As much as the anti-gentrification politicians would claim a small victory, this is a loss for NYC and the future development / resilience of its economic base.
Cities will keep on losing this kind of battle until some form of government or policy arises to counter the power of corporations (which are de facto increasingly taking the role of governments). Under our current regulations and incentives, I'm actually glad to see Amazon flex its political capability and teach NYC a lesson in what happens when you let vocal minority dictate public policy. Let examples like this teach us how broken our laws are.
Note I am equally glad to see some day that government (federal, state) come up with policies that stop cities and states from undercutting each other to get a temporary revenue / population / popularity boost at the expense of giving away the farm just to get it (until you find out it wasn't worth it, and get to try and remember that at the next election). Or god forbid, actually create policies that in the long-term stimulate as many jobs as a corporation might in a single swoop.
> this is a loss for NYC and the future development / resilience of its economic base.
I don't see any reason to prioritize the "economic base" over the people currently living there. Those things do not necessarily go hand-in-hand. They can, but often do not. Those elected officials seem, to me, to be representing the best interests of the people who voted for them. What's best for the tax base of a certain geography is often at odds with the people currently living somewhere.
LIC is essentially a neighborhood cut from whole cloth - it used to be all taxi yards and vacant warehouses, bit of high end printing.
No one lived there until very recently, and the people that do are rich as fuck - it's basically a discount Midtown East. The poor people who live in the nearby projects came out strongly in _favor_ of Amazon opening up and lobbied the city hard - turns out Amazon also needs janitors, cafes etc.
Isn't this exactly the opposite? Amazon would have destroyed the general economy in NYC like they did in Seattle. This is the city ignoring the big corporation and listening to their people. NYC doesn't need Amazon. It needs to fix it's rail system.
Taxes from 25,000 making low six figures pales in comparison to the incentives handed to the corporation. What is a better investment for NY, handing 3b to amazon, putting 3b directly into the rail system, or putting 3b in an investment fund and making use of the dividends? I'm not sure, but I can't help but think that if amazon figures 3b is a good deal for them, then it is an irresponsible use of public funds to enrich large % shareholders of amazon rather than having that public money 100% go to public use. Amazon isn't in it to improve LIC or NY, they are in it to raise their share price at the end of the day and wouldn't care less if Queens burned to the ground and sunk into the east river as long as earnings reports remained positive.
Suppose each worker makes $150k/year in income and spends $50k a year. That would come out to about $187M in income taxes and $125M in sales taxes each year from the directly employed individuals. There is likely to additional revenue as well. The economic impact studies commissioned by the mayor and governor put the expected revenue in the $20B+ range over 25 years.
It’s become very stylish to rage against corporations. I wish people would take a more rational point of view. We shouldn’t be hating on successful businesses for fun.
Edit: also, I’m not sure, but isn’t the $3B a reduction in taxes Amazon would have paid? So it’s not like NY had that money to begin with. It’s jist a reduction in what they would receive.
How long will it take to cover the almost 3 billion dollars they were offering Amazon? That is money that could go into improving mass transit right now AND provide jobs for building and operating it, while benefiting hundreds of thousands of citizens through it's usage.
New York isn't literally giving Amazon $3 billion, it's a tax break. Big difference. It's not like New York is foregoing $3 billion in income from other businesses in order to accommodate this subsidy package.
And like other commenters pointed out, the state still makes money through payroll taxes, sales tax, property tax, etc.
I agree that the politicians should have made it more clear that the additional tax revenue would be used to fix urgent problems like the failing subway, poverty, etc.
The average employee in that 25k cohort would need to be paying $12k worth of state taxes to NY every year for ten years in order to recoup the $3B tax break figure.
Average $160,000 household income per employee = ~$14,000 per year in state + local income taxes. That's ~$8,500 per year just to the state in income taxes.
Include all taxes from 25,000 employees + their families (property taxes, sales taxes, etc), and it's a very likely $4.5 to $5 billion over ten years to state & local coffers from the employees.
And that's just the direct benefits. It excludes any taxes Amazon corporate would pay, such as property taxes on any real-estate they buy over that ten years. It also ignores the potential for additional expansion in that ten years (Amazon will more than double in size over that time, to half a trillion dollars plus in sales, I'd bet on more than 25k employees).
It would have easily paid for itself, which was actually never in dispute. People didn't like it regardless of the fact that it would have paid for itself. They disliked the idea of giving Amazon anything.
How do you figure that a family is paying more in property tax / sales tax than a not family? Property size is a function of income, as is sales tax, and you've already included income in your calculations.
The other issue is that this is assuming literally all 25k employees would be new residents of NY. Assuming this is true (which it probably wouldn't be), that also means that the city needs to maintain infrastructure for at least 50k new residents (probably more like 75k assuming an average family size of 3). That's not an insignificant amount of new people who require public services.
Regardless, ($14k * 25k * 10 = $3.5B). Not that much more than the initial tax rebate, and not accounting for any additional costs to the city. Also assuming that the rate of tax-paying by employees remains consistent, and that they don't cut any staff in HQ2, which is far from certain.
As to:
Property taxes on real-estate owned by AMZN
You realize any property that Amazon would purchase is already owned by someone, right? And that the current owner is already paying property taxes.
Amazon already has an office in NYC. If they want to expand in NYC they can. Amazon growing in NYC is not at all predicated on the existence of HQ2. The only probable reason Amazon would continue to expand in NY specifically would be for more tax breaks. Which kinda defeats the argument that "Amazon will grow and we can collect more taxes".
1. New York State has a high tax burden. They don't just collect income taxes - they also collect property, sales and capital gains. $12k per year all-in for a high income worker is pretty typical when you account for these additional taxes.
2. Amazon inc. will also be paying taxes. It doesn't fall entirely on individuals.
3. Ten years isn't that long for a four hundred year old city.
Seems like an clean net positive for the city even viewed in the shallowest of accounting terms. This doesn't include the positive network effects of encouraging the future growth of Amazon and other tech companies in the area.
What if Amazon decides they only need 10k employees in "HQ2" after 5 years?
Better bird in hand than two in the bush.
NY needs to focus on improving infrastructure now, which is the only guaranteed thing that will promote growth in the long term. And to do that, NY needs to be 1. less corrupt and 2. not give giant tax breaks to corporations that already have offices in the city.
Yes, maybe Amazon HQ2 will be a net positive 10 years down the road, but NY should focus on fixing its broken subway system and other structural issues so that the city can actually support 10 Amazons in 10 years. And HQ2 literally did the opposite of that (increasing ridership while decreasing revenue in the short term is not how you improve infrastructure, surprisingly).
It's not. Amazon is one of the best things that has ever happened to Seattle. The Seattle economy is by far one of the greatest results America has seen in the last 30 or 40 years among major cities. There are only a few cities in the US that compare when it comes to quality of life, standard of living, incomes, employment prospects, et al.
When someone says it's destroyed, they mean it's gentrifried or exclusionary, not benefiting everyone equally. That's certainly true. Economically the fact is Seattle has been an epic boom city for two decades now.
Sweden, Finland, Denmark and Norway also don't benefit everyone equally. 99.9% of the world can't live there, few of the planet's 7.5 billion people are welcome. It turns out that all nice, affluent places are aggressively exclusionary, without exception.
Cities will keep on losing this kind of battle until some form of government or policy arises to counter the power of corporations (which are de facto increasingly taking the role of governments). Under our current regulations and incentives, I'm actually glad to see Amazon flex its political capability and teach NYC a lesson in what happens when you let vocal minority dictate public policy. Let examples like this teach us how broken our laws are.
Note I am equally glad to see some day that government (federal, state) come up with policies that stop cities and states from undercutting each other to get a temporary revenue / population / popularity boost at the expense of giving away the farm just to get it (until you find out it wasn't worth it, and get to try and remember that at the next election). Or god forbid, actually create policies that in the long-term stimulate as many jobs as a corporation might in a single swoop.