7 ms·

Amazon HQ2 was supposed to add jobs last year. It shed them instead

120 points by fckgw 3y ago

paxys 3y ago
I still remember the circus around HQ2 and how so many politicians (most prominently AOC) were dragged in the media and online forums for not bowing down to Amazon and being "anti jobs". Since then Amazon has leased a ton of office space in NYC (including a large chunk of Hudson Yards, which is the priciest new development) and is expanding its presence in the city, all without the $6B+ in subsidies that Virginia and other states/cities across the country promised them. Funny how that works.
- munk-a 3y ago
  Businesses need to operate somewhere - if local governments stand strong we all win. If your local government caves to the wave of lobbying cocktail parties and PAC money injection, please vote them out. The costs we levy on businesses to operate in the US are extremely affordable and fair - giving them further discounts and rebates does nothing but enrich investors.
  - LightBug1 3y ago
    There is no 'stand strong' when the federal system encourages competition. Maybe that's a good thing. But specifically not with regards to state subsidies. They shouldn't be competed away at the demands of business, but used with purpose. Subsidies (or anything which quacks like a subsidy) should be regulated so this nonsense doesn't happen.
    - munk-a 3y ago
      I agree entirely - these sorts of subsidies can be extremely effective at uplifting job markets by, as an example, attracting a large company to build a manufacturing plant in a specific rural area that recently lost their main employer... To NYC even something as large as HQ2 is just a drop in the employment bucket.
    - paxys 3y ago
      Yup. It's crazy that you can be a business operating in a certain jurisdiction and following all the rules and the government can just decide (based on backroom deals) that your biggest competitor now needs to pay no taxes. Literally legalized corruption. At minimum all such policies need to apply uniformly across the board.
    - SrslyJosh 3y ago
      > Subsidies (or anything which quacks like a subsidy) should be regulated so this nonsense doesn't happen. 1000x this. Every news story about these subsidies eventually becomes "we gave BigCorp a $5 billion tax break and they opened a facility that employs 50 people."
  - oldpersonintx 3y ago
    [dead]
  - ueahoknof 3y ago
    [flagged]
  - hahajhiggg 3y ago
    [dead]
  - fullshark 3y ago
    I can't vote anyone out, just ignoring all of this remains the optimal strategy for my own sanity.
  - Ajay-p 3y ago
    ..And theoretically that somewhere could be anywhere, even outside of the country.
  - deleted 3y ago
    [deleted]
  - stale2002 3y ago
    > If your local government caves The local community actually wins. Sure, its easy for people in NYC and San Francisco to say that nobody should compete for any of these jobs. They are going to get them anyway. But the moment some other location tries to compete for that economic benefit, well now all of a sudden "their" jobs are being stolen by undeserving locations.
  - akavi 3y ago
    It's a shame that along with the clause against bills of attainder, banning laws that are intended to solely harm a specific individual or group of individuals, the constitution didn't also ban bills of... abtainder (?) banning laws that are intended to solely _benefit_ a specific individual or groups of individuals. Would be the best antidote to this sort of thing, but is probably untenable to amend at this point.
  - CSMastermind 3y ago
    > Businesses need to operate somewhere - if local governments stand strong we all win. This is how you end up with the Rust Belt.
    - nebula8804 3y ago
      >This is how you end up with the Rust Belt. The Rust Belt is proof positive of Big Business operating in a unrestrained environment. NAFTA, the move to China, and its ilk are a direct consequence of federal government overriding the will of the people. If there was any actual power at the local level any imports the got shipped overseas would have been slapped with tariffs. You shouldn't get unrestrained access to the largest market in the west while also ignoring the external costs.
- spamizbad 3y ago
  What's funny is she (and many other critics) specifically called out that all it would take is a single bad quarters for all those HQ jobs to evaporate and they were right.
  - nine_zeros 3y ago
    Corporate tax benefits should be tied to the number of payroll they have in that location in the quarter.
    - Aunche 3y ago
      From I understand, this is already the case for all these sort of incentive.
      - knallfrosch 3y ago
        It's mentioned in the article, even with exact numbers. What's the point of discussing this, when people don't read?
    - SrslyJosh 3y ago
      Corporate tax benefits shouldn't exist. The ones that make the news seem to be a corrupt bargain between corporations (which get huge tax breaks that the locality offering them will never recoup) and politicians (who get to campaign on "bringing jobs" or whatever while happily emptying the public coffers to make it happen).
  - TuringNYC 3y ago
    >> What's funny is she (and many other critics) specifically called out that all it would take is a single bad quarters for all those HQ jobs to evaporate and they were right. Could you elaborate on the argument here -- are you suggesting that if a job has a potential for future loss, it is just better to not create the job at all? If I was mayor, i'd be happy to take a high-paying job in my locality even if it isn't perpetual. The key would be to tie incentives to actual payroll. Subsidy disappears as soon as the job disappears. But guaranteeing perpetual jobs is something no organization can do, not even governments.
- TuringNYC 3y ago
  >> Since then Amazon has leased a ton of office space in NYC (including a large chunk of Hudson Yards, which is the priciest new development) and is expanding its presence in the city, all without the $6B+ in subsidies that Virginia and other states/cities across the country promised them. Funny how that works. I want to be fair here -- HQ2 was being discussed before the pandemic when office space was at a premium. We are now post-pandemic, where office space in major cities sit empty, languishing, and sometimes entire buildings going bankrupt with no equity value left. Of course Amazon is able to easily rent tons of office space in NYC _now_.
  - paxys 3y ago
    The expansion happened in 2019 (https://www.cnbc.com/2019/12/09/amazon-to-lease-space-in-manhattan-less-than-a-year-after-hq2-fallout.html https://www.cnbc.com/2019/12/09/amazon-to-lease-space-in-man...).
  - BoiledCabbage 3y ago
    > I want to be fair here -- HQ2 was being discussed before the pandemic when office space was at a premium. Which if office space was at a premium, then that means there was way more demand then there was supply. Meaning there is no reason to be paying people to move into this premium, high-in-demand product. All the more proof that her and others saying the same thing were correct.
    - TuringNYC 3y ago
      >> Which if office space was at a premium, then that means there was way more demand then there was supply. Meaning more people want it than the amount available. Meaning there is no reason to be paying people to get this premium high in demand product. All the more reason that her and others saying the same thing were correct. The argument was the subsidies were going to be to build new office space in Long Island City in Queens, where there weren't many jobs. As a former Brooklyner, this seemed like a huge positive to me. Imagine not having to move to the West Coast for FAANG jobs! (Obviously this has substantially changed with the pandemic and FAANG jobs distributing across the coasts post pandemic)
- woooooo 3y ago
  Amazon needs NYC more than NYC needs Amazon. Amazing that so many supply-and-demand aficionados couldn't see that.
- aetherson 3y ago
  I mean, it's not like NYC didn't give Amazon tax credits for their recent expansions in NYC. For example: https://news.bloombergtax.com/daily-tax-report/amazon-gets-124-million-tax-break-for-new-york-warehouse https://news.bloombergtax.com/daily-tax-report/amazon-gets-1... And it's not like Amazon has brought nearly as many jobs to NYC as they planned to with HQ2. This isn't necessarily to say that the calculus was wrong here -- New York is perhaps uniquely a place that doesn't really need a huge influx of Amazon jobs. But I think a lot of people misunderstood the HQ2 process as like "this was a unique and rare situation in which a local government applied tax incentives to get a corporation to open a major facility there." It wasn't. That's very routine. What was unique and rare about the HQ2 process was how public it was.
  - paxys 3y ago
    NY != NYC
- bottle_roket 3y ago
  Yeah NYC doesn’t need to offer subsidies because it already has what Amazon wants, lots of highly educated young people who want to work in tech. Most places don’t already have that (or at least not enough of it) and so it could make sense to offer short term subsidies in exchange for long term industry presence.
- ch4s3 3y ago
  > politicians (most prominently AOC) were dragged The poor people living in public housing around LIC overwhelmingly favored the project which was going to bring new public spaces, upgrades to schools, and affordable housing. None of that got built and instead the new office lease happened in Hudson Yards where none of the poor LIC residents will benefit at all. She similarly helped kill a redevelopment in Industry City that included a bunch of affordable housing and light manufacturing jobs. Those jobs didn't go somewhere else in the city.
  - CalChris 3y ago
    Long Island City is doing just fine. https://archive.is/gRA45 https://archive.is/gRA45
    - paxys 3y ago
      It's funny how the biggest complaint from residents of Long Island, Astoria, Downtown Brooklyn, Williamsburg etc. is that their neighborhoods are getting gentrified and unaffordable, and on the other end politicians argue that big corporations need to be paid billions of dollars in incentives to come "save" them.
    - ch4s3 3y ago
      No one is saying that real estate development is suffering. I pointed out correctly that the original proposal included investment in public amenities and schools that aren't happening.
      - CalChris 3y ago
        You sure about that? https://patch.com/new-york/astoria-long-island-city/long-awaited-new-lic-school-be-built-near-court-square-city-says https://patch.com/new-york/astoria-long-island-city/long-awa...
        ch4s3 3y ago
        To my knowledge and based on some additional searching, that old office building is still sitting there and construction hasn't started.
- atsmyles 3y ago
  The subsidy was not to bring Amazon to Manhattan, it was to bring Amazon to Queens. The only reasonable places to commute to it is if you lived in NYC or Long Island, so most of the subsidy would have been paid back via taxes by the people working there. This doesn't include the construction jobs, restaurant and bar businesses, and real estate taxes that would be collected in the long term after the subsidy expired. I do agree that AOC represented NJ, Connecticut, and Amazon's long term interests very well. Her district, not so much.
  - nebula8804 3y ago
    > I do agree that AOC represented NJ, Connecticut, and Amazon's long term interests very well. Her district, not so much. If you consider the fact that even before the deal fell apart people began buying up swaths of real estate in the area in preparation of pushing out her current constituents then I think she made the right move. Her people are the blue collar workers of the district. The previous rep who was the Democrats top connection to Wall Street didn't even live in the district. he lived in Virginia :talk about not representing their interests.
- vineyardmike 3y ago
  I was working for Amazon at the time, and lived in Boston. Everyone thought (naively?) that Boston was going to “win” - until Bezos bought a fancy mansion in DC. It was quite embarrassing to watch even still. I’m still proud of our local government for publicly publishing their proposal, and not offering any major concessions. The proposal was basically “we have what you want, so come get it, we’re not gunna pay you”.
  - ghaff 3y ago
    As I recall, the Boston location (Suffolk Downs) would not have been what the typical Amazon HQ worker would have envisioned as being in Boston. OK, there's some public transit but you're basically in a largely blue collar area north of the city. (So somewhat like the NYC proposal in that respect.)
- shmatt 3y ago
  It was even dumber than that. AOC is a federal representative that gave her personal opinion. She has no say on local laws, she can oppose 100% of the laws Mayor Adams and Governor Hochul sign, it doesn't mean they get cancelled, it just means she has a right to her opinion. The local board that rejected Amazon had a separate set of members that decided to vote however they voted. They are also up for election completely independently, so they would have paid the price if locals disagreed with them (maybe they did, I didnt check)
- SpaceManNabs 3y ago
  AOC was right, like she usually is. Regarless, she didn't have any decision making power in this case, only soft power.
- wnevets 3y ago
  The dumbest part of that circus is that NYC is probably the last city in the US that needs to "encourage" companies to open up shop and use its real estate.
- listenallyall 3y ago
  Hudson Yards itself received $6 billion in tax breaks and incentives. https://www.nytimes.com/2019/03/09/nyregion/hudson-yards-new-york-tax-breaks.html https://www.nytimes.com/2019/03/09/nyregion/hudson-yards-new... The vast majority of the proposed Amazon tax breaks were longstanding, pre-existing programs that were available to any company who fulfill the requirements. Most, like REAP and Excelsior, remain available today. https://news.ycombinator.com/item?id=19178187 https://news.ycombinator.com/item?id=19178187
throwup238 3y ago
https://archive.ph/0Tue6 https://archive.ph/0Tue6 shocked pikachu face Everyone called it when Amazon was shopping HQ2 around and NYC told them to get bent. Completely predictable. Never make incentive deals with megacorps unless it's for the film industry. They know how to scratch someone's back.
- anamax 3y ago
  > Never make incentive deals with megacorps unless it's for the film industry. They know how to scratch someone's back. What kind of "back scratching" does the film industry do and why should I like it? Speaking of "incentive deals with megacorps", how about those sports stadium deals? At least the govt officials get tickets, right?
  - riotnrrd 3y ago
    I used to work in film, although not in the accountancy/deal-making aspect. Film tax breaks are direct discounts on money spent. If you make a film in Georgia, for example, you get a transferable tax credit (20-30%) on money spent in the state. It's a short term deal (productions usually only last a few months), and is immediate in effect. There's no "spend a billion of public money and maybe we'll hire some people" shenanigans like the Foxconn plant in Wisconsin.
    - jtgverde 3y ago
      I have friends who work in film and have heard about the way the productions play fast and loose with "local hires" that then get reported as jobs created. But setting aside all of that research shows little to no impact https://www.nber.org/papers/w25963 https://www.nber.org/papers/w25963 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3155407 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3155407 The prestige of films being made in their state keep the subsidies rolling in but there are many great "bang for your buck" subsidies states could be making that just aren't sexy.
      - mschuster91 3y ago
rdudek 3y ago
Does that mean the city/county/state can go after them?
- TheSoftwareGuy 3y ago
  The incentives were tied to the job creation. So if they bring fewer jobs to the area, they get less money from the government, automatically. It was part of the contract
- mandevil 3y ago
  No, but it does mean that AMZN almost certainly won't get any taxpayer money for this checkpoint(the payments are spread out, but for the jobs of several years ago- they can be paid until late 2026 based off their paperwork filed in back in April 2023, etc.). They didn't even ask for any, actually- they filed a "Progress Report" rather than a formal application for taxpayer money. This is the first time they missed on the hiring numbers agreed to- up until this report they had always been ahead of the agreed upon hiring schedule.
- knallfrosch 3y ago
  Read the article first please.
hahajhiggg 3y ago
[flagged]
coolbreezetft24 3y ago
Totally forgot about HQ2 - is it even anywhere close to the size of Seattle HQ at this point?
- andrewxdiamond 3y ago
  Hq2 itself is about twice the size of the large HQ1 buildings (re:invent, Doppler) but it’s only one(ish) building. Amazon owns like 35% of Seattle downtown real estate
  - schainks 3y ago
    No matter the number, it is currently shrinking: https://news.theregistryps.com/amazon-opts-not-to-renew-209000-sqft-lease-in-seattle/ https://news.theregistryps.com/amazon-opts-not-to-renew-2090..., https://www.businessinsider.com/amazon-expects-save-1-3-billion-slashing-office-vacancies-2024-3 https://www.businessinsider.com/amazon-expects-save-1-3-bill...
    - psunavy03 3y ago
      Seattle proper != King County. Amazon is building out big across the lake in Bellevue. It's Seattle's local municipal government that's gone rabidly anti-business more than the county or state as a whole, although Washington is never going to be confused with a purple state anymore after the last 5-10 years. Amazon is not the only F500 to be divesting headcount within Seattle city limits in favor of elsewhere in the metro area.
WoahNoun 3y ago
>Its application last April said the company had hired 6,939 employees for qualifying jobs, out of 8,000 total positions in Arlington. Amazon’s report this year said it had filled 6,644 qualifying jobs and had 7,791 total employees assigned to HQ2. >Virginia’s incentives for the company are supposed to reward its progress toward a goal of bringing 25,000 new jobs to Arlington by 2030. They are also structured to ensure that the company maintains those new jobs for at least five years. They have 6 years to fill ~20,000 jobs. Seems pretty doable once they scale up hiring again.
jimkleiber 3y ago
I hope one day we realize businesses tend to care more about increasing profits than increasing jobs...and that sometimes the easiest way to increase profits is to decrease jobs. I think we in society really need to evaluate this...maybe instead of forcing companies to create jobs, we can think of another way for humans to have money. Some humans make money not from working a job but from ownership, getting dividends from that. What if we could change the way we do or view ownership and people get dividends from that? Haha, maybe I'm just reinventing the stock market, but not all stocks give dividends. Maybe instead of asking companies to create jobs, we should ask them to give more dividends? I'm curious to hear your thoughts to this dilemma of us asking conpanies to create jobs and how that might make them less efficient.
- citizenpaul 3y ago
  >ask them to give more dividends? One of the biggest reasons for layoffs is investor pressure to increase shareholder value. You basically already have to be rich(maybe not HN rich) for dividends to have any real difference in your life. You have to be fantastically rich for your dividend ownership to have any influence on the company.
  - jimkleiber 3y ago
    At the current level and concept of dividends, yes. I guess I was just thinking more broadly on the idea of profit sharing, maybe it involves changing the way we look at ownership. Alaska has a permanent fund that receives money I think from oil and pays each if its citizens a part of that money. In my view, that's as if each Alaskan citizen "owns" a part of the oil industry there and received profit sharing. I think something similar might happen in the UAE. So I'm curious what a different concept of dividend/profit sharing might look like where it can help those who aren't the medium or super rich.
    - nateglims 3y ago
      Companies used to sometimes offer direct profit sharing. Stocks became a preferable vehicle over time. For an alternative model, worker coops would be the most straight forward.
debacle 3y ago
As a New Yorker, these "subsidies for jobs" programs never work. Yet we keep doing them. The last time I ran the numbers, NYS was paying Tesla/Panasonic 110k per year per job, yet the jobs only paid 45k.
- marcod 3y ago
  Unless you get guarantees in a contract which Amazon would never give :p
- TheCoelacanth 3y ago
  This one is working out fine for VA since they don't have to pay anything now.
cryptoxchange 3y ago
I know of multiple teams where 50% of the team were nominally HQ2/Virginia employees and 50% were distributed around the country last spring. Folks on these teams speculated that the Return To Hub push was specifically thought of to meet HQ2 incentives. None of the distributed employees ended up in Virginia. They all found local teams internally or left Amazon. When high performer leaves a team it’s common for others to leave since it breaks the ice. Lots of these teams then lost local talent to companies with less strict in-office requirements. Markets are gonna communicate information whether you like it or not.
michaelcampbell 3y ago
While it might sound overly cynical, and it probably is, you can place a pretty good even odds bet on "whatever a corporation says to get governmental favor will happen in the opposite direction". Double your stake if that favor is "a tax break"
AdmiralAsshat 3y ago
So glad Amazon picked Virginia to announce their HQ2, causing the already-unsustainable price of housing in NoVA to skyrocket even further.
Finnucane 3y ago
Still a better deal than Wisconsin got out of Foxconn.
pbronez 3y ago
As a local resident, I’m quite pleased with the whole thing. The incentives are gated by actual performance… if Amazon doesn’t do stuff, we don’t pay. In the meantime, lots of incentives were in-kind infrastructure improvements that we really needed to do anyway. What Amazon has already built is nice and fits in with the neighborhood. Really it’s all a tempest in a teapot.
sharts 3y ago
And there is 0 accountability for misleading marketing claims and the people that supported it.

120 points by fckgw 3y ago

I still remember the circus around HQ2 and how so many politicians (most prominently AOC) were dragged in the media and online forums for not bowing down to Amazon and being "anti jobs". Since then Amazon has leased a ton of office space in NYC (including a large chunk of Hudson Yards, which is the priciest new development) and is expanding its presence in the city, all without the $6B+ in subsidies that Virginia and other states/cities across the country promised them. Funny how that works.

munk-a 3y ago
Businesses need to operate somewhere - if local governments stand strong we all win. If your local government caves to the wave of lobbying cocktail parties and PAC money injection, please vote them out. The costs we levy on businesses to operate in the US are extremely affordable and fair - giving them further discounts and rebates does nothing but enrich investors.
- LightBug1 3y ago
  There is no 'stand strong' when the federal system encourages competition. Maybe that's a good thing. But specifically not with regards to state subsidies. They shouldn't be competed away at the demands of business, but used with purpose. Subsidies (or anything which quacks like a subsidy) should be regulated so this nonsense doesn't happen.
  - munk-a 3y ago
    I agree entirely - these sorts of subsidies can be extremely effective at uplifting job markets by, as an example, attracting a large company to build a manufacturing plant in a specific rural area that recently lost their main employer... To NYC even something as large as HQ2 is just a drop in the employment bucket.
  - paxys 3y ago
    Yup. It's crazy that you can be a business operating in a certain jurisdiction and following all the rules and the government can just decide (based on backroom deals) that your biggest competitor now needs to pay no taxes. Literally legalized corruption. At minimum all such policies need to apply uniformly across the board.
  - SrslyJosh 3y ago
    > Subsidies (or anything which quacks like a subsidy) should be regulated so this nonsense doesn't happen. 1000x this. Every news story about these subsidies eventually becomes "we gave BigCorp a $5 billion tax break and they opened a facility that employs 50 people."
- oldpersonintx 3y ago
  [dead]
- ueahoknof 3y ago
  [flagged]
- hahajhiggg 3y ago
  [dead]
- fullshark 3y ago
  I can't vote anyone out, just ignoring all of this remains the optimal strategy for my own sanity.
- Ajay-p 3y ago
  ..And theoretically that somewhere could be anywhere, even outside of the country.
- deleted 3y ago
  [deleted]
- stale2002 3y ago
  > If your local government caves The local community actually wins. Sure, its easy for people in NYC and San Francisco to say that nobody should compete for any of these jobs. They are going to get them anyway. But the moment some other location tries to compete for that economic benefit, well now all of a sudden "their" jobs are being stolen by undeserving locations.
- akavi 3y ago
  It's a shame that along with the clause against bills of attainder, banning laws that are intended to solely harm a specific individual or group of individuals, the constitution didn't also ban bills of... abtainder (?) banning laws that are intended to solely _benefit_ a specific individual or groups of individuals. Would be the best antidote to this sort of thing, but is probably untenable to amend at this point.
- CSMastermind 3y ago
  > Businesses need to operate somewhere - if local governments stand strong we all win. This is how you end up with the Rust Belt.
  - nebula8804 3y ago
    >This is how you end up with the Rust Belt. The Rust Belt is proof positive of Big Business operating in a unrestrained environment. NAFTA, the move to China, and its ilk are a direct consequence of federal government overriding the will of the people. If there was any actual power at the local level any imports the got shipped overseas would have been slapped with tariffs. You shouldn't get unrestrained access to the largest market in the west while also ignoring the external costs.
spamizbad 3y ago
What's funny is she (and many other critics) specifically called out that all it would take is a single bad quarters for all those HQ jobs to evaporate and they were right.
- nine_zeros 3y ago
  Corporate tax benefits should be tied to the number of payroll they have in that location in the quarter.
  - Aunche 3y ago
    From I understand, this is already the case for all these sort of incentive.
    - knallfrosch 3y ago
      It's mentioned in the article, even with exact numbers. What's the point of discussing this, when people don't read?
  - SrslyJosh 3y ago
    Corporate tax benefits shouldn't exist. The ones that make the news seem to be a corrupt bargain between corporations (which get huge tax breaks that the locality offering them will never recoup) and politicians (who get to campaign on "bringing jobs" or whatever while happily emptying the public coffers to make it happen).
- TuringNYC 3y ago
  >> What's funny is she (and many other critics) specifically called out that all it would take is a single bad quarters for all those HQ jobs to evaporate and they were right. Could you elaborate on the argument here -- are you suggesting that if a job has a potential for future loss, it is just better to not create the job at all? If I was mayor, i'd be happy to take a high-paying job in my locality even if it isn't perpetual. The key would be to tie incentives to actual payroll. Subsidy disappears as soon as the job disappears. But guaranteeing perpetual jobs is something no organization can do, not even governments.
TuringNYC 3y ago
>> Since then Amazon has leased a ton of office space in NYC (including a large chunk of Hudson Yards, which is the priciest new development) and is expanding its presence in the city, all without the $6B+ in subsidies that Virginia and other states/cities across the country promised them. Funny how that works. I want to be fair here -- HQ2 was being discussed before the pandemic when office space was at a premium. We are now post-pandemic, where office space in major cities sit empty, languishing, and sometimes entire buildings going bankrupt with no equity value left. Of course Amazon is able to easily rent tons of office space in NYC _now_.
- paxys 3y ago
  The expansion happened in 2019 (https://www.cnbc.com/2019/12/09/amazon-to-lease-space-in-manhattan-less-than-a-year-after-hq2-fallout.html https://www.cnbc.com/2019/12/09/amazon-to-lease-space-in-man...).
- BoiledCabbage 3y ago
  > I want to be fair here -- HQ2 was being discussed before the pandemic when office space was at a premium. Which if office space was at a premium, then that means there was way more demand then there was supply. Meaning there is no reason to be paying people to move into this premium, high-in-demand product. All the more proof that her and others saying the same thing were correct.
  - TuringNYC 3y ago
    >> Which if office space was at a premium, then that means there was way more demand then there was supply. Meaning more people want it than the amount available. Meaning there is no reason to be paying people to get this premium high in demand product. All the more reason that her and others saying the same thing were correct. The argument was the subsidies were going to be to build new office space in Long Island City in Queens, where there weren't many jobs. As a former Brooklyner, this seemed like a huge positive to me. Imagine not having to move to the West Coast for FAANG jobs! (Obviously this has substantially changed with the pandemic and FAANG jobs distributing across the coasts post pandemic)
woooooo 3y ago
Amazon needs NYC more than NYC needs Amazon. Amazing that so many supply-and-demand aficionados couldn't see that.
aetherson 3y ago
I mean, it's not like NYC didn't give Amazon tax credits for their recent expansions in NYC. For example: https://news.bloombergtax.com/daily-tax-report/amazon-gets-124-million-tax-break-for-new-york-warehouse https://news.bloombergtax.com/daily-tax-report/amazon-gets-1... And it's not like Amazon has brought nearly as many jobs to NYC as they planned to with HQ2. This isn't necessarily to say that the calculus was wrong here -- New York is perhaps uniquely a place that doesn't really need a huge influx of Amazon jobs. But I think a lot of people misunderstood the HQ2 process as like "this was a unique and rare situation in which a local government applied tax incentives to get a corporation to open a major facility there." It wasn't. That's very routine. What was unique and rare about the HQ2 process was how public it was.
- paxys 3y ago
  NY != NYC
bottle_roket 3y ago
Yeah NYC doesn’t need to offer subsidies because it already has what Amazon wants, lots of highly educated young people who want to work in tech. Most places don’t already have that (or at least not enough of it) and so it could make sense to offer short term subsidies in exchange for long term industry presence.
ch4s3 3y ago
> politicians (most prominently AOC) were dragged The poor people living in public housing around LIC overwhelmingly favored the project which was going to bring new public spaces, upgrades to schools, and affordable housing. None of that got built and instead the new office lease happened in Hudson Yards where none of the poor LIC residents will benefit at all. She similarly helped kill a redevelopment in Industry City that included a bunch of affordable housing and light manufacturing jobs. Those jobs didn't go somewhere else in the city.
- CalChris 3y ago
  Long Island City is doing just fine. https://archive.is/gRA45 https://archive.is/gRA45
  - paxys 3y ago
    It's funny how the biggest complaint from residents of Long Island, Astoria, Downtown Brooklyn, Williamsburg etc. is that their neighborhoods are getting gentrified and unaffordable, and on the other end politicians argue that big corporations need to be paid billions of dollars in incentives to come "save" them.
  - ch4s3 3y ago
    No one is saying that real estate development is suffering. I pointed out correctly that the original proposal included investment in public amenities and schools that aren't happening.
    - CalChris 3y ago
      You sure about that? https://patch.com/new-york/astoria-long-island-city/long-awaited-new-lic-school-be-built-near-court-square-city-says https://patch.com/new-york/astoria-long-island-city/long-awa...
      - ch4s3 3y ago
        To my knowledge and based on some additional searching, that old office building is still sitting there and construction hasn't started.
atsmyles 3y ago
The subsidy was not to bring Amazon to Manhattan, it was to bring Amazon to Queens. The only reasonable places to commute to it is if you lived in NYC or Long Island, so most of the subsidy would have been paid back via taxes by the people working there. This doesn't include the construction jobs, restaurant and bar businesses, and real estate taxes that would be collected in the long term after the subsidy expired. I do agree that AOC represented NJ, Connecticut, and Amazon's long term interests very well. Her district, not so much.
- nebula8804 3y ago
  > I do agree that AOC represented NJ, Connecticut, and Amazon's long term interests very well. Her district, not so much. If you consider the fact that even before the deal fell apart people began buying up swaths of real estate in the area in preparation of pushing out her current constituents then I think she made the right move. Her people are the blue collar workers of the district. The previous rep who was the Democrats top connection to Wall Street didn't even live in the district. he lived in Virginia :talk about not representing their interests.
vineyardmike 3y ago
I was working for Amazon at the time, and lived in Boston. Everyone thought (naively?) that Boston was going to “win” - until Bezos bought a fancy mansion in DC. It was quite embarrassing to watch even still. I’m still proud of our local government for publicly publishing their proposal, and not offering any major concessions. The proposal was basically “we have what you want, so come get it, we’re not gunna pay you”.
- ghaff 3y ago
  As I recall, the Boston location (Suffolk Downs) would not have been what the typical Amazon HQ worker would have envisioned as being in Boston. OK, there's some public transit but you're basically in a largely blue collar area north of the city. (So somewhat like the NYC proposal in that respect.)
shmatt 3y ago
It was even dumber than that. AOC is a federal representative that gave her personal opinion. She has no say on local laws, she can oppose 100% of the laws Mayor Adams and Governor Hochul sign, it doesn't mean they get cancelled, it just means she has a right to her opinion. The local board that rejected Amazon had a separate set of members that decided to vote however they voted. They are also up for election completely independently, so they would have paid the price if locals disagreed with them (maybe they did, I didnt check)
SpaceManNabs 3y ago
AOC was right, like she usually is. Regarless, she didn't have any decision making power in this case, only soft power.
wnevets 3y ago
The dumbest part of that circus is that NYC is probably the last city in the US that needs to "encourage" companies to open up shop and use its real estate.
listenallyall 3y ago
Hudson Yards itself received $6 billion in tax breaks and incentives. https://www.nytimes.com/2019/03/09/nyregion/hudson-yards-new-york-tax-breaks.html https://www.nytimes.com/2019/03/09/nyregion/hudson-yards-new... The vast majority of the proposed Amazon tax breaks were longstanding, pre-existing programs that were available to any company who fulfill the requirements. Most, like REAP and Excelsior, remain available today. https://news.ycombinator.com/item?id=19178187 https://news.ycombinator.com/item?id=19178187

throwup238 3y ago

https://archive.ph/0Tue6 https://archive.ph/0Tue6 shocked pikachu face Everyone called it when Amazon was shopping HQ2 around and NYC told them to get bent. Completely predictable. Never make incentive deals with megacorps unless it's for the film industry. They know how to scratch someone's back.

anamax 3y ago
> Never make incentive deals with megacorps unless it's for the film industry. They know how to scratch someone's back. What kind of "back scratching" does the film industry do and why should I like it? Speaking of "incentive deals with megacorps", how about those sports stadium deals? At least the govt officials get tickets, right?
- riotnrrd 3y ago
  I used to work in film, although not in the accountancy/deal-making aspect. Film tax breaks are direct discounts on money spent. If you make a film in Georgia, for example, you get a transferable tax credit (20-30%) on money spent in the state. It's a short term deal (productions usually only last a few months), and is immediate in effect. There's no "spend a billion of public money and maybe we'll hire some people" shenanigans like the Foxconn plant in Wisconsin.
  - jtgverde 3y ago
    I have friends who work in film and have heard about the way the productions play fast and loose with "local hires" that then get reported as jobs created. But setting aside all of that research shows little to no impact https://www.nber.org/papers/w25963 https://www.nber.org/papers/w25963 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3155407 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3155407 The prestige of films being made in their state keep the subsidies rolling in but there are many great "bang for your buck" subsidies states could be making that just aren't sexy.
    - mschuster91 3y ago

rdudek 3y ago

Does that mean the city/county/state can go after them?

TheSoftwareGuy 3y ago
The incentives were tied to the job creation. So if they bring fewer jobs to the area, they get less money from the government, automatically. It was part of the contract
mandevil 3y ago
No, but it does mean that AMZN almost certainly won't get any taxpayer money for this checkpoint(the payments are spread out, but for the jobs of several years ago- they can be paid until late 2026 based off their paperwork filed in back in April 2023, etc.). They didn't even ask for any, actually- they filed a "Progress Report" rather than a formal application for taxpayer money. This is the first time they missed on the hiring numbers agreed to- up until this report they had always been ahead of the agreed upon hiring schedule.
knallfrosch 3y ago
Read the article first please.

hahajhiggg 3y ago

[flagged]

coolbreezetft24 3y ago

Totally forgot about HQ2 - is it even anywhere close to the size of Seattle HQ at this point?

andrewxdiamond 3y ago
Hq2 itself is about twice the size of the large HQ1 buildings (re:invent, Doppler) but it’s only one(ish) building. Amazon owns like 35% of Seattle downtown real estate
- schainks 3y ago
  No matter the number, it is currently shrinking: https://news.theregistryps.com/amazon-opts-not-to-renew-209000-sqft-lease-in-seattle/ https://news.theregistryps.com/amazon-opts-not-to-renew-2090..., https://www.businessinsider.com/amazon-expects-save-1-3-billion-slashing-office-vacancies-2024-3 https://www.businessinsider.com/amazon-expects-save-1-3-bill...
  - psunavy03 3y ago
    Seattle proper != King County. Amazon is building out big across the lake in Bellevue. It's Seattle's local municipal government that's gone rabidly anti-business more than the county or state as a whole, although Washington is never going to be confused with a purple state anymore after the last 5-10 years. Amazon is not the only F500 to be divesting headcount within Seattle city limits in favor of elsewhere in the metro area.

WoahNoun 3y ago

>Its application last April said the company had hired 6,939 employees for qualifying jobs, out of 8,000 total positions in Arlington. Amazon’s report this year said it had filled 6,644 qualifying jobs and had 7,791 total employees assigned to HQ2. >Virginia’s incentives for the company are supposed to reward its progress toward a goal of bringing 25,000 new jobs to Arlington by 2030. They are also structured to ensure that the company maintains those new jobs for at least five years. They have 6 years to fill ~20,000 jobs. Seems pretty doable once they scale up hiring again.

jimkleiber 3y ago

I hope one day we realize businesses tend to care more about increasing profits than increasing jobs...and that sometimes the easiest way to increase profits is to decrease jobs. I think we in society really need to evaluate this...maybe instead of forcing companies to create jobs, we can think of another way for humans to have money. Some humans make money not from working a job but from ownership, getting dividends from that. What if we could change the way we do or view ownership and people get dividends from that? Haha, maybe I'm just reinventing the stock market, but not all stocks give dividends. Maybe instead of asking companies to create jobs, we should ask them to give more dividends? I'm curious to hear your thoughts to this dilemma of us asking conpanies to create jobs and how that might make them less efficient.

citizenpaul 3y ago
>ask them to give more dividends? One of the biggest reasons for layoffs is investor pressure to increase shareholder value. You basically already have to be rich(maybe not HN rich) for dividends to have any real difference in your life. You have to be fantastically rich for your dividend ownership to have any influence on the company.
- jimkleiber 3y ago
  At the current level and concept of dividends, yes. I guess I was just thinking more broadly on the idea of profit sharing, maybe it involves changing the way we look at ownership. Alaska has a permanent fund that receives money I think from oil and pays each if its citizens a part of that money. In my view, that's as if each Alaskan citizen "owns" a part of the oil industry there and received profit sharing. I think something similar might happen in the UAE. So I'm curious what a different concept of dividend/profit sharing might look like where it can help those who aren't the medium or super rich.
  - nateglims 3y ago
    Companies used to sometimes offer direct profit sharing. Stocks became a preferable vehicle over time. For an alternative model, worker coops would be the most straight forward.

debacle 3y ago

As a New Yorker, these "subsidies for jobs" programs never work. Yet we keep doing them. The last time I ran the numbers, NYS was paying Tesla/Panasonic 110k per year per job, yet the jobs only paid 45k.

marcod 3y ago
Unless you get guarantees in a contract which Amazon would never give :p
TheCoelacanth 3y ago
This one is working out fine for VA since they don't have to pay anything now.

cryptoxchange 3y ago

I know of multiple teams where 50% of the team were nominally HQ2/Virginia employees and 50% were distributed around the country last spring. Folks on these teams speculated that the Return To Hub push was specifically thought of to meet HQ2 incentives. None of the distributed employees ended up in Virginia. They all found local teams internally or left Amazon. When high performer leaves a team it’s common for others to leave since it breaks the ice. Lots of these teams then lost local talent to companies with less strict in-office requirements. Markets are gonna communicate information whether you like it or not.

michaelcampbell 3y ago

While it might sound overly cynical, and it probably is, you can place a pretty good even odds bet on "whatever a corporation says to get governmental favor will happen in the opposite direction". Double your stake if that favor is "a tax break"

AdmiralAsshat 3y ago

So glad Amazon picked Virginia to announce their HQ2, causing the already-unsustainable price of housing in NoVA to skyrocket even further.

Finnucane 3y ago

Still a better deal than Wisconsin got out of Foxconn.

pbronez 3y ago

As a local resident, I’m quite pleased with the whole thing. The incentives are gated by actual performance… if Amazon doesn’t do stuff, we don’t pay. In the meantime, lots of incentives were in-kind infrastructure improvements that we really needed to do anyway. What Amazon has already built is nice and fits in with the neighborhood. Really it’s all a tempest in a teapot.

sharts 3y ago

And there is 0 accountability for misleading marketing claims and the people that supported it.