Amazon Pulls Out of Planned New York City Campus (nytimes.com) 365
As expected, Amazon said on Thursday that it was canceling plans to build a corporate campus in New York City [The link may be paywalled; alternative source]. From a report: The company had planned to build a sprawling complex in Long Island City, Queens, in exchange for nearly $3 billion in state and city incentives. But the deal had run into fierce opposition from local lawmakers who criticized providing subsidies to one of the world's richest companies. Amazon said the deal would have created more than 25,000 jobs. Amazon's NYC educational investments will continue.
Amazon's statement: "After much thought and deliberation, we've decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City. We are disappointed to have reached this conclusion -- we love New York, its incomparable dynamism, people, and culture -- and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams."
Good government management (Score:5, Insightful)
Re: Good government management (Score:2, Insightful)
It wasn't subsidies. There's an important distinction between being paid, and incentives that mean you pay less.
One puts the onus of failure on the tax payer, while the other still requires the business to be successful.
In their rush to be virtuous and socialist, New York forgot that we are, and will always be, a capitalist nation. Tens of thousands of New Yorkers lost a golden opportunity to make billions of dollars for themselves and their community.
This is not something to celebrate.
Re: Good government management (Score:5, Insightful)
There's an important distinction between being paid, and incentives that mean you pay less.
There is indeed. But both are wrong. There should be equality before the law, even for businesses. One business should not be taxed to fund tax breaks for another "more worthy" business.
In their rush to be virtuous and socialist,
Only some deal opponents were socialists like AOC, who objected to the handouts to a rich company, although she doesn't object to handouts in principle. But many more objectors are free market capitalists, who don't think the government should be "picking winners". It was an alliance of left and right, standing together to oppose corporate welfare.
This is not something to celebrate.
Yes it is. Hopefully other locales will learn a lesson from this, and these corrupt handouts can stop.
Re: Good government management (Score:5, Interesting)
Re: Good government management (Score:5, Interesting)
For the same billions, they could probably attract hundreds of smaller companies that would have far more impact on the city.
Exactly. What NYC should be doing is improving their overall friendliness to commerce. Better transportation infrastructure, fewer restrictions on the construction of housing, fewer petty regulations, and a more streamlined bureaucracy. It should not take six months and 17 forms to open a taco stand, and nobody should need a license to paint fingernails.
Many growth friendly policy changes would cost nothing. Others, such as infrastructure improvements, would be expensive, but are badly needed, and will benefit the city for many decades to come.
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So make smaller companies pay the taxes while amazon make the $$$
The point is not to prevent Amazon from making money. The point is to prevent Amazon from being a drain. Not making them pay their fair share only means that everyone else pays their share while they profit.
Re: Good government management (Score:3)
Also, a smaller company probably can't afford to hire expensive Ivy League lawyers to pass suitcases full of cash to city councilmen in a dark parking lot.
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There's an important distinction between being paid, and incentives that mean you pay less.
There is indeed. But both are wrong. There should be equality before the law, even for businesses. One business should not be taxed to fund tax breaks for another "more worthy" business.
What does "fund a tax break" mean? They aren't writing Amazon a check. They are collecting less from them.
If a mugger leaves the cash in your wallet do you consider that some kind of gain for you? It was already your money.
Just the *news* of the new headquarters had started an economic boom in Long Island City. People were buying apartments, developers were planning to build, new businesses would have been created. Long Island City isn't car friendly, these would have been jobs for locals (including wor
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What does "fund a tax break" mean?
It takes money to run a city. If Amazon is paying less, then someone else is paying more.
If a mugger leaves the cash in your wallet do you consider that some kind of gain for you?
Getting mugged happens randomly. We should be making our tax system less like mugging by having fair and uniform rules.
People were buying apartments
For every buyer, there is a seller. What you are really saying is that prices increased from their already sky high levels.
developers were planning to build, new businesses would have been created.
Developers in NYC are always planning to build ... and their building permits are denied 90% of the time. If NYC wants more construction and more businesses, they don't need to
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Or the net benefit Amazon brings far exceeds the amount they aren't paying.
By some estimates the net benefit was $0.
By some estimates the net benefit was $27 billion.
Do you also believe in the Easter Bunny?
Robbing Peter to pay Paul sounds great if you are Paul. But the net benefit is zero. Or even negative if Peter moves away because he keeps getting robbed.
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Or the net benefit Amazon brings far exceeds the amount they aren't paying.
By some estimates the net benefit was $0.
By some estimates the net benefit was $27 billion.
Do you also believe in the Easter Bunny?
Robbing Peter to pay Paul sounds great if you are Paul. But the net benefit is zero. Or even negative if Peter moves away because he keeps getting robbed.
I'm sure with your deep knowledge of New York finances and your rigorous study of the project economic details your analysis is more accurate than the one from the Governor of New York's office: https://www.governor.ny.gov/ne... [ny.gov]
"Amazon Will Create 25,000 to 40,000 New Jobs with an Average Salary of More than $150,000, Invest More Than $3.6 Billion Over 15 Years and Create $27.5 Billion In Tax Revenue Over 25 Years"
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This subsidy was Governor Andrew Cuomo's baby. He was heavily invested in it.
He even offered to change his name from "Andrew" to "Amazon Cuomo".
Nobody on the planet is going to be less objective.
He has less credibility than a NYC Bowery bum to be making forecasts about it.
By quoting him, you are saying much more about your own judgement and gullibility than about the supposed benefits of the subsidy.
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It's a distinction without a difference. Somebody was going to be paying for the infrastructure Amazon needed to maintain an HQ in New York, If not Amazon, then everyone else.
Here's a thought experiment for you: New law, groceries and health care are now free to all comers. It's not like anyone is losing any money on the deal, they're just not making people pay anymore.
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Corporations should not go places that offer subsidies, since if you get a subsidy this year that means you are paying whoever gets a subsidy next year.
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But the economic benefit was estimated to be tens fo billions for the city?
Only if you ignore the alternative businesses that get squeezed out or never created, because of high taxes, high rents, and lack of available workers.
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And now some other city will give them what they want - and Long Island will be out of luck on this one.
Out of luck? They were about to spend $120,000 per "new" job created, so it is far from guaranteed Long Island would have benefited. Long Island has a 3.8% unemployment rate, so I doubt it is hurting for new jobs. The New York City area is probably not hurting for businesses to locate there. Spending that $3 billion on more affordable housing would probably do far more good in attracting businesses by giving them more access to employees.
Re:Good government management (Score:4, Insightful)
They were never spending $3B. They were refunding $3B worth of the taxes Amazon would have paid. Too many stupid people commenting on something they don't understand.
Re:Good government management (Score:4, Insightful)
They were never spending $3B. They were refunding $3B worth of the taxes Amazon would have paid. Too many stupid people commenting on something they don't understand.
Try to get your facts right before calling others stupid. New York City and New York State were providing a combination of tax credits, grants, and other assistance such as shared spending for infrastructure projects. It was certainly not $3B of just tax breaks. Tax breaks certainly are preferred over grants, since less money is lost if the jobs don't materialize and less money is spent up front, but in the end it is still revenue lost for spending elsewhere.
In some Midwest town which is hurting for jobs, the argument that these Amazon jobs would be "net new" jobs is more compelling. But New York city has little problem attracting jobs; it has more problems funding infrastructure problems or offering affordable housing. The Amazon deal certainly could have been a good thing overall for New York (I originally said it just wasn't a guarantee Long Island would benefit), but the deal itself left a lot to be desired. Considering Maryland offered $6.5 billion more in incentives than Virginia at a location 20 miles away, but still lost, shows how little Amazon was using these incentives in its decision to locate their headquarters.
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Now find the damned umbrella.
They would be writing 3 Billion in checks, to cover waste removal, sewage, road improvements, etc etc etc.
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Just a quick distinction.This was not Long Island, it's Long Island City, in Queens, not on Long Island. Probably not important to non-New Yorkers, but LIC is a 20 minute train ride from Manhattan, Long Island is longgggg train or car ride.
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My mistake, good call out. As you could obviously tell, I'm not familiar with the area.
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Only to have that other city, to over promise, and run in server debt for decades, by the time they break even, to have Amazon move out. Leaving the town an expensive infrastructure, without a tax base to hold it.
Re:Good government management (Score:5, Insightful)
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And they'd still have half a billion dollars left over.
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Correct!
$50k/year * 2 years is $100,000. Times 25,000 workers is 2.5 billion. That leaves $500 million left over.
Re:Good government management (Score:5, Insightful)
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Try and live in NYC on $50K.
Indeed, $50,000 seems not enough to survive in New York for a month.
Re:Good government management (Score:4, Insightful)
Keep in mind most of those amazon jobs would have been for a LOT LESS than $50k. They too would not have been able to live in nyc.
Re:Good government management (Score:5, Informative)
The median salary in NYC is $50,711.
Most do (Score:2, Insightful)
Of course it's down $4k since 2009. The working class never did recover from 2008. And best of all we're heading into another (self inflicted) recession. Hooray.
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Re:Good government management (Score:5, Informative)
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You don't have to live in a 5th Avenue Manhattan apartment to live in New York.
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if living in your parents basement, maybe. Or in an apartment with roommates stacked like firewood.
Re:Good government management (Score:5, Insightful)
Problem is it's not $3bn in cash they have handing over, it's $3bn in tax they are not going to collect.
You can't pay people with tax you would have collected if Amazon had come to town.
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Re:Good government management (Score:4, Insightful)
That incentive was savings on tax revenue Amazon would have paid if they built in the area.
Since Amazon isn't coming to the area, not only are they out any tax revenue that Amazon would have generated, but any potential Tax revenue generated by the hired employees.
Unless they find another 3 billion dollar revenue generator, they get nothing but what the current property generates. probably a few million tops.
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Or, NYC could take that $3 Billion dollars and hire 25,000 workers with $50K annual salaries for two years to rebuild and modernize the city's subway system which will provide much greater and longer term economic benefit to the city than an Amazon office building.
NY wasn't writing Amazon a check for 3 billion dollars.
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No, they can not do this because New York City doesn't run the subway. New York State does.
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Found the guy who has never been on the NYC subway.
Hint: it's already a smoking sewer run into the ground by incompetent management, chronic underfunding, and decades of deferred maintenance.
Re: Good government management (Score:5, Informative)
Actually NYC cleaned itself up in spite of efforts by both political parties. The decline in violence and poverty mirrored that of the rest of the country without regard to political affiliation.
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The decline in violence and poverty mirrored that of the rest of the country
Actually, the decline in crime in NYC preceded the national decline by several years. Steven Levitt of Freakonomics attributed it to New York State legalizing abortion years before RvW. This hypothesis is not widely accepted, but the actual reasons for NYC's earlier and deeper decline in crime are not well understood.
Place it where they need it (Score:5, Insightful)
Re:Place it where they need it (Score:5, Insightful)
I've always said if Amazon wants to be really beneficial and transformational, place their HQ2 in a rust-belt city.
Bezos doesn't own a home in a rust-belt city. Unlike Washington, DC or NYC.
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Comment removed (Score:5, Funny)
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Nah, he'll just Amazon Prime bottled water in for next day delivery, then curse when it fails to arrive and he can't flush for three days.
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Nah, he'll just Amazon Prime bottled water in for next day delivery, then curse when it fails to arrive and he can't flush for three days.
Nah, he'd just RO all his water, and never miss any high usage fees he paid as a result of pissing 6-12 gallons of water down the drain for every gallon filtered.
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I've always said if Amazon wants to be really beneficial and transformational, place their HQ2 in a rust-belt city. NYC is fine, they are millions of jobs and a high cost of living. Places like Cleveland, Indianapolis, Pittsburg, etc. need the jobs and would be very supportive to Amazon.
They just don't have the deepest pockets. Amazon's goal was never to be beneficial or transformational. It was to make more money (by saving more money in this case).
Re:Place it where they need it (Score:5, Interesting)
I've always said if Amazon wants to be really beneficial and transformational, ...
Stop right there.
Like most companies, Amazon is only interested in maximizing their profit. They won't say that, of course, because their expensive PR teams tell them how stupid it would be. So they spend a few million putting together a BS spiel about being beneficial and transformational - what's a few million against three billion dollars in taxes they won't have to pay?
The real problem is - the local governments buy into the lie hook, line, and sinker. They turn around and tell people Amazon is going to create 25000 jobs, which will be filled by local people. They keep a straight face while they eloquently speak of the billions of tax dollars the local economy will be gaining due to these new positions. Of course it's in their interest to do all this, because they are politicians and need lies like this to prop up their future campaigns.
Local gov'ts don't buy the line (Score:5, Interesting)
It's just another example of the rich plundering the commons. Robert Reich calls it a Switcheroo [youtube.com]. It's older than that though. We used to say "Privatize the profits and Socialize the losses".
Re:Place it where they need it (Score:5, Interesting)
It would be nice to live in a place where a 900 square foot condo doesn't cost a half million dollars..
Austin suburbs are still relatively affordable, as is Nashville, Atlanta, Pittsburgh, and pretty much any Rust belt location.
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A rust belt city doesn't have tons of money (Score:5, Interesting)
It's like a sports stadium without a team to watch. It doesn't make sense to pay companies to bring jobs. Spend the money making your state somewhere people actually want to live and the companies will have no choice but to bring the jobs because that's where the workers are.
Now, you're right that this is leaving middle America behind [youtube.com]. They haven't been investing in their land or their people and they're feeling it. Part of me, the bitter, angry part, wants to leave them to their fate (it's mostly their own political decisions that got them there) but the sane part of me knows that's bad juju for all. Folks usually double down on bad decisions in a crisis. Better to have the Fed move in with jobs programs like we did the last time things got this bad. That's what the "Green New Deal" is for.
Bottom line, Amazon's pushing Supply Side (aka Trickle Down) economics on NY (pay us for the jobs and the money you give us will trickle down to workers). NY was smart enough not to buy it for a change. Here's hoping the rest of the country will tell Amazon to go pound sand and they'll have to pay for the services they want and need.
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Re:Place it where they need it (Score:5, Interesting)
Land costs are so much less, Amazon wouldn't need 3 billion. Plus, since real estate costs are so much less the pay ongoing for employees would be lower. Granted an influx of 25,000 employees would increase city costs in many ways (schools, roads, utilities, and would temporarily spike house costs). Still, they are unlikely to come anywhere close to costs of living in NYC.
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... schools, roads, utilities ....
There aren't any of those that are worth a shit.
NOT giving Amazon money, taking less tax revenue (Score:2, Insightful)
But they can't afford to give amazon $3 billion in tax breaks
They are not giving Amazon money, they are receiving less tax revenue. Now they receive zero tax revenue. That is a net loss of revenue.
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Sounds a bit like those self-entitled "influencers" who figure they should get a free meal at the restaurant because if they decide to blog about it, it'll be worth bajillions...
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Wish I had mod points for you. I'd never relocate to someplace in the Rust Belt where, if the position doesn't work out, I'm then stuck in the fucking rust belt. It's not like there's other prosepects. I'd never relocate for a job to a location where it's the only viable option.
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Right after Facebook dons the cloak of ethics.
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Idiots! (Score:2, Insightful)
And no, I'm not identifying who...
Well, what did you THINK would happen? Idiots..
Re: Idiots! (Score:2, Insightful)
They thought they would take advantage of New Yorkers, the toughest, meanest, shit-throwing bilkers in the country.
Not any more.
...and the horse you rode in on! (Score:2)
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Is it just me, or can you hear them shouting that (and gesturing)?
I'm hearing the sounds of hot tar and feathers myself...
FoxConned (Score:3, Insightful)
Good for them.
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Citizens figured out that skyrocketing housing prices resulting in increased homeless, gentrification, and billions in tax payer payola
But, you are describing current New York. No Amazon required.
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Phrase it differently... (Score:2)
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If Bezos was determined to build something in NYS, Buffalo, Syracuse, or Rochester would have been a better fit. Cost of living is lower, there's land available and they are connected to the interstate system.
I bet it's also the new tax law effect (Score:5, Interesting)
I bet also they realized it was going to be even more expensive to have employees in NYC due to the new Fed tax law. Higher tax states like New York have become even more highly taxed due to the cap on the state level income tax deduction from federal taxes (SALT).
https://nypost.com/2019/02/13/... [nypost.com]
Re:I bet it's also the new tax law effect (Score:5, Insightful)
Thank god, it should have never existed. It just means those in states with no or low income tax are subsidizing those that live in places like NYC or CA. Now maybe those people will realize how much all their taxed out the ass govt programs cost.
Too simplistic thinking on your part. The high tax states contribute far more to the federal tax budget that the states with no or low state income taxes. For example, NY sends $38 billion more to the federal government than it gets back.
Re:I bet it's also the new tax law effect (Score:4, Insightful)
Here is a recent write up
https://www.ny.gov/programs/ta... [ny.gov]
the law disproportionately hurts “donor states,” like New York, which already contributes $48 billion more annually to the federal government than it gets back. You're no income tax states that you say are subsidizing high tax are NOT, in fact they are sucking down from the fed gov more than they contribute.
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Per capita, North Dakota has an even higher "give" rate than New York. North Dakota is not known as a "high tax state", so why do THEY contribute so much more to the fed than other states?
Per capita, seriously? You can slice and dice however you like to make it look better, but NY and other states contribute FAR more in total to the fed budget than North Dakota.
Fact is infrastructure costs money, North Dakota is a state with mostly nothing in it to maintain, and it's population is minuscule at 760k versus 19.5 million in NY state. This number difference massively skews the analysis to make it ND better on a "per capita" (i.e. you're dividing with a very small number versus a VERY large numbe
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One other thing, ND GDP is $49.77 billion. NY State is 1.547 trillion. ND is a rounding error for NY state. But keep telling using the per capita number so you believe ND citizens are contributing more...
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Do you have a source for that? This source [money-rates.com] says that New York's per capita federal tax is $8,849.66 and North Dakota's is $6,690.84. Doesn't seem like such "simple terms" to me.
fuggettaboutit (Score:2)
Good for NYC (Score:5, Interesting)
I have to pay for roads and schools, let Amazon chip in. Last I heard they're the most profitable company in history (unless Apple's got it this week).
Amazon has grown too large (Score:5, Interesting)
Tax subsidizing a business is a bad idea (Score:2)
A company with Amazon's riches shouldn't be looking for direct subsidies for a location. Any city that forks over $3 billion to a company locating there is going to expect some degree of control. In a place like New York, a lot of this control will come from yammerhead activists, including Scary Teeth Lady herself in this case, pushing their favorite lost causes. They would probably unilaterally demand that the Amazon center be powered by unicorns.
Haven't cities had enough bad experiences with sports teams
NYC dodged a bullet (Score:3)
It's a scam (Score:2)
Now it's shop for the best incentives, and when those run out jump to someplace else for more incentives.
Even worse, they then write off the site they dumped on taxes for even more of a bonus.
From the viewpoint of the companies, staying in one place is financially stupid.
In other words, they didn't get enough handouts (Score:2)
"For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term." Right. That's bafflegab for "we couldn't get enough handouts and special concessions". Which they shouldn't be getting anyway.
New Metric required (Score:5, Interesting)
Jobs might have meant something back in the day - but the word has been mangled so completely it could mean "well paying blue collar work" or it could be "third shift, part time apprentices who have to pay for their own uniforms"
How about instead we expect a "wealth" metric like "We plan to employ X million dollars of employees"?
"Wait....we we're giving you 1 billion/y in tax breaks, and you're only bringing in 1/2 billion/yr in wealth......"
Comment removed (Score:5, Insightful)
There was NO GIVEAWAY of money (Score:4, Insightful)
It's honestly anti billion dollar government giveaways. ... Most of the opposition is about giving away billions of dollars in tax credits to a company that already has billions of dollars!
There was no giveaway of money, no money was leaving the pockets of NYC government. What Amazon was getting was a lower tax rate, gov't revenues would be lowered. But now the government's revenues will be zero. That is a net loss for government. That was an awfully expensive political statement to make.
Re:There was NO GIVEAWAY of money (Score:5, Insightful)
Granting the tax break is far, far more expensive.
If the amazon deal is so lucrative, why don't we just give that tax break to every single company that operates in the city? The simple answer is because amazon, and any other company present, costs the city money. Infrastructure has to be maintained, city services have to be provided, etc. All that shit costs money.
If the taxes they collect with the deal aren't enough to cover the expenses of Amazon, then you're just creating a ponzi scheme, with other people stuck picking up the tab.
Re:Lol (Score:5, Interesting)
The thing that bugged me is that New York City has a huge economy by itself. Those Amazon Jobs wouldn't put a real dent in the local economy. Now if they were 100+ miles in upstate, then those would be a big benefit to the local economy.
Metro NY shouldn't have to bend over backwards for Amazon for a fraction of a percent increase in its local economy. While a small town, say a post industrial town, Amazon could bring in new life.
I hoped that Amazon got a lesson from this, that even though you are a big company, don't expect everyone to bend over backwards to kiss your butt.
Re:Lol (Score:5, Interesting)
The whole HQ2 thing was a scam to begin with. Good to see NY rejecting the con. Opening 2 HQs next to Bezo's other 2 houses was so blatant, I'm amazed he thought it would fly.
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You think being near 2 houses was Bezo's reason to go there? Wherever Amazon goes Jeff can buy 10 houses from his pocket change, I doubt anything that trivial to him could exert substantial influence.
There were no "conservatives" involved (Score:4, Insightful)
Those subsidies were offered up by Democrats Andrew Cuomo and Bill De Blasio.
Jeff Bezos gives money to Democratic candidates [washingtonpost.com], not Republicans.
Where are the "conservatives" in the story?