
Facing opposition, Amazon reconsiders NY headquarters site, two officials say - ihuman
https://www.washingtonpost.com/local/virginia-politics/facing-opposition-amazon-reconsiders-ny-headquarters-site-two-officials-say/2019/02/08/451ffc52-2a19-11e9-b011-d8500644dc98_story.html
======
mattbuilds
I can't even try and take an article like this seriously. I understand it says
in the article that Jeff Bezos owns the WaPo, but the way it's written sounds
like Amazon trying to make a threat. Just look at the way the article starts
off.

> Amazon.com is reconsidering its plan to bring 25,000 jobs to a new campus in
> New York City following a wave of opposition from local politicians,
> according to two people familiar with the company's thinking.

Amazon isn't considering bringing 25,000 jobs to NYC out of the goodness in
their heart. It's a business play where they are doing what they think is most
profitable for them. They want to be in NYC because it's the largest market in
the US. I think their plan all along was to come to NYC. They just thought
they could stage this elaborate "pick my city" nonsense and get a bunch of tax
breaks. This article just sounds like them whining that people caught on.

~~~
specialp
Exactly. The whole HQ2 Willy Wonka show was never going to move to some area
that really really needed it. NYC is currently a boom town, and I as a NYer am
disappointed that we gave them such a huge amount of tax breaks. I support NY
perhaps lifting some of its bureaucracy to make such a large move here
possible, but do not support giving Amazon money.

Amazon needs NYC because it has a metro area of 20 million people with more
developers than Silicon Valley, and also many other skilled people in
management and business. The days of someone moving to a company town to work
for them are over as you have seen with GE moving to Boston and other
corporate moves. Nobody is going to move to a small city to work for Amazon.

~~~
mruts
What’s wrong with tax breaks? It’s like people are under the impression that
the government is actually paying Amazon. If Amazon didn’t get any tax breaks,
they would have gone somewhere else.

The people who don’t want Amazon in Queens don’t actually live there, all the
protests are in Manhattan.

People are protesting the likely rise in rents that an Amazon HQ will cause.
But the real problem is government regulation. If real estate developers could
build housing without all the NIMBYs yelling to their city councils or if they
could build without onerous regulation about fire escapes or whatnot, people
would have housing.

All this regulation that is supposed to help consumers actually hurts them.
It’s not like with regulation companies will do the same thing as if they
didn’t exist. Many companies will just opt out.

I’m guessing I’m going to get downvoted, but I honestly believe that
regulation is the root of all evil and most social ills (like healthcare
costs, pharmaceutical prices, etc).

But instead of protesting the bad incentives government creates, people just
blame the “greedy” corporations.

~~~
adamson
I’ve never really heard a claim like this. What regulations lead to higher
prescription drug costs and higher healthcare costs generally?

~~~
kevindqc
I always thought the high prices in the US was because of not having universal
healthcare - when you are buying for millions of people, you can have lower
prices? It's not like the US is the only country that regulates drugs?

~~~
refurb
United Healthcare, a US insurer, covers 40M people. That's bigger than the
entire population of Canada, but Canada has cheaper drugs.

~~~
kevindqc
Good point, thanks

------
untog
If this happens (and I'm not all convinced it will, I think this is just
Amazon posturing) then Cuomo, De Blasio and Amazon will have no-one but
themselves to blame for it.

The secrecy around bids for HQ2 was already a joke, but the announcement for
NYC even more so: De Blasio and Cuomo basically just announced that it was
happening whether people liked it or not. Then said they were going to do an
end-run around the NYC city council to ensure it does. Some of the objections
to Amazon moving to Queens are legitimate and some are not, but you can't
blame residents for freaking out when a huge, huge change like this is just
dumped on their neighborhoods with zero consultation or warning.

(It should also be noted that the timing of this is probably not coincidental.
An outspoken critic of the Amazon deal has been nominated to the state's
Public Authorities Control Board, which has to approve of the deal. But he
hasn't been confirmed yet, so I suspect this is an attempt on Amazon's part to
stop that approval:

[https://www.nytimes.com/2019/02/05/nyregion/michael-
gianaris...](https://www.nytimes.com/2019/02/05/nyregion/michael-gianaris-
amazon.html))

~~~
jlangenauer
It’s worth noting that government placement of massive economic projects over
the desires or even well-being of local people is a feature of Soviet and
modern day Chinese economic systems.

And so it seems, American capitalism as well.

~~~
untog
I will say that I think there is a balance. NIMBYs hold back large-scale
development in a lot of area where it would be very sensible (high density
housing in SF, for example). But at the same time, the community ought to have
a say in a giant change like Amazon coming to town.

~~~
wbl
Who is "the community"?

~~~
subpixel
On all sides of Amazon's planned NYCHQ are a million+ people living in
neighborhoods that are predominantly working and lower middle class and that
skew towards renters over buyers. Them.

------
credit_guy
If HQ2 falls through, the history will remember the politicians who were
opposed to this as it remembers the board of Yahoo after it rejected the $50BN
offer from Microsoft: yes, high five all around right after you kill the deal,
but then you are the loser of the century.

25000 jobs at an average of $150k/year. State income tax is 8.8%, city income
tax 3.8%, state sales tax 4%, city sales tax 4%, property taxes, etc. You
easily take back in taxes 30k/year from each employee. That's 3/4 billion per
year. But then wage inflation in the whole tech sector, let's say 3% per year
for a few years, for 100k employees, that's about $100MM/year. Then the real
estate appreciation. We are talking millions of condos/coops going up in
value. Not a lot, but a little bit everywhere adds up. In NYC every apartment
sale over $1MM is subject to a 1% "mansion tax". You would see tens of
thousands of apartments changing hands. That's hundreds of millions of
additional tax revenue right there.

Well, I guess Boston is a nice city too...

~~~
alex504
Nobody informed is opposed to it because of the finances. People just don't
understand why we would want so many more people when gentrification and
overcrowding are already making life harder for everyone in the city. If 25000
people with jobs at over 150k a year decided to leave and go to Boston,
personally I would be excited.

A few things taxes can't seem to buy are lower rents and a public
transportation system that isn't completely overcrowded.

------
vincentmarle
Sounds like this HQ2 thing is becoming a complexifier for Bezos

~~~
dajohnson89
:-)

It makes you wonder -- had they not staged this whole HQ2 fiasco and just
chose a city and moved there (you know, like companies normally do...) --
would the move to NYC be more widely accepted?

~~~
addicted
Yes.

Google plans on adding more people to NYC than Amazon does.

They just didn't make a huge hue and cry about it, and have faced almost no
opposition.

~~~
gipp
It's not more people (6-8k I believe) but your point stands

------
ceejayoz
> “The Amazon transaction was probably the greatest economic transaction in 50
> years in this state,” Cuomo said in a recent radio interview. “We don’t get
> a business to come with 25,000 jobs anymore. I spend hours and days trying
> to get 100 jobs, 200 jobs.”

This sounds like a _severe_ waste of his time.

~~~
awakeasleep
I wonder what he could actually mean by this quote, unless it's an outright
fabrication.

NY, home of NYC, struggles to attract 100 person businesses? How am I supposed
to interpret that claim?

~~~
x1798DE
I wouldn't be surprised if it's true for parts of New York other than NYC. New
York is a very high-tax and regulation-heavy state. NYC is a big enough draw
to overcome that, but I don't think Buffalo is similarly attractive just
because NYC is in the same state.

~~~
j-c-hewitt
The way the sham works is to give the companies tax breaks and regulatory
easements and then to shunt the costs onto the employees. The employees bear
the NYS taxes and the companies connected enough to get exceptions reap the
competitive benefits.

------
syntaxing
Personally, I would like to work at this new "HQ2" but the political rhetoric
is pretty interesting to follow. Giving so much tax credit and incentive
doesn't really make sense to me (and not just this deal to Amazon, the deal to
Foxconn is even more baffling). $2.2 Billion for 25000 jobs is about
$88000/job. That is a lot of tax money we're using up. On top of this, Long
Island is a pretty occupationally diverse area to begin with. 25000 is a lot
of jobs, but not make or break amount for Long Island that everyone is making
it seem to be.

~~~
hessproject
Worth noting for people unfamiliar: Long Island City is a neighborhood in
Queens, a borough of NYC. While both Brooklyn and Queens are both technically
on the physical island of Long Island, "Long Island" generally refers to
Nassau County and the areas to the east.

------
Animats
Amazon is just whining because NYC won't cut them a sweetheart deal. There's
nothing stopping them from just buying or renting office space like everybody
else.

------
40acres
Fat chance of happening, but it would be interesting to see a 2020 candidate
run on the promise of convincing Amazon to put HQ 2 1/2 in a swing state.

~~~
murph-almighty
Put it in a district just outside of Pittsburgh with cheap housing, and there
goes PA.

------
quxbar
One part I don't see people is explaining: are the NYC tax breaks amazon is
getting out of line for the revenue they're bringing in? Cuomo is touting a
9-to-1 and that seems like a pretty sweet deal even if they're somewhat
fudging the numbers.

~~~
moate
Out of line with previous deals. Look at what wasn't offered to Google when
they bought/built their office

~~~
quxbar
Google is one data point, I'm asking what the average/distribution is. Do
banks get more? I can find some examples that point to this being normal:
[https://subsidytracker.goodjobsfirst.org/subsidy-
tracker/ny-...](https://subsidytracker.goodjobsfirst.org/subsidy-tracker/ny-
chase-manhattan-now-jpmorgan-chase)

~~~
vdnkh
That's a great source, and directly counters the "nobody else got subsidies"
argument:

Subsidies for NYS:

Subsidy Total: $34,026,482,575

Number of Awards: 127,154

Earliest year of data: 1980

------
gnicholas
> _the world’s most valuable company, led by its richest man_

AAPL ($801B) reclaimed this mantle recently; AMZN ($775B) is back to #2.

EDIT: why the downvotes? I'm not saying the sentiment is wrong, but it doesn't
look good for a news organization to get something like this wrong, especially
when they are owned by the CEO of the company that they are misreporting on.
It also tends to corroborate the pro-Amazon reporting bias that others have
expressed here.

~~~
jasallen
MSFT at $805B ;-) (disclosure, my employer, etc)

~~~
gnicholas
Touché. So Amazon is 3rd, unless someone else wants to jump in.

~~~
joejerryronnie
And after the divorce, Bezos won't be the world's richest man anymore. I
wonder if Bill just so happened to leak some compromising info to regain the
title!

------
btown
Cached link: [https://outline.com/4qM8rZ](https://outline.com/4qM8rZ)

------
ggggtez
I'm amazed it took three WaPo journalists and this still comes off as a biased
screed that could have come from the mouth of Bezos himself.

I mean, casually referencing Bezos as "the worlds richest man" instead of
calling him by name or title? Come on.

------
throwaway875u58
Can amazon reconsider the Crystal City site too?

------
Nelkins
As someone who lives in Long Island City, the opposition to HQ2 seems mostly
coming from a vocal minority. Sure, most people are not in favor of the tax
breaks, but they're also primarily in favor of Amazon coming in general[0].
There is so much misinformation about these tax breaks...so many people are
saying, "We're spending $3 billion! This is unconscionable!" without
understanding that NYC isn't actually going to be cutting a check to Amazon
and tax revenues will almost certainly be net positive as a result.

Really, the political posturing about this is bonkers. The local council
member, Jimmy Van Bramer, now says he is allegedly against this deal[1].
Here's his signature on a letter in favor of the deal just about a year
prior[2].

In my mind, the biggest problem is where we're going to put all these people.
I really hope (but am not holding my breath) that our local pols have the
courage to vote in favor of upzoning large swaths of the area to provide
enough housing for everyone. Otherwise the most vulnerable among us will just
get pushed further to the fringes.

I'm against tax breaks for special interests, as I think it is a prime example
of crony capitalism. I'm disappointed that Cuomo and DeBlasio offered any
argument besides "NYC is a dynamic city with a great talent pool and halfway
decent infrastructure for US cities." But the amount of fear-mongering,
inconsistencies, and falsehoods swirling around HQ2 really irritate me.

[0] [https://poll.qu.edu/new-york-city/release-
detail?ReleaseID=2...](https://poll.qu.edu/new-york-city/release-
detail?ReleaseID=2589)

[1]
[https://twitter.com/JimmyVanBramer/status/109317279168637747...](https://twitter.com/JimmyVanBramer/status/1093172791686377472)

[2]
[https://docs.google.com/viewerng/viewer?url=https://big.asse...](https://docs.google.com/viewerng/viewer?url=https://big.assets.huffingtonpost.com/athena/files/2018/11/13/5beb0912e4b0caeec2beaa08.pdf)

~~~
specialp
Yes it probably will end up net benefit for NYC but in any deal you have to
ask did we overpay? Google bought 111 8th avenue, one of the biggest buildings
in area in NYC, and also the premier datacenter location for 1.8 billion and
added a lot of employees. Tax break: 0. Facebook and other large tech
companies have also been expanding their staff in NYC for no tax break. NIMBYs
aside in the local area I am for Amazon coming to NYC along with any other
company. NYC is in effect cutting a check to them because now they are losing
revenue, and starting a precedent that was previously not needed to get big
companies here. The market conditions of NYC have attracted business just
fine.

~~~
Nelkins
I agree, the precedent being set is the worst part of this. And I do think
that we "overpaid," in the sense that this erodes any sense of trust and
fairness in NYC/NYS government (which I think is critical to a smoothly
running society). These tax breaks bolster the idea that political means are a
viable route towards a business advantage.

I was just expressing my frustration that the situation is being
misrepresented by many parties.

------
throwawaysea
I see comments bringing up comparisons between Amazon and other NYC employers
who are not asking for- or getting a tax break. But I think that comparison
doesn't mean much on its own...

The deal with Amazon is independent of what decisions other companies make.
Other companies may have different circumstances - with respect to financials
(e.g. profit margins), growth prospects, etc. Or maybe they are just bad at
negotiating. But either way, all the government has to do is evaluate the
incremental tradeoffs associated with making _this_ deal - is it a net benefit
or not? And both parties (NY or Amazon) can make their evaluations and accept
or decline accordingly.

Most negotiations take place with imperfect information and involve complex
assessments of the risks and tradeoffs of accepting/declining any deal. In
this case, the projected 9:1 ROI on the subsidies was too good to pass up and
public leaders made a decision that is probably correct.

I think the general public understanding of these subsidies is also very
limited, and the vocal minorities that have ruled the airwaves on this issue
have painted a false picture of how the subsidies are structured.

[https://www.governor.ny.gov/news/governor-cuomo-and-mayor-
de...](https://www.governor.ny.gov/news/governor-cuomo-and-mayor-de-blasio-
announce-amazon-selects-long-island-city-new-corporate)

First, note that $1.2B of the $1.7B of state benefits in this deal are from
the _existing_ Excelsior program. Numerous other employers are eligible to
apply. See details of program at [https://esd.ny.gov/excelsior-jobs-
program](https://esd.ny.gov/excelsior-jobs-program)

Many other companies have utilized this program. Take a look at this subsidy
tracker:
[https://projects.propublica.org/subsidies/programs/excelsior...](https://projects.propublica.org/subsidies/programs/excelsior-
jobs-program)

Note that other parts of the Amazon HQ2 deal in NY are also pre-existing:

> Under pre-existing as-of-right programs authorized by law, Amazon is
> eligible for a partial property tax abatement through ICAP and an annual
> credit of $3,000 for twelve years per eligible employee under REAP, a
> program available to all companies to encourage job growth outside of
> Manhattan. REAP benefits for Amazon's 10-year expansion are projected at
> $897 million through 2038, and ICAP will abate approximately $386 million.

Chances are, Google and Facebook and others are also going to take advantage
of all these generally-available programs. As far as I can tell, the $505M
capital grant from the state is the only Amazon-specific part of the deal.

------
FakeComments
I think the objection comes from perspective, more than anything:

What sounds like a Day 1 company?

\- Build a second HQ where there can actually be meaningful development, like
Raleigh.

\- Build two satellite offices in the most cozy-up-to-establishment choices
possible, NYC and DC.

Couple in the questionable deal making around choosing NYC, and it’s clear
where the frustration comes from: we want to see the same strength of
character leading Amazon as standing up to AMI.

The Day 2 satellites aren’t that, for a number of reasons.

~~~
murph-almighty
This is a pretty solid capture of my feelings about this. It is downright
weird to swing from "Amazon chose this place for money" to "Amazon's CEO is
standing up to (possibly) international cyberbullies" in the space of spending
like 20 minutes on HN. It's the disparate decision making processes that are
throwing me for a whirl more than anything.

------
sonnyblarney
"We want jobs"

"But we don't want clean, high paying high-tech information worker jobs!"

Nobody is suggesting the HQ2 NYC move it out of the goodness of anyone's
heart, and massive tax incentives are probably questionable.

But 'jobs' are the ultimate path to some kind of opportunity for people, and
the best tool against 'inequality' because it enables a much more fair
distribution of surpluses than arbitrary distribution.

This 'anti Amazon NYC' thing is making the classical socialist look really,
really bad.

If there are thoughtful changes to the program, great.

But otherwise, this is effectively as good as it is going to get.

------
skookumchuck
Ironically, the low-income community opposes high paying jobs coming to the
neighborhood.

~~~
kryptogeist
Sorry if I missed your point, but I fail to understand the irony here. As far
as I can tell, their concern is reasonable if you take in account that a new
influx o high paid employees might drive real state prices up (which in fact
could benefit some people) making rents skyrocket.

~~~
skookumchuck
First off, some of those jobs will be available to them. Secondly, having high
paid people around patronizing the other businesses in the area will help them
and their employees and families.

All you need to do is look at communities across America where the big good-
paying employer folded up and left town. It's a disaster for those
communities, not a boon.

------
blocked_again
Amazon should build their head quarters in Bangalore. Plenty of tech talent,
very low cost of living compared to USA, and no shitty visa policies. Not to
mention the 1.3 billion population of India which will soon sky rocket to 1.5
billion making it one of the biggest economies in the world. I guess even
Canada would be a better option because of their good immigration policies.

~~~
moate
1- This is boldly assuming they're trying to bring in immigrants. They likely
will, but they're also not nearly as concerned about getting those people
visas because if you can't get a visa, they can just select from other elite
candidates who can. 2- There's also plenty of bad things about Bangalore, like
the fact that the infrastructure isn't nearly as established as NYC. 3- NYC
offers immediate proximity to one of the nerve centers of global commerce.
There are hundreds of major multinationals based there, and that proximity is
valuable. 4- The US has the 3rd largest population behind China/India, so it's
not like they're lacking in bodies to fill roles. The size of the population
and the size of the economy aren't the same thing (India's GDP is currently
1/10th of the US's, despite having more humans living there).

~~~
blocked_again
1 - My idea of a starting headquarters in a country which dont have much VISA
issues was to help hire more diverse pool of candidates which is not limited
to the US citizens/people studied in USA.They can also do internal company
transfers but these things are mostly for people who are really good at
politics or that is what I heard.

2 - Yup. But people from India and Indian subcontinent are used to these
things.

3 - I mean Amazon already have a US headquarters.

4 - Yup. Indian economy is currently lagging behind USA. But its still a huge
economy. Maybe Amazons 2nd biggest userbase after USA and its heavily growing.

