y ago
        Significant parts of the Wisconsin Foxconn deal were structured that way (such as development of infrastructure, etc). The Amazon deal only benefits Amazon if they put money in, AFAICT. The government isnt on the hook to build anything for them. They get tax breaks on property and income taxes.
- awakeasleep 8y ago
  I wonder what he could actually mean by this quote, unless it's an outright fabrication. NY, home of NYC, struggles to attract 100 person businesses? How am I supposed to interpret that claim?
  - x1798DE 8y ago
    I wouldn't be surprised if it's true for parts of New York other than NYC. New York is a very high-tax and regulation-heavy state. NYC is a big enough draw to overcome that, but I don't think Buffalo is similarly attractive just because NYC is in the same state.
    - j-c-hewitt 8y ago
      The way the sham works is to give the companies tax breaks and regulatory easements and then to shunt the costs onto the employees. The employees bear the NYS taxes and the companies connected enough to get exceptions reap the competitive benefits.
  - nickv 8y ago
    NYS != NYC. I imagine it's hard to get a 100 person business to move to Syracuse or Rochester nowadays.
mattbuilds 8y ago
I can't even try and take an article like this seriously. I understand it says in the article that Jeff Bezos owns the WaPo, but the way it's written sounds like Amazon trying to make a threat. Just look at the way the article starts off. > Amazon.com is reconsidering its plan to bring 25,000 jobs to a new campus in New York City following a wave of opposition from local politicians, according to two people familiar with the company's thinking. Amazon isn't considering bringing 25,000 jobs to NYC out of the goodness in their heart. It's a business play where they are doing what they think is most profitable for them. They want to be in NYC because it's the largest market in the US. I think their plan all along was to come to NYC. They just thought they could stage this elaborate "pick my city" nonsense and get a bunch of tax breaks. This article just sounds like them whining that people caught on.
- teh_infallible 8y ago
  I also like how all opposition is attributed to “politicians,” as if the public were begging for Amazon to come to New York.
  - throwawaysea 8y ago
    Per this poll from 2 days ago, 69% of the public approves of HQ2 coming to NY, with support across all demographic groups. https://harrisx.com/2019/02/new-poll-shows-overwhelming-support-among-new-yorkers-and-queens-residents-for-amazons-new-headquarters/ https://harrisx.com/2019/02/new-poll-shows-overwhelming-supp... ------ Other key findings from the poll include: 85% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will create good jobs for New Yorkers and Queens residents 77% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will improve the economy of New York City 70% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will raise New York City property values 68% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will help make New York City an East Coast tech hub 58% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will raise the tax revenues New York needs for education, transportation, and other vital services 55% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will create new opportunities for local and small businesses
btown 8y ago
Cached link: https://outline.com/4qM8rZ https://outline.com/4qM8rZ
Nelkins 8y ago
As someone who lives in Long Island City, the opposition to HQ2 seems mostly coming from a vocal minority. Sure, most people are not in favor of the tax breaks, but they're also primarily in favor of Amazon coming in general[0]. There is so much misinformation about these tax breaks...so many people are saying, "We're spending $3 billion! This is unconscionable!" without understanding that NYC isn't actually going to be cutting a check to Amazon and tax revenues will almost certainly be net positive as a result. Really, the political posturing about this is bonkers. The local council member, Jimmy Van Bramer, now says he is allegedly against this deal[1]. Here's his signature on a letter in favor of the deal just about a year prior[2]. In my mind, the biggest problem is where we're going to put all these people. I really hope (but am not holding my breath) that our local pols have the courage to vote in favor of upzoning large swaths of the area to provide enough housing for everyone. Otherwise the most vulnerable among us will just get pushed further to the fringes. I'm against tax breaks for special interests, as I think it is a prime example of crony capitalism. I'm disappointed that Cuomo and DeBlasio offered any argument besides "NYC is a dynamic city with a great talent pool and halfway decent infrastructure for US cities." But the amount of fear-mongering, inconsistencies, and falsehoods swirling around HQ2 really irritate me. [0] https://poll.qu.edu/new-york-city/release-detail?ReleaseID=2589 https://poll.qu.edu/new-york-city/release-detail?ReleaseID=2... [1] https://twitter.com/JimmyVanBramer/status/1093172791686377472 https://twitter.com/JimmyVanBramer/status/109317279168637747... [2] https://docs.google.com/viewerng/viewer?url=https://big.assets.huffingtonpost.com/athena/files/2018/11/13/5beb0912e4b0caeec2beaa08.pdf https://docs.google.com/viewerng/viewer?url=https://big.asse...
- specialp 8y ago
  Yes it probably will end up net benefit for NYC but in any deal you have to ask did we overpay? Google bought 111 8th avenue, one of the biggest buildings in area in NYC, and also the premier datacenter location for 1.8 billion and added a lot of employees. Tax break: 0. Facebook and other large tech companies have also been expanding their staff in NYC for no tax break. NIMBYs aside in the local area I am for Amazon coming to NYC along with any other company. NYC is in effect cutting a check to them because now they are losing revenue, and starting a precedent that was previously not needed to get big companies here. The market conditions of NYC have attracted business just fine.
FakeComments 8y ago
I think the objection comes from perspective, more than anything: What sounds like a Day 1 company? - Build a second HQ where there can actually be meaningful development, like Raleigh. - Build two satellite offices in the most cozy-up-to-establishment choices possible, NYC and DC. Couple in the questionable deal making around choosing NYC, and it’s clear where the frustration comes from: we want to see the same strength of character leading Amazon as standing up to AMI. The Day 2 satellites aren’t that, for a number of reasons.
- murph-almighty 8y ago
  This is a pretty solid capture of my feelings about this. It is downright weird to swing from "Amazon chose this place for money" to "Amazon's CEO is standing up to (possibly) international cyberbullies" in the space of spending like 20 minutes on HN. It's the disparate decision making processes that are throwing me for a whirl more than anything.
gnicholas 8y ago
> the world’s most valuable company, led by its richest man AAPL ($801B) reclaimed this mantle recently; AMZN ($775B) is back to #2. EDIT: why the downvotes? I'm not saying the sentiment is wrong, but it doesn't look good for a news organization to get something like this wrong, especially when they are owned by the CEO of the company that they are misreporting on. It also tends to corroborate the pro-Amazon reporting bias that others have expressed here.
- ratling 8y ago
  Amazon is essentially Walmart for people who can use the internet. I'd bet harder on them long term (though Apple isn't going anywhere).
- jasallen 8y ago
  MSFT at $805B ;-) (disclosure, my employer, etc)
  - gnicholas 8y ago
    Touché. So Amazon is 3rd, unless someone else wants to jump in.
    - joejerryronnie 8y ago
      And after the divorce, Bezos won't be the world's richest man anymore. I wonder if Bill just so happened to leak some compromising info to regain the title!
vincentmarle 8y ago
Sounds like this HQ2 thing is becoming a complexifier for Bezos
- dajohnson89 8y ago
  :-) It makes you wonder -- had they not staged this whole HQ2 fiasco and just chose a city and moved there (you know, like companies normally do...) -- would the move to NYC be more widely accepted?
  - addicted 8y ago
    Yes. Google plans on adding more people to NYC than Amazon does. They just didn't make a huge hue and cry about it, and have faced almost no opposition.
    - gipp 8y ago
      It's not more people (6-8k I believe) but your point stands
40acres 8y ago
Fat chance of happening, but it would be interesting to see a 2020 candidate run on the promise of convincing Amazon to put HQ 2 1/2 in a swing state.
- murph-almighty 8y ago
  Put it in a district just outside of Pittsburgh with cheap housing, and there goes PA.
blocked_again 8y ago
Amazon should build their head quarters in Bangalore. Plenty of tech talent, very low cost of living compared to USA, and no shitty visa policies. Not to mention the 1.3 billion population of India which will soon sky rocket to 1.5 billion making it one of the biggest economies in the world. I guess even Canada would be a better option because of their good immigration policies.
- moate 8y ago
  1- This is boldly assuming they're trying to bring in immigrants. They likely will, but they're also not nearly as concerned about getting those people visas because if you can't get a visa, they can just select from other elite candidates who can. 2- There's also plenty of bad things about Bangalore, like the fact that the infrastructure isn't nearly as established as NYC. 3- NYC offers immediate proximity to one of the nerve centers of global commerce. There are hundreds of major multinationals based there, and that proximity is valuable. 4- The US has the 3rd largest population behind China/India, so it's not like they're lacking in bodies to fill roles. The size of the population and the size of the economy aren't the same thing (India's GDP is currently 1/10th of the US's, despite having more humans living there).
  - blocked_again 8y ago
    1 - My idea of a starting headquarters in a country which dont have much VISA issues was to help hire more diverse pool of candidates which is not limited to the US citizens/people studied in USA.They can also do internal company transfers but these things are mostly for people who are really good at politics or that is what I heard. 2 - Yup. But people from India and Indian subcontinent are used to these things. 3 - I mean Amazon already have a US headquarters. 4 - Yup. Indian economy is currently lagging behind USA. But its still a huge economy. Maybe Amazons 2nd biggest userbase after USA and its heavily growing.
untog 8y ago
If this happens (and I'm not all convinced it will, I think this is just Amazon posturing) then Cuomo, De Blasio and Amazon will have no-one but themselves to blame for it. The secrecy around bids for HQ2 was already a joke, but the announcement for NYC even more so: De Blasio and Cuomo basically just announced that it was happening whether people liked it or not. Then said they were going to do an end-run around the NYC city council to ensure it does. Some of the objections to Amazon moving to Queens are legitimate and some are not, but you can't blame residents for freaking out when a huge, huge change like this is just dumped on their neighborhoods with zero consultation or warning. (It should also be noted that the timing of this is probably not coincidental. An outspoken critic of the Amazon deal has been nominated to the state's Public Authorities Control Board, which has to approve of the deal. But he hasn't been confirmed yet, so I suspect this is an attempt on Amazon's part to stop that approval: https://www.nytimes.com/2019/02/05/nyregion/michael-gianaris-amazon.html https://www.nytimes.com/2019/02/05/nyregion/michael-gianaris...)
- jlangenauer 8y ago
  It’s worth noting that government placement of massive economic projects over the desires or even well-being of local people is a feature of Soviet and modern day Chinese economic systems. And so it seems, American capitalism as well.
  - untog 8y ago
    I will say that I think there is a balance. NIMBYs hold back large-scale development in a lot of area where it would be very sensible (high density housing in SF, for example). But at the same time, the community ought to have a say in a giant change like Amazon coming to town.
    - wbl 8y ago
      Who is "the community"?
      - subpixel 8y ago
syntaxing 8y ago
Personally, I would like to work at this new "HQ2" but the political rhetoric is pretty interesting to follow. Giving so much tax credit and incentive doesn't really make sense to me (and not just this deal to Amazon, the deal to Foxconn is even more baffling). $2.2 Billion for 25000 jobs is about $88000/job. That is a lot of tax money we're using up. On top of this, Long Island is a pretty occupationally diverse area to begin with. 25000 is a lot of jobs, but not make or break amount for Long Island that everyone is making it seem to be.
- hessproject 8y ago
  Worth noting for people unfamiliar: Long Island City is a neighborhood in Queens, a borough of NYC. While both Brooklyn and Queens are both technically on the physical island of Long Island, "Long Island" generally refers to Nassau County and the areas to the east.
Animats 8y ago
Amazon is just whining because NYC won't cut them a sweetheart deal. There's nothing stopping them from just buying or renting office space like everybody else.
quxbar 8y ago
One part I don't see people is explaining: are the NYC tax breaks amazon is getting out of line for the revenue they're bringing in? Cuomo is touting a 9-to-1 and that seems like a pretty sweet deal even if they're somewhat fudging the numbers.
- moate 8y ago
  Out of line with previous deals. Look at what wasn't offered to Google when they bought/built their office
  - quxbar 8y ago
    Google is one data point, I'm asking what the average/distribution is. Do banks get more? I can find some examples that point to this being normal: https://subsidytracker.goodjobsfirst.org/subsidy-tracker/ny-chase-manhattan-now-jpmorgan-chase https://subsidytracker.goodjobsfirst.org/subsidy-tracker/ny-...
    - vdnkh 8y ago
      That's a great source, and directly counters the "nobody else got subsidies" argument: Subsidies for NYS: Subsidy Total: $34,026,482,575 Number of Awards: 127,154 Earliest year of data: 1980
  - zjaffee 8y ago
    This is an unfair comparison, Amazon would've put HQ2 in Manhattan if they didn't get the tax deal. The tax break is specifically for bringing jobs to long island city.
- yanniesaurus 8y ago
  Echo your question. I would note that it seems that the tax breaks weren't negotiated as some special package for Amazon specifically -- actually, most of the incentives (or about $1.5B) are coming from existing programs run by NY state and NYC that reward companies based on square footage of office space created and number of jobs created. So, arguably, Amazon would have gotten those incentives anyway even if they had moved to NYC without all the fanfare of the HQ2 process. https://www.cnbc.com/2018/11/13/amazon-tax-incentives-in-new-york-city-virginia-and-nashville.html https://www.cnbc.com/2018/11/13/amazon-tax-incentives-in-new...
throwaway875u58 8y ago
Can amazon reconsider the Crystal City site too?
skookumchuck 8y ago
Ironically, the low-income community opposes high paying jobs coming to the neighborhood.
- kryptogeist 8y ago
  Sorry if I missed your point, but I fail to understand the irony here. As far as I can tell, their concern is reasonable if you take in account that a new influx o high paid employees might drive real state prices up (which in fact could benefit some people) making rents skyrocket.
  - skookumchuck 8y ago
    First off, some of those jobs will be available to them. Secondly, having high paid people around patronizing the other businesses in the area will help them and their employees and families. All you need to do is look at communities across America where the big good-paying employer folded up and left town. It's a disaster for those communities, not a boon.
sonnyblarney 8y ago
"We want jobs" "But we don't want clean, high paying high-tech information worker jobs!" Nobody is suggesting the HQ2 NYC move it out of the goodness of anyone's heart, and massive tax incentives are probably questionable. But 'jobs' are the ultimate path to some kind of opportunity for people, and the best tool against 'inequality' because it enables a much more fair distribution of surpluses than arbitrary distribution. This 'anti Amazon NYC' thing is making the classical socialist look really, really bad. If there are thoughtful changes to the program, great. But otherwise, this is effectively as good as it is going to get.
throwawaysea 8y ago
I see comments bringing up comparisons between Amazon and other NYC employers who are not asking for- or getting a tax break. But I think that comparison doesn't mean much on its own... The deal with Amazon is independent of what decisions other companies make. Other companies may have different circumstances - with respect to financials (e.g. profit margins), growth prospects, etc. Or maybe they are just bad at negotiating. But either way, all the government has to do is evaluate the incremental tradeoffs associated with making _this_ deal - is it a net benefit or not? And both parties (NY or Amazon) can make their evaluations and accept or decline accordingly. Most negotiations take place with imperfect information and involve complex assessments of the risks and tradeoffs of accepting/declining any deal. In this case, the projected 9:1 ROI on the subsidies was too good to pass up and public leaders made a decision that is probably correct. I think the general public understanding of these subsidies is also very limited, and the vocal minorities that have ruled the airwaves on this issue have painted a false picture of how the subsidies are structured. https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de-blasio-announce-amazon-selects-long-island-city-new-corporate https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de... First, note that $1.2B of the $1.7B of state benefits in this deal are from the _existing_ Excelsior program. Numerous other employers are eligible to apply. See details of program at https://esd.ny.gov/excelsior-jobs-program https://esd.ny.gov/excelsior-jobs-program Many other companies have utilized this program. Take a look at this subsidy tracker: https://projects.propublica.org/subsidies/programs/excelsior-jobs-program https://projects.propublica.org/subsidies/programs/excelsior... Note that other parts of the Amazon HQ2 deal in NY are also pre-existing: > Under pre-existing as-of-right programs authorized by law, Amazon is eligible for a partial property tax abatement through ICAP and an annual credit of $3,000 for twelve years per eligible employee under REAP, a program available to all companies to encourage job growth outside of Manhattan. REAP benefits for Amazon's 10-year expansion are projected at $897 million through 2038, and ICAP will abate approximately $386 million. Chances are, Google and Facebook and others are also going to take advantage of all these generally-available programs. As far as I can tell, the $505M capital grant from the state is the only Amazon-specific part of the deal.
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srkmno 8y ago
Silly communists and NIMBY folk are going to take away the opportunity of a lifetime from people who actually work for a living.
- linkingday 8y ago
  How exactly is Amazon's second HQ going to give the general populace of New York (wait, sorry, only those "work for a living") the opportunity of a lifetime?
  - srkmno 8y ago
    Anyone hawking wares and/or services in the vicinity of that place will prosper.
ggggtez 8y ago
I'm amazed it took three WaPo journalists and this still comes off as a biased screed that could have come from the mouth of Bezos himself. I mean, casually referencing Bezos as "the worlds richest man" instead of calling him by name or title? Come on.
credit_guy 8y ago
If HQ2 falls through, the history will remember the politicians who were opposed to this as it remembers the board of Yahoo after it rejected the $50BN offer from Microsoft: yes, high five all around right after you kill the deal, but then you are the loser of the century. 25000 jobs at an average of $150k/year. State income tax is 8.8%, city income tax 3.8%, state sales tax 4%, city sales tax 4%, property taxes, etc. You easily take back in taxes 30k/year from each employee. That's 3/4 billion per year. But then wage inflation in the whole tech sector, let's say 3% per year for a few years, for 100k employees, that's about $100MM/year. Then the real estate appreciation. We are talking millions of condos/coops going up in value. Not a lot, but a little bit everywhere adds up. In NYC every apartment sale over $1MM is subject to a 1% "mansion tax". You would see tens of thousands of apartments changing hands. That's hundreds of millions of additional tax revenue right there. Well, I guess Boston is a nice city too...
- Gabriel_Martin 8y ago
  As a Bostonian, I don't think our housing or transit can take it. I'll happily defer.
- alex504 8y ago
  Nobody informed is opposed to it because of the finances. People just don't understand why we would want so many more people when gentrification and overcrowding are already making life harder for everyone in the city. If 25000 people with jobs at over 150k a year decided to leave and go to Boston, personally I would be excited. A few things taxes can't seem to buy are lower rents and a public transportation system that isn't completely overcrowded.
- gorbachev 8y ago
  New York will be just fine without these jobs. 25K additional jobs in New York is like a bee's fart. It would be much better for the headquarters to be located in region where 25K additional jobs wouldn't be a bee's fart. In a region like that Amazon could actually make a difference to the economic growth of the area.

160 points by ihuman 8y ago

> “The Amazon transaction was probably the greatest economic transaction in 50 years in this state,” Cuomo said in a recent radio interview. “We don’t get a business to come with 25,000 jobs anymore. I spend hours and days trying to get 100 jobs, 200 jobs.” This sounds like a severe waste of his time.

Nasrudith 8y ago
Yeah the proper way to get ahead is to make the city desirable as a location not to bribe with sweetheart deals. One gets diminished returns and only incentivizes one party. The other incentivizes everyone in the market and gets full returns.
- hannasanarion 8y ago
  And the city is already desirable. Google and Apple are building huge campuses in New York in the Upper West Side and Hudson Yards respectively, and they aren't getting paid two billion taxpayer dollars to do it.
  - dajohnson89 8y ago
    If i understand correctly, almost half of that sum is from pre-existing tax incentives.
  - rlanday 8y ago
    Google's currently in Chelsea and is expanding in Hudson Square, not the Upper West Side.
    - epc 8y ago
      Google has taken over some space (unclear how much) in Starret-Lehigh and Alphabet/Sidewalk have space in Hudson Yards. The new offices down by Houston are years away.
  - brianwawok 8y ago
    Are you sure? Deals seem pretty common
  - throwawaysea 8y ago
    Of the potential ~$3B NY subsidies (this is what it is projected Amazon can claim, not what is promised), I believe only $505M is specific to Amazon (capital grant from state). The rest is from pre-existing programs including Excelsior, ICAP, and REAP. Chances are, Google, Apple, and the rest are all going to be taking advantage of these programs. https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de-blasio-announce-amazon-selects-long-island-city-new-corporate https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de... > To bring this transformational, multibillion-dollar project to New York, the State offered a package of performance-based incentives totaling $1.705 billion. The package includes a $1.2 billion in tax credits through the Excelsior Jobs Program, which is directly tied to Amazon's commitment to create 25,000 new jobs and no less than $2.3 billion investment over ten years as well as a $505 million capital grant that is directly tied to Amazon's commitment to invest $3.6 billion and create up to 40,000 new jobs over 15 years. > Under pre-existing as-of-right programs authorized by law, Amazon is eligible for a partial property tax abatement through ICAP and an annual credit of $3,000 for twelve years per eligible employee under REAP, a program available to all companies to encourage job growth outside of Manhattan. REAP benefits for Amazon's 10-year expansion are projected at $897 million through 2038, and ICAP will abate approximately $386 million.
specialp 8y ago
Well he is referring mostly to moving companies to the upstate region which actually really needs it. But I guarantee it is not convincing a company to bring 100 jobs to NYC. If Amazon wanted to build HQ2 in Utica NY or Buffalo I'd say give them all the breaks they want. But they were always going to move to a NY, Boston or DC for the talent and the contest was a sham.
- bilbo0s 8y ago
  >I'd say give them all the breaks they want... Just some friendly advice from a Wisconsinite, you might want to walk that statement back a bit. Because that kind of attitude is how we ended up on the hook for $4 to $5 billion for Foxconn. (And that's for not even HALF the jobs that Amazon is talking about. All of them paying less than the Amazon jobs too.) People have to start getting rational, and giving out benefits packages that actually make sense. "Give them all the breaks they want!!!", can lead to some really dark places. On the other hand, misery loves company, so, yeah, I suppose if New Yorkers are that anxious, there's plenty of room down here to join us as the nation's corporate welfare laughing stock.
  - jdhn 8y ago
    Isn't that money only to be paid out if Foxconn actually hires all the people they said they would? Last I heard, Foxconn wasn't even sure that they were going to hire as many people as they originally thought they would.
    - whatok 8y ago
      Yes, that's correct. No tax break is structured as a check that just shows up. They're usually contingent on meeting hiring thresholds or tenure. Amazon's tax breaks were going to be by head over several years.
      - addicted 8y ago
        Significant parts of the Wisconsin Foxconn deal were structured that way (such as development of infrastructure, etc). The Amazon deal only benefits Amazon if they put money in, AFAICT. The government isnt on the hook to build anything for them. They get tax breaks on property and income taxes.
awakeasleep 8y ago
I wonder what he could actually mean by this quote, unless it's an outright fabrication. NY, home of NYC, struggles to attract 100 person businesses? How am I supposed to interpret that claim?
- x1798DE 8y ago
  I wouldn't be surprised if it's true for parts of New York other than NYC. New York is a very high-tax and regulation-heavy state. NYC is a big enough draw to overcome that, but I don't think Buffalo is similarly attractive just because NYC is in the same state.
  - j-c-hewitt 8y ago
    The way the sham works is to give the companies tax breaks and regulatory easements and then to shunt the costs onto the employees. The employees bear the NYS taxes and the companies connected enough to get exceptions reap the competitive benefits.
- nickv 8y ago
  NYS != NYC. I imagine it's hard to get a 100 person business to move to Syracuse or Rochester nowadays.

mattbuilds 8y ago

I can't even try and take an article like this seriously. I understand it says in the article that Jeff Bezos owns the WaPo, but the way it's written sounds like Amazon trying to make a threat. Just look at the way the article starts off. > Amazon.com is reconsidering its plan to bring 25,000 jobs to a new campus in New York City following a wave of opposition from local politicians, according to two people familiar with the company's thinking. Amazon isn't considering bringing 25,000 jobs to NYC out of the goodness in their heart. It's a business play where they are doing what they think is most profitable for them. They want to be in NYC because it's the largest market in the US. I think their plan all along was to come to NYC. They just thought they could stage this elaborate "pick my city" nonsense and get a bunch of tax breaks. This article just sounds like them whining that people caught on.

teh_infallible 8y ago
I also like how all opposition is attributed to “politicians,” as if the public were begging for Amazon to come to New York.
- throwawaysea 8y ago
  Per this poll from 2 days ago, 69% of the public approves of HQ2 coming to NY, with support across all demographic groups. https://harrisx.com/2019/02/new-poll-shows-overwhelming-support-among-new-yorkers-and-queens-residents-for-amazons-new-headquarters/ https://harrisx.com/2019/02/new-poll-shows-overwhelming-supp... ------ Other key findings from the poll include: 85% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will create good jobs for New Yorkers and Queens residents 77% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will improve the economy of New York City 70% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will raise New York City property values 68% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will help make New York City an East Coast tech hub 58% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will raise the tax revenues New York needs for education, transportation, and other vital services 55% of New York voters believe that its very or somewhat likely that Amazon’s HQ2 will create new opportunities for local and small businesses

btown 8y ago

Cached link: https://outline.com/4qM8rZ https://outline.com/4qM8rZ

Nelkins 8y ago

As someone who lives in Long Island City, the opposition to HQ2 seems mostly coming from a vocal minority. Sure, most people are not in favor of the tax breaks, but they're also primarily in favor of Amazon coming in general[0]. There is so much misinformation about these tax breaks...so many people are saying, "We're spending $3 billion! This is unconscionable!" without understanding that NYC isn't actually going to be cutting a check to Amazon and tax revenues will almost certainly be net positive as a result. Really, the political posturing about this is bonkers. The local council member, Jimmy Van Bramer, now says he is allegedly against this deal[1]. Here's his signature on a letter in favor of the deal just about a year prior[2]. In my mind, the biggest problem is where we're going to put all these people. I really hope (but am not holding my breath) that our local pols have the courage to vote in favor of upzoning large swaths of the area to provide enough housing for everyone. Otherwise the most vulnerable among us will just get pushed further to the fringes. I'm against tax breaks for special interests, as I think it is a prime example of crony capitalism. I'm disappointed that Cuomo and DeBlasio offered any argument besides "NYC is a dynamic city with a great talent pool and halfway decent infrastructure for US cities." But the amount of fear-mongering, inconsistencies, and falsehoods swirling around HQ2 really irritate me. [0] https://poll.qu.edu/new-york-city/release-detail?ReleaseID=2589 https://poll.qu.edu/new-york-city/release-detail?ReleaseID=2... [1] https://twitter.com/JimmyVanBramer/status/1093172791686377472 https://twitter.com/JimmyVanBramer/status/109317279168637747... [2] https://docs.google.com/viewerng/viewer?url=https://big.assets.huffingtonpost.com/athena/files/2018/11/13/5beb0912e4b0caeec2beaa08.pdf https://docs.google.com/viewerng/viewer?url=https://big.asse...

specialp 8y ago
Yes it probably will end up net benefit for NYC but in any deal you have to ask did we overpay? Google bought 111 8th avenue, one of the biggest buildings in area in NYC, and also the premier datacenter location for 1.8 billion and added a lot of employees. Tax break: 0. Facebook and other large tech companies have also been expanding their staff in NYC for no tax break. NIMBYs aside in the local area I am for Amazon coming to NYC along with any other company. NYC is in effect cutting a check to them because now they are losing revenue, and starting a precedent that was previously not needed to get big companies here. The market conditions of NYC have attracted business just fine.

FakeComments 8y ago

I think the objection comes from perspective, more than anything: What sounds like a Day 1 company? - Build a second HQ where there can actually be meaningful development, like Raleigh. - Build two satellite offices in the most cozy-up-to-establishment choices possible, NYC and DC. Couple in the questionable deal making around choosing NYC, and it’s clear where the frustration comes from: we want to see the same strength of character leading Amazon as standing up to AMI. The Day 2 satellites aren’t that, for a number of reasons.

murph-almighty 8y ago
This is a pretty solid capture of my feelings about this. It is downright weird to swing from "Amazon chose this place for money" to "Amazon's CEO is standing up to (possibly) international cyberbullies" in the space of spending like 20 minutes on HN. It's the disparate decision making processes that are throwing me for a whirl more than anything.

gnicholas 8y ago

> the world’s most valuable company, led by its richest man AAPL ($801B) reclaimed this mantle recently; AMZN ($775B) is back to #2. EDIT: why the downvotes? I'm not saying the sentiment is wrong, but it doesn't look good for a news organization to get something like this wrong, especially when they are owned by the CEO of the company that they are misreporting on. It also tends to corroborate the pro-Amazon reporting bias that others have expressed here.

ratling 8y ago
Amazon is essentially Walmart for people who can use the internet. I'd bet harder on them long term (though Apple isn't going anywhere).
jasallen 8y ago
MSFT at $805B ;-) (disclosure, my employer, etc)
- gnicholas 8y ago
  Touché. So Amazon is 3rd, unless someone else wants to jump in.
  - joejerryronnie 8y ago
    And after the divorce, Bezos won't be the world's richest man anymore. I wonder if Bill just so happened to leak some compromising info to regain the title!

vincentmarle 8y ago

Sounds like this HQ2 thing is becoming a complexifier for Bezos

dajohnson89 8y ago
:-) It makes you wonder -- had they not staged this whole HQ2 fiasco and just chose a city and moved there (you know, like companies normally do...) -- would the move to NYC be more widely accepted?
- addicted 8y ago
  Yes. Google plans on adding more people to NYC than Amazon does. They just didn't make a huge hue and cry about it, and have faced almost no opposition.
  - gipp 8y ago
    It's not more people (6-8k I believe) but your point stands

40acres 8y ago

Fat chance of happening, but it would be interesting to see a 2020 candidate run on the promise of convincing Amazon to put HQ 2 1/2 in a swing state.

murph-almighty 8y ago
Put it in a district just outside of Pittsburgh with cheap housing, and there goes PA.

blocked_again 8y ago

Amazon should build their head quarters in Bangalore. Plenty of tech talent, very low cost of living compared to USA, and no shitty visa policies. Not to mention the 1.3 billion population of India which will soon sky rocket to 1.5 billion making it one of the biggest economies in the world. I guess even Canada would be a better option because of their good immigration policies.

moate 8y ago
1- This is boldly assuming they're trying to bring in immigrants. They likely will, but they're also not nearly as concerned about getting those people visas because if you can't get a visa, they can just select from other elite candidates who can. 2- There's also plenty of bad things about Bangalore, like the fact that the infrastructure isn't nearly as established as NYC. 3- NYC offers immediate proximity to one of the nerve centers of global commerce. There are hundreds of major multinationals based there, and that proximity is valuable. 4- The US has the 3rd largest population behind China/India, so it's not like they're lacking in bodies to fill roles. The size of the population and the size of the economy aren't the same thing (India's GDP is currently 1/10th of the US's, despite having more humans living there).
- blocked_again 8y ago
  1 - My idea of a starting headquarters in a country which dont have much VISA issues was to help hire more diverse pool of candidates which is not limited to the US citizens/people studied in USA.They can also do internal company transfers but these things are mostly for people who are really good at politics or that is what I heard. 2 - Yup. But people from India and Indian subcontinent are used to these things. 3 - I mean Amazon already have a US headquarters. 4 - Yup. Indian economy is currently lagging behind USA. But its still a huge economy. Maybe Amazons 2nd biggest userbase after USA and its heavily growing.

untog 8y ago

If this happens (and I'm not all convinced it will, I think this is just Amazon posturing) then Cuomo, De Blasio and Amazon will have no-one but themselves to blame for it. The secrecy around bids for HQ2 was already a joke, but the announcement for NYC even more so: De Blasio and Cuomo basically just announced that it was happening whether people liked it or not. Then said they were going to do an end-run around the NYC city council to ensure it does. Some of the objections to Amazon moving to Queens are legitimate and some are not, but you can't blame residents for freaking out when a huge, huge change like this is just dumped on their neighborhoods with zero consultation or warning. (It should also be noted that the timing of this is probably not coincidental. An outspoken critic of the Amazon deal has been nominated to the state's Public Authorities Control Board, which has to approve of the deal. But he hasn't been confirmed yet, so I suspect this is an attempt on Amazon's part to stop that approval: https://www.nytimes.com/2019/02/05/nyregion/michael-gianaris-amazon.html https://www.nytimes.com/2019/02/05/nyregion/michael-gianaris...)

jlangenauer 8y ago
It’s worth noting that government placement of massive economic projects over the desires or even well-being of local people is a feature of Soviet and modern day Chinese economic systems. And so it seems, American capitalism as well.
- untog 8y ago
  I will say that I think there is a balance. NIMBYs hold back large-scale development in a lot of area where it would be very sensible (high density housing in SF, for example). But at the same time, the community ought to have a say in a giant change like Amazon coming to town.
  - wbl 8y ago
    Who is "the community"?
    - subpixel 8y ago

syntaxing 8y ago

Personally, I would like to work at this new "HQ2" but the political rhetoric is pretty interesting to follow. Giving so much tax credit and incentive doesn't really make sense to me (and not just this deal to Amazon, the deal to Foxconn is even more baffling). $2.2 Billion for 25000 jobs is about $88000/job. That is a lot of tax money we're using up. On top of this, Long Island is a pretty occupationally diverse area to begin with. 25000 is a lot of jobs, but not make or break amount for Long Island that everyone is making it seem to be.

hessproject 8y ago
Worth noting for people unfamiliar: Long Island City is a neighborhood in Queens, a borough of NYC. While both Brooklyn and Queens are both technically on the physical island of Long Island, "Long Island" generally refers to Nassau County and the areas to the east.

Animats 8y ago

Amazon is just whining because NYC won't cut them a sweetheart deal. There's nothing stopping them from just buying or renting office space like everybody else.

quxbar 8y ago

One part I don't see people is explaining: are the NYC tax breaks amazon is getting out of line for the revenue they're bringing in? Cuomo is touting a 9-to-1 and that seems like a pretty sweet deal even if they're somewhat fudging the numbers.

moate 8y ago
Out of line with previous deals. Look at what wasn't offered to Google when they bought/built their office
- quxbar 8y ago
  Google is one data point, I'm asking what the average/distribution is. Do banks get more? I can find some examples that point to this being normal: https://subsidytracker.goodjobsfirst.org/subsidy-tracker/ny-chase-manhattan-now-jpmorgan-chase https://subsidytracker.goodjobsfirst.org/subsidy-tracker/ny-...
  - vdnkh 8y ago
    That's a great source, and directly counters the "nobody else got subsidies" argument: Subsidies for NYS: Subsidy Total: $34,026,482,575 Number of Awards: 127,154 Earliest year of data: 1980
- zjaffee 8y ago
  This is an unfair comparison, Amazon would've put HQ2 in Manhattan if they didn't get the tax deal. The tax break is specifically for bringing jobs to long island city.
yanniesaurus 8y ago
Echo your question. I would note that it seems that the tax breaks weren't negotiated as some special package for Amazon specifically -- actually, most of the incentives (or about $1.5B) are coming from existing programs run by NY state and NYC that reward companies based on square footage of office space created and number of jobs created. So, arguably, Amazon would have gotten those incentives anyway even if they had moved to NYC without all the fanfare of the HQ2 process. https://www.cnbc.com/2018/11/13/amazon-tax-incentives-in-new-york-city-virginia-and-nashville.html https://www.cnbc.com/2018/11/13/amazon-tax-incentives-in-new...

throwaway875u58 8y ago

Can amazon reconsider the Crystal City site too?

skookumchuck 8y ago

Ironically, the low-income community opposes high paying jobs coming to the neighborhood.

kryptogeist 8y ago
Sorry if I missed your point, but I fail to understand the irony here. As far as I can tell, their concern is reasonable if you take in account that a new influx o high paid employees might drive real state prices up (which in fact could benefit some people) making rents skyrocket.
- skookumchuck 8y ago
  First off, some of those jobs will be available to them. Secondly, having high paid people around patronizing the other businesses in the area will help them and their employees and families. All you need to do is look at communities across America where the big good-paying employer folded up and left town. It's a disaster for those communities, not a boon.

sonnyblarney 8y ago

"We want jobs" "But we don't want clean, high paying high-tech information worker jobs!" Nobody is suggesting the HQ2 NYC move it out of the goodness of anyone's heart, and massive tax incentives are probably questionable. But 'jobs' are the ultimate path to some kind of opportunity for people, and the best tool against 'inequality' because it enables a much more fair distribution of surpluses than arbitrary distribution. This 'anti Amazon NYC' thing is making the classical socialist look really, really bad. If there are thoughtful changes to the program, great. But otherwise, this is effectively as good as it is going to get.

throwawaysea 8y ago

I see comments bringing up comparisons between Amazon and other NYC employers who are not asking for- or getting a tax break. But I think that comparison doesn't mean much on its own... The deal with Amazon is independent of what decisions other companies make. Other companies may have different circumstances - with respect to financials (e.g. profit margins), growth prospects, etc. Or maybe they are just bad at negotiating. But either way, all the government has to do is evaluate the incremental tradeoffs associated with making _this_ deal - is it a net benefit or not? And both parties (NY or Amazon) can make their evaluations and accept or decline accordingly. Most negotiations take place with imperfect information and involve complex assessments of the risks and tradeoffs of accepting/declining any deal. In this case, the projected 9:1 ROI on the subsidies was too good to pass up and public leaders made a decision that is probably correct. I think the general public understanding of these subsidies is also very limited, and the vocal minorities that have ruled the airwaves on this issue have painted a false picture of how the subsidies are structured. https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de-blasio-announce-amazon-selects-long-island-city-new-corporate https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de... First, note that $1.2B of the $1.7B of state benefits in this deal are from the _existing_ Excelsior program. Numerous other employers are eligible to apply. See details of program at https://esd.ny.gov/excelsior-jobs-program https://esd.ny.gov/excelsior-jobs-program Many other companies have utilized this program. Take a look at this subsidy tracker: https://projects.propublica.org/subsidies/programs/excelsior-jobs-program https://projects.propublica.org/subsidies/programs/excelsior... Note that other parts of the Amazon HQ2 deal in NY are also pre-existing: > Under pre-existing as-of-right programs authorized by law, Amazon is eligible for a partial property tax abatement through ICAP and an annual credit of $3,000 for twelve years per eligible employee under REAP, a program available to all companies to encourage job growth outside of Manhattan. REAP benefits for Amazon's 10-year expansion are projected at $897 million through 2038, and ICAP will abate approximately $386 million. Chances are, Google and Facebook and others are also going to take advantage of all these generally-available programs. As far as I can tell, the $505M capital grant from the state is the only Amazon-specific part of the deal.

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srkmno 8y ago

Silly communists and NIMBY folk are going to take away the opportunity of a lifetime from people who actually work for a living.

linkingday 8y ago
How exactly is Amazon's second HQ going to give the general populace of New York (wait, sorry, only those "work for a living") the opportunity of a lifetime?
- srkmno 8y ago
  Anyone hawking wares and/or services in the vicinity of that place will prosper.

ggggtez 8y ago

I'm amazed it took three WaPo journalists and this still comes off as a biased screed that could have come from the mouth of Bezos himself. I mean, casually referencing Bezos as "the worlds richest man" instead of calling him by name or title? Come on.

credit_guy 8y ago

If HQ2 falls through, the history will remember the politicians who were opposed to this as it remembers the board of Yahoo after it rejected the $50BN offer from Microsoft: yes, high five all around right after you kill the deal, but then you are the loser of the century. 25000 jobs at an average of $150k/year. State income tax is 8.8%, city income tax 3.8%, state sales tax 4%, city sales tax 4%, property taxes, etc. You easily take back in taxes 30k/year from each employee. That's 3/4 billion per year. But then wage inflation in the whole tech sector, let's say 3% per year for a few years, for 100k employees, that's about $100MM/year. Then the real estate appreciation. We are talking millions of condos/coops going up in value. Not a lot, but a little bit everywhere adds up. In NYC every apartment sale over $1MM is subject to a 1% "mansion tax". You would see tens of thousands of apartments changing hands. That's hundreds of millions of additional tax revenue right there. Well, I guess Boston is a nice city too...

Gabriel_Martin 8y ago
As a Bostonian, I don't think our housing or transit can take it. I'll happily defer.
alex504 8y ago
Nobody informed is opposed to it because of the finances. People just don't understand why we would want so many more people when gentrification and overcrowding are already making life harder for everyone in the city. If 25000 people with jobs at over 150k a year decided to leave and go to Boston, personally I would be excited. A few things taxes can't seem to buy are lower rents and a public transportation system that isn't completely overcrowded.
gorbachev 8y ago
New York will be just fine without these jobs. 25K additional jobs in New York is like a bee's fart. It would be much better for the headquarters to be located in region where 25K additional jobs wouldn't be a bee's fart. In a region like that Amazon could actually make a difference to the economic growth of the area.