The Detroit Post
Tuesday, 21 September, 2021

Amazon New York Deal Details

author
Ellen Grant
• Saturday, 09 January, 2021
• 7 min read

September 7, 2017, Amazon announced that it will build a second, 50,000-employee strong headquarters, and will accept proposals from cities who are interested in welcoming Jeff Bezos & Co. New York says it’ll throw its hat in the ring, with the state’s economic development arm saying it will do “everything we can” to win Amazon ’s attention.

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Contents

September 27, 2017, After soliciting proposals, New York City’s Economic Development Corporation (NYC EDC) announced that 23 separate neighborhoods have made the case for why they should become HQ2’s home. “The case for New York City is simple: we are the global capital of commerce, culture and innovation,” de Blasio said in a letter to Bezos.

The backlash began quickly; newly elected New York congresswoman Alexandria Ocasio-Cortez is among those who question the deal, namely the tax breaks and grants Amazon will receive to move to NYC. November 14, 2018, The first of many protests against HQ2 is held in Long Island City, with members of advocacy groups, unions, and elected officials all in attendance.

The meeting was, unsurprisingly, heated; opponents packed the gallery and unfurled a banner that said “NO TO AMAZON.” Meanwhile, council members interrogated the panel about everything from the promised tax breaks to the rumored helipad at the HQ2 site. December 18, 2018, StreetEasy released a report showing a spike in Long Island City home prices in the five weeks following the HQ2 announcement.

December 27, 2018, City Comptroller Scott Stringer asked the NYC EDC to submit specific information that would help him fact-check the assertion that Amazon ’s Long Island City development would provide a 9-to-1 return on investment, as well as breakdowns on the refundable tax credits Amazon stands to gain through the Relocation and Employment Assistance Program (REAP) and the Industrial and Commercial Abatement Program (ICAP). The move was widely seen as the state Senate’s attempt to exert some control over the deal, with Cuomo’s camp none too pleased by the appointment.

February 12, 2019 Pro-HQ2 voices attempted to bring attention to the project’s supporters, holding a rally near the Queens bridge Houses in Long Island City to make it clear that there are New Yorkers who’d welcome Amazon with open arms. “We have a cadre of residents that are standing behind us; all of which understand the potential of development of our communities,” Bishop Mitchell Taylor, one of the deal ’s staunch defenders, said during the rally.

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Among the many questions raised by the company’s abrupt about-face is what will happen to the site at Unable Basin, owned by Papal, that had been selected for the HQ2 campus. Andrew Cuomo gathered with other city and state officials to gleefully announce that they had sealed the deal, which includes just shy of $3 billion in subsidies.

Cuomo, the legacy-focused executive who prides himself on cutting deals and incentivizing private sector growth and job creation, was clearly delighted by the decision. For de Blasio, who ran for mayor in 2013 on a tale-of-two-cities message, the deal was in keeping with two of his main goals: his vision of making New York a five-borough city, not solely reliant on Manhattan, and creating high-paying jobs in the tech sector, which he says will benefit average New Yorkers.

(The GPP includes an environmental review and input from the City Planning Commission and local community board, though they’re nonbinding). It will receive an additional $505 million in a capital grant and $1.2 billion in “Excelsior” credits if its job creation goals are met.

It remains to be seen how much, if at all, the plan will be adjusted in the months ahead in response to concerns voiced by local officials and the community in the surrounding area. New York had pitched four locations as possible spots for HQ2 (Midtown West, the Financial District, LIC, and the so-called “Brooklyn Tech Triangle”), and it was named a finalist in January.

Still, HQ2 prognosticators did not have New York City as a front runner; the thinking was that Amazon would choose somewhere in the Washington DC area, where the company’s billionaire CEO Jeff Bezos recently bought a home. And the generous tax breaks, which the company will not receive unless they deliver jobs, were a necessary means of bringing it here, according to both men, especially given the high cost of doing business in New York and the competitive nature of the HQ2 process.

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“When Jeff Bezos needed $3 billion, the governor and the mayor found it sure damn quick,” Van Kramer said on Wednesday at a rally with other opponents of the deal. “The promised job growth and supposed positive impact of Amazon ’s expansion to New York don’t outweigh the major infrastructural, housing, and equity challenges it is certain to bring,” they wrote.

“It is a missed opportunity, but on the other hand, life will go on for both Amazon and Long Island City” in Queens, said Wharton real estate and finance professor Susan Water, who is co-director of the Penn Institute for Urban Research. Added Billy Riggs, management professor at the University of San Francisco: Amazon was looking at a lot of different things, and what they really got excited about was talent.” The two experts discussed what was at stake for both sides on the Knowledge@Wharton radio show on Sirius.

And public misunderstanding of New York ’s $3 billion incentive package to Amazon also played a big part in the break-up. “The rise of the progressives was happening.” Elected last November, the same month Amazon announced its second headquarters choice, was New York Congresswoman Alexandria Ocasio-Cortez, a Democratic socialist.

“Anything is possible: today was the day a group of dedicated, everyday New Yorkers and their neighbors defeated Amazon ’s corporate greed, its worker exploitation, and the power of the richest man in the world,” she tweeted. But CNBC anchor David Faber tweeted back that “NY forfeits a chance to become a major tech hub, loses tens of thousands of jobs and tens of billions of dollars in tax revenues that could fund programs you support.

As for Riggs, he said Amazon leaving “is a little of an urban regeneration missed opportunity 25,000 jobs is pretty significant. Riggs pointed out that it’s important to separate the politicization of the Amazon project with the beneficial use of tax incentives by municipalities to attract businesses.

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Water said Amazon should have engaged the local Long Island City community more closely during the negotiations. There aren’t many people there and fine strategy,” she said.

In comparison, Long Island City is a dense urban area where Amazon ’s expansion would have a much bigger impact on residents. Amazon could have looked at the example set by other companies such as Genetic, Google and Facebook, which have been more active in partnering with locals and even investing in these communities, Riggs said.

Water said Amazon, being “quite a sophisticated company” could probably have made a deal work, if it persevered through the issues. Perhaps adding an affordable housing component and upgrade of the impacted subway stations could have greased the wheels with locals.

Just two hours after a meeting with residents and community leaders to move the project forward, the company abruptly canceled it all.” Amazon decided to “take its ball and go home,” he wrote. For Amazon, Water noted, its decision to quit New York could be boiled down to this: “They don’t want to be held hostage anywhere.

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