Amazon Opens Search for Amazon HQ2

[haertig]

I would have pulled the plug too, if I were Amazon. Why would anyone want to establish their business where there already are sky high business taxes in place? Maybe if they give you some tax incentives to bring their high taxes in line with other places. But if this location you are considering also has a bunch of loud activists and politicians actively opposing you because they don't want to give you those tax incentives to help offset their high tax rates, why bother? Just find a better, more accommodating place. Like Amazon decided to do.

As I said in an earlier post, I really don't care how New York runs their city/state. Amazon can end up wherever Amazon wants to end up. I'm fine with any outcome. But saying it wasn't New Yorks choice and it was Amazon that pulled the plug may be technically correct to some degree, but very misleading. Amazon pulled the plug because of New Yorks choices. I think any sane business would have done the same. For some of the same reasons you aren't seeing many businesses rushing to set up shop in Venezuela these days. Can you blame them? Can you blame Amazon for discarding New York?

Elections have consequences. Whether you consider this Amazon consequence to be a good thing or a bad thing for New York does not change the fact that it is indeed a direct consequence of their election choices. If citizens don't like the results of their choices, change your choices. If they like the results, stick with your choices.

[Pajamaman]

Originally Posted by Ralph Sir Edward

Here is a CNBC article about the politicians involved.

https://www.cnbc.com/2019/02/15/ny-s...azon-deal.html

Maloney, ranking member on the Joint Economic Committee on Capitol Hill, said the $3 billion in subsidies for Amazon would have only materialized if the company kept its promises on job creation and other economic development metrics. Just because Amazon left doesn't means there's an extra $3 billion that can be spent elsewhere, she added. "There is no money if Amazon doesn't come to New York. There's not a pile of money."

Well you can't expect a $3 billion handout without some strings attached.

[haertig]

Originally Posted by Pajamaman

Well you can't expect a $3 billion handout without some strings attached.

Likewise, you can't expect a big payout with zero investment.

New York wanted to risk zero. And even with a high rate of return, that still comes to zero payout. You can't expect to win the lottery if you don't buy a ticket.

[Nate the great]

Originally Posted by haertig

Why would anyone want to establish their business where there already are sky high business taxes in place?

Amazon pulled the plug because of New Yorks choices. I think any sane business would have done the same. For some of the same reasons you aren't seeing many businesses rushing to set up shop in Venezuela these days. Can you blame them? Can you blame Amazon for discarding New York?

I don't know, why don't you tell us why Amazon has 40K employees in Seattle, 5k employees in NYC, and 15K in San Francisco?

Hmmm, maybe there's a benefit that reflexive Amazon supporters like yourself missed.

hmmm

[rcentros]

If a corporation decides it is advantageous to move into a certain city, they should shoulder the costs. A relatively small town in the Fort Worth area recently "paid" Farmer Brothers to move their headquarters from California to Texas. They gave them a ten year tax abatement. Guess what happens in ten years? Farmer Brothers puts themselves "up for bid" again and the locals are stuck paying for the improvements that brought Farmer Brothers into town. Same thing with taxpayers paying for football stadiums that benefit the owner of the team. Not for it. I don't like corporate welfare.

[SteveEisenberg]

This risks get a bit away from Mobilereading concerns, but, Google's New York City expansion is being achieved without any corporate welfare that I can find mentioned in articles like this:

http://gothamist.com/2018/12/17/goog...are_campus.php

Lots of people just don't want to live outside New York City. I presume a lot of tech companies know this and have development offices there, for that reason, without need for some kind of bribe-taking. Another option is to let people work from home with your office located in a cheaper location. But this impairs teamwork.

[Nate the great]

Originally Posted by SteveEisenberg

This risks get a bit away from Mobilereading concerns, but, Google's New York City expansion is being achieved without any corporate welfare that I can find mentioned in articles like this:

http://gothamist.com/2018/12/17/goog...are_campus.php

Lots of people just don't want to live outside New York City. I presume a lot of tech companies know this and have development offices there, for that reason, without need for some kind of bribe-taking. Another option is to let people work from home with your office located in a cheaper location. But this impairs teamwork.

On the other hand, Google is asking Toronto for a cut of the tax revenue generated by Google's surveillance city project
https://www.thestar.com/news/gta/201...nt-vision.html

[rcentros]

Originally Posted by SteveEisenberg

This risks get a bit away from Mobilereading concerns, but, Google's New York City expansion is being achieved without any corporate welfare that I can find mentioned in articles like this:

According to this article (that came out shortly after the deal was first announced), it was going to cost the taxpayers nearly $3 billion.

What is Amazon getting?

Amazon will build a campus of at least 4 million square feet near the Anable Basin on the East River waterfront, on a site that’s partially owned by Plaxall Realty and partially owned by the city. But rather than going through the city’s extensive land use review process, known as ULURP, the state will take the lead and override local regulations on the lot, currently zoned for manufacturing space.

To facilitate the necessary rezoning for the project, the state will make use of a General Project Plan (GPP), which was used in recent years to advance the Javits Center expansion, Atlantic Yards, and Moynihan Station. (The GPP includes an environmental review and input from the City Planning Commission and local community board, though they’re nonbinding).

The agreement comes with a number of incentives: Specifically, Amazon will receive $897 million from the city’s Relocation and Employment Assistance Program (REAP) and $386 million from the Industrial & Commercial Abatement Program (ICAP). It will receive an additional $505 million in a capital grant and $1.2 billion in “Excelsior” credits if its job creation goals are met. That brings the total amount of public funds granted to $2.988 billion—in other words, the city and state will pay Amazon $48,000 per job.

https://ny.curbed.com/2018/11/16/180...city-explained

And that doesn't include all the money saved by granting Amazon special privileges and not making them jump through hoops that most businesses would have to jump through. That kind of red tape would have cost millions on something this big.

[haertig]

Originally Posted by Nate the great

Hmmm, maybe there's a benefit that reflexive Amazon supporters like yourself missed.

You're saying I missed this benefit, and implying Amazon did too? Amazon hightailed it out of there so fast that the door didn't even have a chance to hit them in the butt on the way out. They pulled that door closed, locked it, and threw away the key as they ran out. You wouldn't see that behavior if there had been much benefit to work with and continue negotiations. Every analysis I've seen in the news says this is a missed opportunity for New York. I haven't seen a single one that said it was a missed opportunity for Amazon.

[Greg Anos]

Originally Posted by rcentros

According to this article (that came out shortly after the deal was first announced), it was going to cost the taxpayers nearly $3 billion.



https://ny.curbed.com/2018/11/16/180...city-explained

And that doesn't include all the money saved by granting Amazon special privileges and not making them jump through hoops that most businesses would have to jump through. That kind of red tape would have cost millions on something this big.

If the numbers claimed by Amazon are correct (average job pays $150,000) then the payback per job (for NYC taxes only, ignoring NY state taxes) is 11 years.

$150,000 x 3% (.03) = $4500 a year in NYC income taxes. X 11 years = $49,500.

This does not include any sales tax payments, nor does it include any area multiplier effect for new support jobs. (People are going to spend some of their salary locally, no?)

[Nate the great]

Originally Posted by haertig

You're saying I missed this benefit, and implying Amazon did too? Amazon hightailed it out of there so fast that the door didn't even have a chance to hit them in the butt on the way out. They pulled that door closed, locked it, and threw away the key as they ran out. You wouldn't see that behavior if there had been much benefit to work with and continue negotiations. Every analysis I've seen in the news says this is a missed opportunity for New York. I haven't seen a single one that said it was a missed opportunity for Amazon.

"Amazon hightailed it out of there so fast"

Wait, Amazon moved all 5k employees based in NYC to other locations?

Where did you read this? link?

[tubemonkey]

Originally Posted by Ralph Sir Edward

(People are going to spend some of their salary locally, no?)

These are upscale jobs, so they'll shop in upscale locales.

Mom and pop stores will thrive with this new influx of jobs

[SteveEisenberg]

Originally Posted by Ralph Sir Edward

If the numbers claimed by Amazon are correct (average job pays $150,000) then the payback per job (for NYC taxes only, ignoring NY state taxes) is 11 years.

New York City needs to consider that if they give billions to Amazon, other companies that would otherwise expand in the City, without being bribed, will now demand the Amazon treatment. The fact that New York gave the $3 billion offer and was turned down will thus, perhaps in a way impossible to quantify, harm the city's economy.

When a big company demands money from a small town with hardly any current non-local employers, such moral hazard isn't a consideration -- since no big outside employee will add jobs without being bribed. But for New York City, the calculation is different. I'm not saying it's right for the small town to bribe an employer to come to town, but it makes more sense than it does when you already are perceived as a desirable location.

If I lived in NYC, I would have been against bribing Amazon. But once the bribe was accepted, I'd figure it made even less sense to back out.

[Greg Anos]

Originally Posted by SteveEisenberg

New York City needs to consider that if they give billions to Amazon, other companies that would otherwise expand in the City, without being bribed, will now demand the Amazon treatment. The fact that New York gave the $3 billion offer and was turned down will thus, perhaps in a way impossible to quantify, harm the city's economy.

When a big company demands money from a small town with hardly any current non-local employers, such moral hazard isn't a consideration -- since no big outside employee will add jobs without being bribed. But for New York City, the calculation is different. I'm not saying it's right for the small town to bribe an employer to come to town, but it makes more sense than it does when you already are perceived as a desirable location.

If I lived in NYC, I would have been against bribing Amazon. But once the bribe was accepted, I'd figure it made even less sense to back out.

New York City has been "hollowing out" for decades. Check the number of Fortune 500 companies who have left versus those that have moved to NYC.

[Catlady]

Some of you seem to be using the same faulty logic that AOC and other Amazon opponents did--framing the story as NYS and NYC handing over $3 billion that now can be used for something else. But the money was in tax breaks, not a handout. There's no pile of money that can be reassigned to something the opponents deem more worthy.

Not the first time AOC has applied faulty logic--remember her claim that a $21 trillion Pentagon accounting error could pay for Medicare for all?