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It was a good deal. Unfortunately for New York, it was also a touchpoint for exactly the same type of local populism that Amazon was trying to hedge against in the first place.

The amount of people loudly misunderstanding #1 really frustrates me.

I think calling tax incentives subsidies is really confusing and leads to that misunderstanding. Maybe that's the purpose of using that language?

Good point. Was it the media who started using the word subsidies for this?

"Subsidy" generally implies a third party transferring cash or cash equivalents to reduce or offset an expenditure. "Discount" or "break" generally implies that the party issuing the bill is voluntarily reducing the charge. The boundary between these is fuzzy, but I don't think it's right to call both "subsidies" and I do think there is a tendency for people to refer to discounts they don't like as "subsidies".

I think it's more coming from the perspective that taxation is the cost of doing business in an area. It pays for the training, infrastructure, security, etc that businesses rely on. Schools, roads, and police aren't free. Its coming from the perspective that governments pay the bill for companies operational expenses, and a company which is not pitching enough in to pay for these costs is getting subsidized by those that are.

I don't think "subsidy" is precise language but talking about "tax breaks" doesn't really communicate what a truly cushy deal Amazon is getting at the expense of others.

The amount of people who think #1 at all excuses this sort of deal really frustrates me.

Why? Tax rebates are incredibly common. $2.5B of that $3B was going to come from existing programs, like NY State's Excelsior program.

True. But it also annoys me that people assume it’s 25k jobs no matter what. I don’t doubt Amazon could double it’s executive workforce in the next 10 years, revenues, etc. It still is not a certainty though given we have already had a 10 year bull market run.

>"This wasn't some "backroom deal"."

From NYC's perspective this was exactly a backroom deal, done out of sight up in Albany.

It's important to note that in order to build the LIC Amazon campus the state employed a somewhat controversial land use procedure known as a GPP - General Project Plan. This was used as a way of circumventing the city's rezoning process which would have required greater city council input.

Using a GPP ensured that the Empire State Development Corporation had final say. And locally it was seen as an end around on Queen's LIC Councilman Jimmy Van Bramer and his district.

It's striking just how mismanaged the local perceptions and local politics of this whole deal were from the beginning. LIC and Queens in general is one of the most diverse places in the world. The overwhelming majority of which are people who have never heard of Hackernews or even work in tech.

Further this comes amid a time when New Yorker's have watched the fabric of the city change in rather concerning ways. The city has been blighted by a mix of both empty store fronts and endless retail bank branches on every block. Up above them a hyper construction machine builds endless glass tower "luxury condos" that are little more than safety deposit boxes for people who will not live there the majority of the year. All of this is a backdrop of great anxiety for many people. Our local governments have far more responsibilities than just generating tax revenue. These purely financial and technocrat armchair analyses never bother to take any of this into account.

You can’t have an economic model that just focuses on all the positive aspects of a deal — that’s just intellectual dishonesty. What about the negative externalities? The strain on public services, transportation, housing, etc? To be clear, I don’t think either side, for and against Amazon in New York City, know clearly how an economic development like this will affect the region.

Know clearly, or know for sure?

How would such strain be any different than if a different business or collection of businesses that employed the same number of people were launched in the same neighborhood?

(Disclaimer: I work for Amazon, but have no knowledge of or role in this process. Opinions are my own and not of the company.)

1) $500M of the deal is cash. That can be spent on other things. Many other companies are investing large sums in NYC without cash or tax incentives. Why give amazon special treatment?

2) It was a back room deal in the sense that it was negotiated in private without input from stakeholders such as city residents.

With respect to your math, the goal of government is not to maximize tax revenue, but to provide benefits for residents. Moreover, even if it was, the proper comparison is to alternative development plans and not to zero. If the goal is to redevelop LIC, why not have a competitive bidding process to redevelop that area? Many companies and developers would be interested and would bid against each other. When you negotiate with one party in secret you lose all your leverage.

I don't understand why any deal is necessary. Google, Facebook, etc. all seem to be doing fine in NYC without special treatment.

This is not about being against Amazon or tech, it is about being again crony capitalism.

--NYC Resident

1) The $505M is conditional if they bring 40k jobs. If it's only 25k jobs, that turns into $325M. This money is meant for construction costs. [1]

2) Who cares? Do we need a popular referendum for every business moving to New York? That's insane. There's a reason why we're a republic and not a direct democracy.

> With respect to your math, the goal of government is not to maximize tax revenue, but to provide benefits for residents.

That remaining tax money would improve infrastructure around LIC.

Also, as someone who used to live in LIC, who gives a shit? It's mostly yuppies and luxury housing until you get to Court Square. Sure, you have Queensbridge up north, but if public housing can survive in Manhattan, it'll survive in LIC. This is as low impact as you can get.

- Also a NYC resident

[1] http://gothamist.com/2018/11/13/amazon_queens_nyc_subsidies....

Well, we can agree to disagree, but I think there are many reasonable arguments against this deal that have nothing to do with the RWDSU and everything to do with a lack of transparency and special treatment for a large powerful corporation.

Wouldn't it be better to have a competitive process with multiple bidders to redevelop LIC? Let's see what the market clearing price would be. I'd bet it would not involve subsidies.

> Wouldn't it be better to have a competitive process with multiple bidders to redevelop LIC? Let's see what the market clearing price would be. I'd bet it would not involve subsidies.

When are you starting the campaign to cancel the REAP and ICAP programs?

> crony capitalism

It's just capitalism.

Not sure I follow. But when you say 'capitalism' do you mean the free exchange of goods and services? If so, did you buy the computer you used to write your comment? Or the food you ate this morning for breakfast?

My point is that this isn't the free market malfunctioning. This is the entirely logical outcome of capitalism. What you (and I) are asking for is more regulation to prevent these outcomes.

I am not asking for more regulation. Regulation often creates barrier to entry for the little guys. Good luck.

> 2) This wasn't some "backroom deal". The NDAs were a stipulation in Amazon's competition meant to prevent bidding wars. If cities could react to other cities, it would have created an escalating race to the bottom. Ironically, Amazon probably did this to avoid bad press. Go figure.

The entire thing was a race to the bottom.

> So yes - this was still a really good deal.

It wasn't. No giveaways to Amazon.

> It wasn't. No giveaways to Amazon. The mental gymnastics of this are exhausting. Just because it's a big company, doesn't mean this is a bad deal. We give tax rebates for new businesses all the time.

And as my math just showed, you pay this off in very little time.

But if you, as the city, didn't play ball and you knew for certain that the next town over wasn't going to play ball either; some city WOULD get the contract regardless. That tax revenue is gonna get collected and someone will get to spend it, whether you give Amazon $3bn or not.

I'm tired of giving money to multi-billion dollar companies, even if it does make fiscal sense. We have a poverty problem, and a shrinking middle class problem. Adding 25k jobs at $150/year would only make the housing crisis in NYC worse.

So why bend over backwards? All towns should band together and just stop coming to the table. Companies have to locate themselves somewhere. I don't want my state or city to try to attract more businesses that will raise my taxes if they're not going to do anything to fix my infrastructure and my tax rate.

> I'm tired of giving money to multi-billion dollar companies, even if it does make fiscal sense. We have a poverty problem, and a shrinking middle class problem. Adding 25k jobs at $150/year would only make the housing crisis in NYC worse.

I'm not sure I follow. How does rejecting business development and turning away thousands of high paying (and thus, paying high taxes) jobs help reduce poverty? How is rejecting well paying job opportunities supposed to help grow the middle class? Housing crises have everything to do with supply. San Francisco has a fraction the population of NYC but also has a housing crisis.

You seem to be operating under the notion that the presence of wealth somehow causes poverty. This is just plain wrong. How are we supposed to help the impoverished and build the middle class if we destroy job opportunities?

Your post comes off as putting more emphasis on "wealthy people stay out" rather than trying to come up with ways to help the poor

> I'm not sure I follow. How does rejecting business development and turning away thousands of high paying (and thus, paying high taxes) jobs help reduce poverty?

Because allowing this kind of behavior creates a race to the bottom, where the end state is that no company ever pays any tax. The only way to avoid this situation, if you don't have a higher-level government entity banning it entirely, is to grow a backbone and say no. And it isn't as if NYC is hurting for jobs.

> How are we supposed to help the impoverished and build the middle class if we destroy job opportunities?

I can just as easily flip this question on its head: how are we supposed to help the impoverished if we allow companies to play hostage-taker with jobs and ultimately drive their tax rate to 0?

> I can just as easily flip this question on its head: how are we supposed to help the impoverished if we allow companies to play hostage-taker with jobs and ultimately drive their tax rate to 0?

Because even if their corporate tax rates are reduced, their employees still pay income and sales taxes. Other posters estimated that Amazon's NYC workers would be paying close to half a million in income taxes alone each year.

Not to mention you're being intellectually dishonest as framing this as "dropping their tax rate to 0". Amazon's tax break is a temporary incentive. When the tax incentives expire, Amazon will be paying taxes like any other company.

The New York government estimated that the deal would bring in 27 billion over 15 years, yielding an 800% ROI.

Ding ding ding!

San Fransisco has a housing crisis BECAUSE of all the $150k jobs. How are the $65k people supposed to find an affordable place to live? You've got thousands of wealthy people, tens of thousands of high-end places to live, and hundreds of thousands of middle class people that can't afford rent. Meanwhile you've got renters who can't make a buck off poor people, and can't find any wealthy people to move in!

The presence of wealth doesn't CAUSE poverty. It exacerbates poverty. It's just incompatible in the same ecosystem.

You don't see any problems with the nations capital for homelessness handing $3,000,000,000 to a company that's already worth $1,000,000,000,000? Keep in mind that NONE of those homeless people will be getting job offers to work at Amazon. Amazon will truck and fly (already wealthy) talent into NYC to hire. You're not "improving" NYC poverty, you're just diluting it with existing wealth from elsewhere.

> San Fransisco has a housing crisis BECAUSE of all the $150k jobs

No, it's because there's a shortage of housing. There are plenty of places that have high incomes and low rents, because the supply of housing keeps up with demand. I doubt directional drillers in North Dakota are paying San Francisco rents.

> The presence of wealth doesn't CAUSE poverty. It exacerbates poverty. It's just incompatible in the same ecosystem.

I find this statement to be very dubious. Where would the homeless living in tents be if all the wealthy people had their salaries cut in half? They'd be in the exact same spot, except the government would have a lot less tax revenue to spend on social services.

Do you genuinely think that it's better to be poor in a poor country than it is to be poor in a wealthy country? What kind if life does someone in the bottom 10th percentile live in a place like the Democratic Republic of Congo, or Venezuela lead? What kind of life does someone in the same finacial position lead in Switzerland or Singapore?

I doubt directional drillers in North Dakota are paying San Francisco rents.

https://oilprice.com/Latest-Energy-News/World-News/North-Dak...

This is a town with less than 30k people: https://en.m.wikipedia.org/wiki/Williston,_North_Dakota

> The 2010 census[6] gave its population as 14,716, and the Census Bureau gave the 2017 estimated population as 25,586, making Williston the sixth-largest city in North Dakota

Of course a tiny town that nearly doubles in population in less than a decade is going to experience a sharp rise in rents. This is a classic example of cherry picking outliers.

In contrast, the median home price in all of North Dakota is just over $200k.

This still demonstrates my point: it's supply and demand that dictates the price of housing. If demand rises and supply stays the same rents go up. If supply keeps up with demand, they do not.

The solution to the housing crisis is:

- Improved public transportation (bring more homes in commuting distance and you increase supply, which decreases cost)

- Better building codes so we can build up. The NIMBY landlords who insist on height caps are artificially decreasing housing supply so they make more money.

Let's not strawman tech jobs in place of poor public policy. Creative destruction built the modern economy and cities need to plan for growth.

Thank you!

I'd also like to add to NIMBY designation (beyond landlords):

- Those who bought a SFH/condo for exorbitant prices who don't want more supply to keep their investment afloat

- Those who block all housing that does not meet their demands for affordable-ness. Oftentimes, anything not 100% affordable is unacceptable to them.

> San Fransisco has a housing crisis BECAUSE of all the $150k jobs

More accurately because it has lots of $150k+ jobs (and growing numbers of them) and lots of jobs at or barely above local minimum wage.

Absent compulsion, there's no reason for any marginal increase in housing stock available on the market to serve the latter market when it can be directed to the former, even if that involves a delay (e.g., for remodeling.)

> The presence of wealth doesn't CAUSE poverty.

Yes, it does; the presence of concentrated wealth drives up costs, increasing CoL, producing poverty. Outside of the situation where the production possibilities curve doesn't actually suffice to provide reliable survival-sufficient food, clothing, and shelter for the population such that with equitable distribution people would not be dying of starvation or exposure except by choice not to avail themselves of what what accessible, essentially all poverty is a result of the presence of concentrated wealth, because resources are directed to serve the interests of those with wealth, which is, after all, fundamentally just he power to command the direction of resources.

Nope. It has a housing crisis because policymakers and NIMBYs (whether wealthy SFH owners who bought into the inflation, or poor 'only approve if 100% affordable' housing types) block development.

What baffles my mind is people who think shutting down business is the way out. Which is what's happening in SF. Look at all the empty storefronts (now they want to tax landlords for keeping empty storefronts).

Whether you're being extorted based on your race, or trying to navigate all the permitting, it costs too much to do business here. That's why the storefronts are empty. Both on at the local level and even on the level of Tesla and Juul (who is leaving SF for many reasons including passing of more taxes for big local business, and attempts to ban corporate cafeterias in the city.).

The policymakers, many of whom have never done anything in the private sector are arrogant and corrupt to believe they can socially engineer people's behavior on all levels. I'm more inclined to believe shutting down the government would get more done (theoretically, notwithstanding existing gov employees).

You don't hear the stories of latino families who bought a house in the Mission for 50k in 1975 who then sold it for $1.5M in 2015. Or the people happy their neighborhood no longer has the violence it once did. You only hear the people who complain. Who are unable to adapt and take advantage of the incredible opportunity to grow themselves and their family. Maybe they should move to Flint, Michigan?

But then again, yea, keep hoods yours. Stave off the all evil racist (white) 'gentrifiers'...

And lastly, let me guess, you are not in poverty? But you know what's best for people who are? (Just checking)