The New York Times is reporting that Amazon is pulling out of New York. Amazon does not plan to find a new location to replace the New York City campus, opting to only stay in Virginia, which is a bit of a win for DC.
Thoughts?
Trending Content
| +81 | GF doesn’t care about her looks | 49 | 8h | |
| +50 | Affair with my Associate… In Desperate Need for Advice | 23 | 23m | |
| +39 | Insurance as High Finance? | 10 | 1d | |
| +38 | 400k/year in HVAC sales? | 26 | 20h | |
| +38 | How to sound more eloquent? | 14 | 4s | |
| +33 | Would you rather live alone in an outer borough or with roommates in Manhattan? | 23 | 1d | |
| +27 | Why do people listen to Jim Cramer Investing Advice? | 10 | 2h | |
| +26 | Is my boss gaslighting me? | 3 | 2h | |
| +25 | Carnivore Diet | 9 | 3h | |
| +25 | WSO Ranking On Resume??? | 6 | 1h |
Career Resources
The NY politicos don't want to lose that small town feel.
Jeff Bezos’ pull out game is strong
Amazon pulls out but I don't
,
Politicians can't let their citizens improve their lives too much, less the citizens start becoming independently minded and self-sufficient. Need to keep the ideological machine running and us-vs-them identity politics fueling the local politician, who by the way never seems to be suffering as much as their constituents.
Damn NIMBYs.
Any day corporate welfare loses is a good day.
Funny troll. Long Island definitely lost on this one.
Long Island may have lost but the tax payers won. The corporate welfare package was obscene—the state and city would likely never recoup that “investment.”
Is NY going to lose some share of economic growth because of this? Yes. Do we know what the distribution of that growth (positive and negative, as well as by class) would have been with any certainty? No. As a matter of principle, should governments be giving massive tax breaks to certain companies just to woo them into locating there? Absolutely not.
Good for Amazon to show resilience. The local government's resistance now would be only a taste of what's to come. Companies need a good partner in government in order to grow sustainably -- need the support of government to fund schools, training programs, infrastructure (parking, roads), police, etc. If government doesn't shape up and play ball, you'll see more companies leave ala Detroit's mass exodus.
I'm not as ideologically opposed to local government incentives for companies. You're either going to get it above-board in tax breaks or under the table in grift. That's how it works in reality and it always has worked that way. Is it corruption or just competition? If government is a group of citizens, those citizens should be able to choose how to attract companies to locate there to provide jobs and growth opportunities. This happens at the state and national level as well - Texas' tax policies as a whole have attracted companies from California at the cost of tax revenue, and similar for the USA as compared to Europe, etc. New global reality where MNCs are more effective and powerful than governments.
Once the activism started against Amazon, I had a feeling this might come. It felt like the price for NYC was a lot higher to get Amazon there than for the DC area. Probably just a rebalancing, all said and done.
This is a huge missed opportunity for NY. It was also hugely popular amongst New Yorkers of all stripes. While I'm not a fan of subsidies to attract jobs, they're only really subsidies if you get nothing in return. It's not like NY was giving Amazon $3B in cash and was getting nothing in return. It's not like the Foxconn deal in Wisconsin (which absolutely sucks). This deal made financial sense. Even if the math on the $27 billion in tax revenues over 25 years is a bit fuzzy and you lop off $10B from that figure to have a more conservative estimate, the ROI is still compelling. That's not true of the Foxconn deal.
And what were the arguments against it? It wasn't really about the $3B in subsidies. It was about the gentrification of the area. The high paying jobs would bring a change to Long Island City, and while that would be great for most people, it wouldn't necessarily be great for everyone. Middle-earning renters would probably have to move. For homeowners, an influx of money, jobs and development is great. For people living in rent stabilized apartments, the situation probably gives them greater access to some of the service-based jobs created as derivatives of the Amazon jobs. For commuters, the subways would be more crowded, but there would be more money to spend on the subways as well. And you can be sure that Amazon employees would have more pull on average than the current residents of LIC, so their complaints about congestion and the overall shitty conditions in the subway would be heard more loudly than those of the current residents.
There is no way to know precisely what would have happened with the Amazon move, but we can surmise it would have created a great deal of jobs in the area which will now certainly not be coming to the area. I hope they relocate those jobs to Nashville or St. Louis or Indianapolis. There are hundreds of other cities that would kill for 25,000 high-paying Amazon jobs and the corresponding gentrification that come with them. What a tremendous fuck up for the short-sighted politicians who caused this.
I suggest we use the $3 billion we 'saved' and use it to build a new Colosseum so we have an arena to feed those politicians to the lions.
Yes, and the coup de grâce is that $3 billion in "saved" money from tax breaks minus the fact that LIC will no longer be getting any incremental tax revenue from Amazon = $0 in savings. Cancel the Colosseum, bring the guillotines to the streets.
You never fail to give strong insight my friend haha. I'd love to see those jobs go to some of the economically stagnated places in the northeast/midwest that in population decline. While I remember thinking Gary was a by all means quite a stretch for obvious reasons, I also thought, "well what about the Pittsburgh Metro, Central/Western Mass, the Lehigh Valley, or parts of NY not in the city, or what about Ohio or even Chicago (which could due to proximity help the Gary area)?"
Idk, I really wish these jobs could go to places like that. My family is from some of the aforementioned regions and its gotten tough there. I know neither Amazon or any politicians would push too hard for this kind of investment, but it sure could help a lot of people if they did.
The point you're missing is the blatantly anti-competitive nature of specific company favoritism by states' fiscal policy
Well, I guess they could be more subtle about it but at the end of the day, of course states, cities and neighborhoods compete fiercely with various policies to attract specific companies over each other. Amazon HQ2 is an anchor tenant and could change the entire course of a city/neighborhood's history. I wouldn't be surprised if this trend accelerates in America as companies leave for lower-cost cities, consolidate locations, etc.
+1 for the new Colly
amen
I'm by no means a tax policy expert, but $3b over 10 years is $300m / year. Amazon would bring 25,000 jobs to the area, which means NY is subsidizing approximately $12,000 / employee for 10 years, right? Seems like an incredible investment. Bringing a huge company like Amazon to a middle / low income area provides the community with an option other than minimum wage, and inspires the kids growing up across the street to get an education and work for the dream company that took a chance on their neighborhood
I'm not sure how to feel about government subsidies to large companies. It makes it harder for smaller companies to compete but at the same time there are loads of programs set up by the US government for that too.
Three major mistakes that I think lead to this:
1) Amazon shouldn't have dragged the nation through this dog and pony show that gave false hopes to struggling midsize cities that really need this. And in the process it only magnified the perceived changes that could come for wherever they selected, positive OR negative. You didn't see Google or Facebook do this and they managed to expand massively in NYC without much noise or opposition. Now for the people who believed they were going to face those negative impacts, there's this...
2) Amazon did a terrible job of demonstrating how they were really going to ingrain the local community into their plans. The entire move and their proposed plans seemed all about Amazon, which you could chalk up to bad PR but honestly the details in the deal seem to support this. The few million they promised to allocate to training and education programs for the local population, especially in Queensbridge, was insultingly pitiful in light of the size of this deal and proposed subsidies. IMO this fed the narrative that Amazon coming to LIC was only going to benefit the company and lucky newcomers who scored high paying jobs there, while offering little to local residents. The local politicians who derailed this were voted in by those residents. This is partly the city and state's fault too for not negotiating harder on the behalf of current residents when forming the deal.
3) In light of the shit show that NYC's public transportation has been going through, the least the city could have done (maybe jointly with Amazon) was simultaneously release some sort of transit improvement plan for that area. Vague promises are not enough here due to the awful track record of MTA funding and improvement plans.
As a NYer working in CRE I agree that this was a missed opportunity, but not with the way the deal was going to go down. The vague and close guarded nature of this entire process, including the few details and plans in place when it was released, had me on edge a little. And I think with time the city would have put in so many protections (thanks to the unnecessary hype on Amazon's part) that upside would have been limited. After all, in low and middle income areas, you can only jack up rents so fast and build so many buildings before tenants and the city hit back in one way or another, and that's what Amazon didn't foresee going in. They needed to give a little more.
But in the end, as an American and not just a NYer, I don't think this should have even come to NYC in the first place. Though at the end of the day Deblasio and Cuomo are going to be the biggest losers from this. It blew up in their face and I think it will play a major part in effectively ending their political careers once they're out of their respective offices.
Dragging the nation into a dog and pony show is a pretty smart tactic to put pressure on the politicians. Basically as company you explain to people the benefits that you will bring, and put the ball on the politicians court, shifting blame towards them in case the deal doesn't go through.
Maybe Amazon won't see as much of a fallout politically and PR wise. But from orchestrating this the way they did and being overly aggressive they lost what was, which I agree with Bezos on, their best option from a business standpoint.
How are the real estate guys taking this?
Deal was profitable for NY, not surprised it fell through lol.
We all know plenty of other cities would gladly take the jobs and gentrification that comes with them.
So sick of AOC and her cohort, she praised Amazon not coming to NY and stated that the $3 billion the govt. "gave" Amazon can be used for education and "investing in citizens"... which I am 100% sure by now she knows is a lie. She knows that's not how the math works smh. I am glad Amazon decided against NY. Hopefully they come down to TX.
100% this - there is no "$3B saved to spend on other things now". There's zero.
Sure there is. New York is free to lower the tax burden by $3 billion and let the free market determine which companies end up where.
She genuinely may not.
You are probably right. She barely knew how to make an espresso before she left starbucks 6 months ago. But this is the new world we live in, reality TV stars in the white house and barely educated baristas in congress.
Nah man, after her initial comments on the subject (some inane tweet), you could assume she didn't know at the time. But given the backlash and stories written after that tweet, there is no way she isn't aware. Instead of pulling back/amending her statement, she is choosing to push the falsehood like every other politician.
She said they were taking the money from schools and firefighters, AOC = JFC
Feel bad for all of those developers who thought they got a huge windfall, spent money on spinning up their projects and now are getting screwed. It is going to have an impact on the grip of the local politicians. The real estate people have the most political power in NYC, significantly more than even bankers do.
Personally thought it was foolish for anyone who may have snapped something up at a premium so quickly. This has only been announced for a month or two and the details were always murky. Besides, LIC has been dealing with a bit of an overbuilding issue as is and I think the idea was that this would fill a lot of existing vacancies in new developments. The guys who were already building or own with high vacancies prior to the announcement, who for a moment thought this might be a saving grace, are the ones who I think are deservedly the most frustrated.
I always say though, real estate in NY is not about predicting the next boom or hot neighborhood, it's about surviving the bad times, the rest will take care of itself.
I am not talking about people who bought after the announcement, I am talking about firms that bought ahead of the announcement who were looking for the bump. Much of the focus was on distribution infrastructure plays from what I could see and those guys paid inflated prices for things that would only work if HQ2 was in NYC.
The weird thing is, Bezos hasn't been heard from or seen since this dropped. Then you realize it was Valentine's Day, and he and exotic mistress Lauren were probably doing weird Bezos sex stuff all day.
She's his "alive girl" after all
The leader of idiots is rarely an idiot. , regardless of puppet master.
Your envy is showing.
Amazon called it on itself when it decided to have this dog and pony show. And to put the cherry on top for Amazon to also receive this $3 billion tax credit it was only going to be a matter of time before the anti capitalist occupy wall street types were going to sound the horn. Both sides lost out but Amazon def lost out on being part of the fastest growing tech city in the country. NYC my friends will be fine.
I see this being better for local startups given they wont have to compete with the gorilla in the room for talent. In any case Google has a huge NYC campus and is expanding more and more with little government incentives and they are doing fine here. Amazon went about this all the wrong ways. Too smug, too used to pushing small cities / communities around.
I don't disagree that it's a negative from an economic standpoint for the city and residents. I wanted it to stay here, but ok if it's not here either. I highly doubt that there ever would be 20,000 jobs and each would've been $150k on average, those are very rosy projections that likely would have never panned out.
Amazon's quick decision to pull out also makes me feel that they were never serious about NYC anyway. And picking two locations might have been a hedge if something went wrong.
The flip-flop game makes them look weak and not serious, a little opposition from a vocal minority and they fold up and leave? Do big companies have to be loved? Boo-hoo
Amazon web services is a Ponzi scheme and eventually Amazon will have a yuge write down and massive employee firings - deal would not have penciled out for ny.
This thread is genuinely appalling. Reading my fellow Republicans’ full-throated embrace of crony capitalism is depressing. The Democrats have no core economic philosophy so I’m not surprised to see their varied reactions, but on what planet does a conservative favor corporate welfare policies in lieu of a pro-business environment for all?
LOL, this video was fantastic. I was reading through the comments and this one (a serious comment) stood out to me:
Just focus on making your town or city an attractive place to do business in general. Getting a hundred small businesses to set up shop in your town may not be as flashy as getting a huge corporation like Amazon but it's just as effective AND has the benefit of keeping your economy diversified. Plus none of those small businesses can hold the city hostage by threatening to leave if they don't get special treatment.
Maybe I would say this--set aside the specific NY/Amazon deal and what happened. The above comment is why corporate welfare is bad. Good government is sacrificed at the altar of flashy political wins.
Baffles me how AOC is supposedly helping out working class, but she just fucked them over big time. Working people need jobs and they can thank AOC for taking away close to 25k jobs away from them. I can't blame Amazon for wanting to pull out.
Not defending her policies, but this was a local and state issue. AOC and federal reps didn't create or take away the incentives.
I abhor AOC with every fiber of my being, but 1) the "working class" didn't lose jobs--these HQ2 jobs are overwhelmingly upper-middle class jobs. 2) Those jobs don't disappear. They disappear from AOC's congressional district, but they don't disappear. This actually shows the problem with corporate welfare--it doesn't create economic growth; it just artificially shifts economic growth from one place to another. In fact, that's just in theory--there isn't even a lot of evidence that corporate welfare is the deciding factor in where companies locate; they are just giveaways to one company to the detriment of other companies that compete for talent and/or product. It's a terrible public policy. And no true Republican, let alone a conservative, would pay lipservice to this morally and intellectually bankrupt public policy.
How did she fuck anyone over? Amazon wasn't "creating" these jobs, they were relocating them into LIC. In other words, sucking up supply and driving up pricing. Even for NYC, a sudden influx of like 50,000 people (assuming each of those jobs comes with an average extra person) in one place is a lot of add'l population to take on. And those weren't working class jobs.
LIC is pretty busy as is. Yes, maybe a few fewer Starbucks baristas will be hired, but there isn't a major change. You know what the biggest impacts would be? More traffic and congestion. More people riding an already overburdened public transit system (thanks Cuomo!). Less housing stock available and more pressure to drive out low income tenants. More folks in the local schools. These are all issues that impact working class folks to a far greater extent than people with the financial resources to have choices in where to send their kids to school, how to get to work, etc.
Whether or not Amazon would have been a net positive for the city, the backdoor manner in which the governor's office negotiated the incentives at the expense of the public weal for New York City and its citizens was about as unethical and criminal in nature as you'd expect from a near criminal and highly corrupt governor.
for fuck sake, it's people like you that are responsible for having AOC types elected.
I'm amazed how you manage to be in the wrong in any given discussion...
Lichtenstein on Amazon pullout: “Worst day for NYC since 9-11”
> Lightstone Group’s David Lichtenstein said Friday that Amazon’s about-face on its New York megacomplex was the “worst day for NYC since 9-11.”
> “Except this time, the terrorists were elected,” the developer added in an email to The Real Deal
But this is the key takeaway from this article:
“The future of the neighborhood is still going to happen,” said Robert Whalen, Halstead’s director of leasing in Long Island City, “but Amazon could’ve accelerated the process.”
1) He's acknowledging that LIC didn't need Amazon; LIC was already on the right path.
2) He is an owner of a large nearby residential building that would have benefited from HQ2. Socialized risk and privatized gain. This type of crony capitalism stands against the very values of our nation, which is that the gov't is here to defend our basic rights so that everyone is equal before the law and has, in principle, equal opportunity to succeed.
As conservatives, we cannot support the principle of socialized risk and privatized gain. It is morally bankrupt.
+SB
I’m just surprised someone like that would make such a reactionary statement. Certainly a frustrating turn of events for him (he has a new 428-unit luxury rental there and paid $60M for the Hilton around the corner) but wow.
I've disagreed with you on a lot of stuff, but you're spot on.
You know who needed Amazon? The dozens of developers who bought in LIC in the last 6 years or so, way overpaid, and now are facing a softening rental market coupled with a massive, massive glut in oversupply. But the tax payer should not be handing out these kinds of tax breaks to bring in a business, especially not in the most economically vibrant city in the country. If this were Rochester or Buffalo, sure, I could see the point.
What adds insult to injury is that the Governor struck this deal essentially in secret and then had the chutzpah to act outraged that maybe some of the locals might have a different opinion on what was good for their communities when presented with a fait accompli
Lol at New Yorkers threatening to boycott Amazon because Bezos is pulling out.
Qui illum libero exercitationem soluta nobis omnis. Voluptatem doloribus eos ratione molestiae quod ullam omnis id. Explicabo voluptas ut doloremque numquam dolorem amet.
Expedita consequatur sequi maxime non. Eos a unde non. Voluptates eos beatae et laboriosam quo consequuntur ut assumenda. Totam consequuntur natus saepe eveniet.
Voluptas asperiores earum sed quia. Voluptatum accusamus ut ratione animi. Ullam nemo quis quis.
Autem consequatur voluptates ut voluptatem dolores sed. Voluptatem dolorem atque tempora voluptas eaque quia. Perferendis porro quia in eveniet illo. Modi quis dolorum numquam quaerat.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Placeat quibusdam maxime iste excepturi voluptate placeat. Voluptates ad voluptate pariatur consequatur saepe soluta rerum. Quidem veritatis omnis vel sed et reiciendis blanditiis. Doloribus saepe cum sit quo et sed. Qui perspiciatis voluptatem sit voluptas est repellendus quod. Quod id dolorum ea quis sed vero eos velit.
Aut inventore blanditiis debitis dicta consequatur. Deleniti quaerat cum quod doloribus eum quo magni sunt. Laboriosam commodi nostrum quae iure beatae repudiandae tempora. Dolor reiciendis et maiores pariatur voluptatem.
Sint et aut tempora corporis voluptas. Est nihil laborum labore qui harum. Et rem culpa quisquam architecto accusamus commodi ex. Est et eum dolorum quibusdam dolorem.
Sit velit magnam distinctio autem placeat est. Praesentium qui aliquam veniam cupiditate iusto dignissimos. Nam vel consequuntur laudantium similique recusandae consectetur.
Numquam consequatur quaerat nam corrupti accusantium. Dolor et voluptas commodi autem qui. Qui impedit veritatis est veniam sit ea.
Non voluptatum error laudantium voluptatem porro autem. Qui ratione voluptatum sed illo. Excepturi sed tenetur repudiandae labore et. Qui et sunt sunt quo rem consequatur ipsum. Perspiciatis labore eaque aut quisquam harum voluptates adipisci.
Molestias est voluptatem voluptates fugiat eveniet quis nesciunt maxime. Asperiores eius excepturi suscipit pariatur reiciendis et sint.