
Amazon Reconsidering Plan to Put Campus in New York City - bretpiatt
https://www.wsj.com/articles/amazon-reconsidering-plan-to-put-campus-in-new-york-11549668969
======
reustle
Discussed here 9 hours ago

[https://news.ycombinator.com/item?id=19116064](https://news.ycombinator.com/item?id=19116064)

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mortenjorck
The WSJ story doesn't appear to add much of anything new, but it does at least
constitute some additional reporting from outside the complexifier.

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ardit33
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.

~~~
throwawaysea
Per this poll from 2 days ago, 69% of the public approves of HQ2 coming to NY,
with support across all demographic groups.

[https://harrisx.com/2019/02/new-poll-shows-overwhelming-
supp...](https://harrisx.com/2019/02/new-poll-shows-overwhelming-supp..).

\------

Other key findings from the poll include:

    
    
        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

~~~
ardit33
That's right.... nobody is denying that a large company creating jobs, is a
bad thing. People are upset for the large subsidies.

the "Do you believe NYC should give 3B+ subsidies to Amazon"

Or, "Do you believe NYC giving 4 times the subsidies to Amazon, compared to
D.C., is a good deal?.?

are missing. Put them into the questionnaire, and see how the response rates
change.

~~~
benregenspan
And indeed, the full survey results (linked on the bottom of
[https://harrisx.com/2019/02/new-poll-shows-overwhelming-
supp...](https://harrisx.com/2019/02/new-poll-shows-overwhelming-support-
among-new-yorkers-and-queens-residents-for-amazons-new-headquarters/)) 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.)

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bduerst
[https://outline.com/KECmzd](https://outline.com/KECmzd)

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throwaway2048
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.

~~~
whoisjuan
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.

~~~
count
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...

~~~
throwawaysea
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](https://esd.ny.gov/excelsior-jobs-program)

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throwawaysea
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.

[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)

~~~
kerkeslager
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.

[1] [http://www.coalitionforthehomeless.org/basic-facts-about-
hom...](http://www.coalitionforthehomeless.org/basic-facts-about-homelessness-
new-york-city/)

~~~
throwawaysea
> 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.

~~~
kerkeslager
> 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?

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rblion
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.

~~~
reneherse
Traffic levels and public transit aren't good here, which was one of the HQ2
requirements. Great city otherwise, however.

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narrator
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.

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m23khan
Toronto says Hello!

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vaadu
He should relocate the jobs to Virginia with the Crystal Project. I live in
Northern Virginia. For $750M we should get it all.

