No New Yorker was happy about the subsidies, especially since it was x4 the amount of the one Amazon got in D.C. Subway is running at full capacity, and real estate prices are already high.
It was seen as a bad deal, and new yorkers just don't have a positive view of amazon. When your restaurant is already almost at full capacity, there is no need to lose money on a groupon campaign.
I don't think anybody would have complained if these subsidies were done somewhere upstate, where the jobs are truly needed.
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
And indeed, the full survey results (linked on the bottom of https://harrisx.com/2019/02/new-poll-shows-overwhelming-supp...) show that once they were asked about subsidies, most respondents (and 74% of those with an opinion on the subject) thought they were too high.
(That's without being prompted with the specific $ amount of the subsidies, as far as I can see. If they had mentioned the $4 billion figure, the response might have been even more overwhelming.)
I would say, of people I've met that voice reluctance over the deal, all of them have been over the issues you mentioned, except the subsidies (i.e. gentrification, housing affordability, oversubscription of public services). I haven't spoken to anyone in person who said anything negative about the subsidies.
a majority of New York registered voters also see it as likely that Amazon’s HQ2 will increase the cost of housing in New York City and complicate public transit and transportation, among other issues.
This seems to support the parent’s general claim about the subway etc.
Did the poll ask if New Yorkers were happy with the subsidies?
The poll question: Do you approve or disapprove of Amazon locating one of its new headquarters in Long Island City in Queens? is at least vastly incomplete.
I don’t know the specifics, but it seems fair to me the question should be something more like: do you approve or disapprove of the city spending $x of taxpayers money on a deal to bring Amazon to NYC?
Read my answer again. I said people are not unhappy about Amazon moving here (after all, they already have offices here), but for the large subsidies Cuomo conceded to them.
The questions on that survey don't mention any thing about subsidies... period.
Change it to: "Do you believe Amazon should be given 3B subsidies to come to NYC?" and the replies will look very different...
It's not as much a correction than it is a response to a general trend of HN commenters making incorrect assertions while remaining unassailably confident in their opinions and their moral superiority on several issues. In general, confident wrong people grind my gears a lot, especially when it comes to issues that it's common to get preachy about, like "big business", "billionaires", etc.
Now that it's Amazon, it's creating too many jobs and (therefore) costing too much money? I don't support tax subsidies in general, but the program was already signed into law, you can't just change the rules that you set yourself just because you realize in hindsight it's a bad deal. Honestly, the people of NYS elected Cuomo twice, they should have to live with the consequences.
Well, Amazon has nothing to do with the city neglect of subway and other public transportation development. See an examples of Tokyo, Shanghai, Beijing (all of them are more populous than NYC), where they build new stations, new roads for public transit, optimize old ones, etc. It is always sad to see the city of planetary importance struggling to maintain itself.
Part of it is New York's system is much older than the rest of your examples, Tokyo didn't really expand beyond a single tunnel till 50s-60s, Beijing opened in the 60s and Shanghai only started construction in the mid 80s. Then on top of that the city of New York isn't actually in charge fully so (like just happened) if they try to do something disruptive but critical the governor can come and derail the whole plan. I don't mean to say it excuses the mismanagement but it does explain a lot of the problems.
Also it's not like they're not building new stuff in 2017 the second avenue subway opened with 3 new stations.
When do you think they can fix the subway? It has been neglected for decades. It handles about 5.5 million people a day. An extra 25,000 people can’t be accommodated?
Everytime I hear someone complain about this I wonder if they consider how many cars will not be needed during rush hour because Amazon chose NYC.
Hey, what do you think about the massive spending plan the Democrats are working on to solve climate change?
Do people even try to connect the dots?
Newark to Long Island City is about 15 miles. Plenty of affordable real estate there. With a little urban planning and better mass transit, NYC could handle 10 Amazons.
Having more people in NYC is great for climate change, because the urban environment is a lot less carbon intensive. In what other city could Amazon locate where fewer net cars would be added to the roads?
I'm not a new yorker. But I'm a 100% a fan of AOC and fully agree that Amazon has no business ruining NYC and causing gentrification to LIC. I can't help but feel for the families, businesses and communities this will disrupt.
Its pretty much crystal clear that the entire HQ2 song and dance was designed from the outset to extract concessions from Washington D.C. and NYC (and also collect a shitload of data on leverage they might have in other locales for stuff like amazon warehouses).
Ask yourself if amazon needed this huge competition to build in the two default-choice locales. It is absolutely a total sham.
Good on NYC for opposing this, its likely that this is just Amazon trying to get even more out of the deal.
Yes. But the rhetoric around this is wrong. Opposing people's rationale is: "wow, the local government is cutting down a check of 3 billion to a large corporation, fuck them! They should invest in schools and public transportation, etc".
But that's not what a tax incentive is. The incentive is: bring your business here, create jobs, add economic fluidity with your workforce and you don't have to pay 3 billion dollars in taxes.
See how different is that? If Amazon decides to pull out, they just don't bring those jobs and don't get those tax incentives...but there's no extra 3 billion to spend in your community. There's literally 0 dollars more. You're not saving 3 billion in state and municipal funds. Those 3 billion in taxes (whether you exempt someone from paying them or not) only happen if Amazon (or any company) exists in that region.
The worst part is that some elected state officials are getting behind this rhetoric and that's kind of hard to understand. Either they are doing it for populism which is terrible, or they are doing it because they are ignorant which is even worse.
Your explanation might be correct, but that's not what many cities offered Amazon. Most offered comprehensive packages that offered to subsidize wages and construction, improve infrastructure, etc. on top of the basic tax credit you refer to. The city would likely be out any of the money it put up for infrastructure upgrades if Amazon had bailed on them.
Montgomery County, Maryland offered an $8.5B incentive, which included $2B in infrastructure & transportation improvements around the HQ site. If Amazon had pulled out, $2B went towards optimizing an area that's no longer a job center. Philadelphia's incentive included $1.1B for essentially the same function. Atlanta offered $2.2B in infrastructure investment.[0]
This is only true if the company's behavior is changed by the incentive, and the parent's comment was about the view that it isn't.
Moreover, in the global sense we have been deprived of revenue. Amazon was going to open somewhere. This competition means that they overall pay less tax than without it, because they extracted concessions. If we care about protecting the public purse in the general sense, it's reasonable to object to these tactics.
> But that's not what a tax incentive is. The incentive is: bring your business here, create jobs, add economic fluidity with your workforce and you don't have to pay 3 billion dollars in taxes.
It's true, but it's not like your employees also get a tax break. It seems again like the workers are shouldering the burden.
The only reason why this works is because it's a race to the bottom where big companies get huge benefits to their taxes because they can shop around (just like Amazon did with the whole HQ2 thing), and then pick who treats them best. Most businesses don't have that kind of leverage.
If no state offered any tax incentives like this, then companies would just end up paying more taxes, right? We could get into moving your company to another country, but for Amazon this would mean a lot of things, like increased shipping times, customs, etc.
"Economists say that most of the time, the incentives are counterproductive — a zero-sum game in which jobs created in one community come at the expense of jobs lost somewhere else. The real winners are companies, which are able to play municipalities against one another so as to be freed of paying taxes other businesses (and homeowners) do. The result is a "race to the bottom," leaving cities with less to spend on infrastructure improvements and public education. At the same time, companies increase expenses for communities by drawing on public resources, including sewer systems, roads, power lines, and schooling for workers' children. Last year, Wisconsin pledged $3 billion in incentives to electronics manufacturer Foxconn to build a plant in Racine County that the company says will eventually employ 13,000 workers. But according to Wisconsin's own estimates, the cost to taxpayers per job created is $230,700, and the state won't recoup its investment until 2043."
And now more recently, Foxconn has been saying they won't even have as many jobs as they thought!
You are guaranteed to not earn that 3 billion from that area (usually property tax based) if you offer that incentive to Amazon.
You will get something from that area if you don't. Amazon isn't the only game in town - it's not like NYC is starving for new business...
The Excelsior program, which is most of Amazon's state subsidy in this HQ2 deal, has existed long before HQ2 was first mentioned. Its goal is to create more jobs, and so clearly there is pre-existing motivation to drum up new business via subsidies. It's also a tax credit on things like prior job creation, and so it does not carry the same risk as a capital investment that the city may not recoup: https://esd.ny.gov/excelsior-jobs-program
The money is absolutely real, and the point is that NYC has what Amazon wants, Amazon does not need corporate subsidies, and that NYC should be leveraging its talent pool and thriving economy in order to generate more revenue for the city. Cuomo's incompetence left $3bn in revenue on the table.
Furthermore, representing your constituents is not "populism". Local residents are intimately familiar with how gentrification displaces entire communities considering it happens all the time there. Big business Democrats like Cuomo and DiBlasio are just having a tantrum because they're so seduced by revenue charts that they've completely dissociated from the impact of these decisions on real people.
Your logic would also conclude that all taxes are a mistake, and a rational municipality would offer a 100% tax break to everyone as an incentive. That seems like too strong a conclusion.
What makes these the two default-choice locales? There was substantial debate across the Internet about the ideal ___location. To claim that NY was a 'default choice' seems baseless. The offer of subsidy/support is what made it into a mutually-acceptable deal. That's just how negotiation works.
I don't understand the indignant opposition towards this deal to be honest.
All but $505m of the ~$3b in subsidies here comes from programs that already existed in NY State and NYC (Excelsior, ICAP, and REAP). Would you give up $3b over 10 years (and just $505m above programs that are broadly available) to attract business that will provide an incremental $13.5B in new tax revenue and $186B in GSP over 25 years? That is a _tremendous_ ROI, the kind that typically does not exist in the market, and a $505m capital grant (the primary Amazon-specific concession) is a small price to secure it. The 9:1 return they projected on this deal is the best such program NY State and NYC will have ever run. To put it into context, the Film Tax Credit program had a 1.15:1 ROI.
We can argue all day about whether the HQ2 search was a bluff or sham or whatever, but there is no reasonable claim to certainty here - and hence negotiation enters the picture to turn something uncertain (Amazon MAY come to NYC) into certain (Amazon WILL come to NYC).
> The construction is expected to create an average of 1300 direct construction jobs annually through 2033. Overall, the project is estimated to create more than 107,000 total direct and indirect jobs, over $14 billion in new tax revenue for the State and a net of $13.5 billion in City tax revenue over the next 25 years. The project provides a 9:1 return on investment.
> According to an economic impact study by REMI, Inc., a world leader in dynamic forecasting and policy analysis, the Amazon project will generate over $186 billion in Gross State Product for the New York State economy over the initial 25 years. REMI also projects over $14 billion in total new tax revenue for the State (in 2019 dollars), with annual revenues growing from $10.8 million in 2019 to nearly $1 billion in 2043. The City forecasts $13.5 billion in total new tax revenue.
You don't understand why giving one of the largest, most profitable companies in the world money for real estate while homelessness is widespread and on the rise[1] is objectionable?
Frankly, I don't believe those ROI projections: we've seen these kinds of wildly optimistic plans time and time again with companies promising tax revenues based on straightforward filing, and then using the wide variety of loopholes to (legally) avoid the projected taxes. But even assuming the projections come to fruition: who receives those returns? Is it going to help New Yorkers who need help, or to the already rich? Right now all signs point to the latter. If we're just re-gifting all the money back into already highly profitable companies, I don't really care to hear about ROIs.
> who receives those returns? Is it going to help New Yorkers who need help, or to the already rich?
The net new revenue can be used by the city and state to pay for whatever services they deem fit (e.g. infrastructure, health, etc.).
> we've seen these kinds of wildly optimistic plans time and time again with companies promising tax revenues based on straightforward filing, and then using the wide variety of loopholes to (legally) avoid the projected taxes
The company is not promising tax revenues here. The city/state are. They are the ones who commissioned the economic analysis, and I am sure the findings informed their negotiations. The tax sources are not just Amazon either - it includes things like taxes from the additional jobs and businesses that will be created outside of Amazon.
> I don't really care to hear about ROIs.
The ROI is what matters, though. If you were a city that is looking to increase your budget to provide more services to your constituents, you might consider what sort of investment choices you could make to get there. The ROI here is well beyond any other conceivable option. It is so large that even if projections of a 9:1 ROI are way off, it would be a big win. To put it into context, the NY Film Tax Credit program had a 1.15:1 ROI but was still implemented. Also, most of the subsidy to Amazon is not an up-front lump sum. Rather, most of it takes the form of credits for prior actions.
Taking all this into account, this seems like a super safe path to greater tax revenues, which will improve the city and state as a whole.
> The net new revenue can be used by the city and state to pay for whatever services they deem fit (e.g. infrastructure, health, etc.).
Like giving more money already-highly-profitable companies?
> Taking all this into account, this seems like a super safe path to greater tax revenues, which will improve the city and state as a whole.
Well, like I said, I'll believe it when I see it. Your argument makes logical sense, it's just that your argument has been used to justify all kinds of spending in the past, and lo and behold, homelessness is increasing, schools are still underfunded, rents are more and more unaffordable, etc. If giving money to already-profitable companies works so well, then why are none of the problems I care about solved already, since we've been giving money to already-profitable companies for decades?
None of these deals ever come with enforcement imposed on the economic projections used to justify them, whether for corporate headquarters or sports stadiums. If these things are so profitable for the taxpayers, why doesn't Amazon guarantee the projected numbers, paying any eventual shortfall directly to the state and city? (Yes, there would need to be a way to measure whatever metrics are used.)
For most of these deals, companies make promises that are used to make the deal politically palatable, but since they are not penalized for failing to meet them, and therefore frequently do so.
The projections are done by the city and state in this case, not Amazon. The city/state agents involved worked with a third-party (REMI) to perform a comprehensive forecasting and economic analysis. Also, most of the subsidies here are not in the form of capital investments, but rather things like tax credits which are provided for some action already taken (for example, having created a job that meets certain requirements).
This deal is very safe because it is paid out incrementally, over time, and mostly in-step with incremental actions taken by Amazon, and because the ROI is so big (even if projections are significantly off target, this will still be a win).
I don't think it matters whether Amazon or the city/state engaged the third party - the personal career/campaign finance incentives of the individual politicians/functionaries who negotiate for the city/state are aligned with Amazon's wishes and against those of the taxpayers.
And the third party's incentives are to please the paying customer in showing a good return on investment.
But if the subsidies won't actually get paid unless Amazon delivers on their promises, I agree this deal is way better than most of its type.
Atlanta would be a good city for Amazon I think. World's busiest airport. They could eventually acquire Turner Broadcasting Systems, CNN. Really aim for world domination.
Maybe partner with UPS? Delta? Coca-cola?
They could benefit from the booming entertainment industry as well.
Amazon should put their headquarters in Las Vegas. Preferably some distance from the strip in some big generic suburbia office park. That place feels soulless and it will be perfect for techies who live in Internet land and just use meatspace for working out, dating and the bathroom facilities.
https://news.ycombinator.com/item?id=19116064