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Any Guesses on the New Amazon HQ?

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Replies to: Any Guesses on the New Amazon HQ?

  • lookingforwardlookingforward Registered User Posts: 31,160 Senior Member
    A lot could happen in just 5 years. Plus, I don't think most people know their local civic spending patterns, realities, history.

    People get the idea Amazon would hire some vast number at high salaries, they imagine the specific past boom in Seattle and SV, people they know making the big bucks. They look at top end numbers. (Oh, boy, 25000 jobs x 150k = $ 3.75 bil!!) They easily forget how many could be low hourly wage, less than full time, with limited benefits. No way this puts money into local schools, healthcare for poor state residents, housing subsdies, (not to mention infrastructure,) if the mechnism is broke, the proper allocation and outflow (delivery of those needed services) are missing. And Amazon isn't going to take the poorest, untrained, unsuitable- the very sort who have trouble connecting to jobs, at all- and suddently pay them a living lifestyle.

    How many here think that, if Amazon moved into their backyards, they would get hired? Not all of us are techies. I still say the thinking is incomplete.

    And when my city made major concessions to a 'dream' enterprise, try guessing how many of those employees moved in from out of town, were not locals getting their break. They didn't hire my neighbor or his kids. It's not how big business works. I think we all need to look at this from street level. Not wishes and being easily misled.
  • yearstogoyearstogo Registered User Posts: 601 Member
    I have not seen the specifics of the deal they had with NYC but I am sure it could have been either scenario; all at once or over X years.

    I have read of cities offering incentives for companies investments, including jobs, and the companies ultimately do not do what they indicated. I would think governments need to be very specific in the terms to prevent this from happening but I recall several situations that turned out pretty bad for the cities.
  • lookingforwardlookingforward Registered User Posts: 31,160 Senior Member
    edited February 15
    It just seems, if you want money in the coffers, to pay for your community, you don't start by giving it away. You don't start with some bogus, oversimplified, 'trickle up/down' philosophy: if we give them X we will get 2X back for "us." The companies building better high end housing for them will boom, the companies building infrastructure-- is that where you want your kid to have opportunity? Extending utility lines, building roads, on the team cleaning that square footage or delivering packages?

    This is "Robbing Peter to Pay Paul." Smoke and mirrors, if I dare say so. As I said originally, the folks selling boots to the construction workers, doing dry cleaning, running a lunch place, serving happy hour, selling expensive goods, etc, will see the employee dollars. And the high end techies will be earning and spending. Not everyone. How does that revenue get to the actual locals, those not already positioned downstream to see the revenue?
  • Rivet2000Rivet2000 Registered User Posts: 749 Member
    And NY will still have those issues without Amazon and 25,000 new jobs. I wish them well and look eagerly for their solutions.
  • notrichenoughnotrichenough Registered User Posts: 8,948 Senior Member
    GE just scaled back their new headquarters plan in Boston, and is refunding $87 million to the state as a result.

    I wonder if, as Amazon got further into the planning, they realized the cost was going to be far more than anticipated, so they are using "local politicians" as an excuse to back out. I don't see how the local politicians could have realistically stopped it if Amazon was determined.
    You don't start with some bogus, oversimplified, 'trickle up/down' philosophy: if we give them X we will get 2X back for "us."
    If the state's projections of $27.5 billion in new revenue over the 25 years of the deal were accurate, that's a pretty good return for $3 billion in incentives, the majority of which would have been borne by the state and not the city.

    25,000 jobs @150K average gives you $300+mil per year in revenue just in direct income tax, forget about the multiplier effect.
  • IgloooIglooo Registered User Posts: 8,056 Senior Member
    I wonder if, as Amazon got further into the planning, they realized the cost was going to be far more than anticipated, so they are using "local politicians" as an excuse to back out.

    If true, that sounds like a poor planning/analyis on Amazon's part. Regardless of NY, I hope they are better than that in both planning and analysis. They had more than a year to plan and analyze.
  • partyof5partyof5 Registered User Posts: 2,655 Senior Member
    I think this may have been a done deal had they involved more local decision makers. It seems that the governor and mayor got together and did the deal in secrecy.

    It probably didn’t help that there is fallout from the big deal in Wisconsin with Foxconn. Its panning out to not be as advertised.
  • lookingforwardlookingforward Registered User Posts: 31,160 Senior Member
    If 150k is the average, that could mean half at 30k, the remaining 12,500 employees at 300k. I don't buy it. Even google isn't starting every..single..new hire at 150k. It only gets worse, from there, if more are lower. It would mean a smaller proportion at a nutso high salary. Don't be misled by "average." Play with it.

    And 25000 are not going to put every dime into local spending (no vacations away, no goods or services not made locally, no chunk into retirement or that 2nd home elsewhere, etc.) The only thing we can assume (and maybe not) is that their tax dollars go in. And then what? The city/state, busy putting in those utilities, is suddenly going to fix broken down schools in another part of the county or state? Better local transpo for all? Accessible health services everwhere?

    Obviously, I think some of the math is short sighted.
  • greenwitchgreenwitch Registered User Posts: 8,466 Senior Member
    A decisive moment appeared to come when the Senate Democrats selected Senator Michael Gianaris of Queens for a state board with the power to veto the deal. Mr. Gianaris had once supported the efforts to bring Amazon to New York, but became a vocal critic after learning the details of the plan.
    said Mr. Gianaris, whose district includes Long Island City. “The only thing that happened here is that a community that was going to be profoundly affected by their presence started asking questions.
    Still, the company did not hire a single New Yorker as an employee to represent it in discussions with local groups. Its main representatives traveled between Washington and Manhattan, and only one had moved into an apartment to work with community members and foster support.

    https://www.nytimes.com/2019/02/14/nyregion/amazon-hq2-queens.html

    I was surprised to learn in this article that some unions had initially supported the move. The devil is in the details...

    @notrichenough - Gianaris now has the power to scuttle the whole deal, and Cuomo is railing about the new democrats in the state Senate, which is odd since he is supposedly a democrat too, but lol, politics is strange. I think Amazon saw the writing on the wall.
  • bluebayoubluebayou Registered User Posts: 25,933 Senior Member
    edited February 15
    The city/state, busy putting in those utilities, is suddenly going to fix broken down schools in another part of the county or state? Better local transpo for all?

    Today's NYT had an interesting comment on those topics:
    Mssrs. Cuomo and de Blasio should have better prepared for what was in store, since their constituents are maybe more worried about housing, subways and the cost of living than in job creation alone. In fact, it’s partly thanks to the failure of these elected leaders to seriously address the subway and housing crises that Amazon was met by some with such visceral anger and anxiety.

    In other words, the issues concerning housing, transport/subway and COLA and (and schools) already exist and locals don't see them being addressed effectively.

    https://www.nytimes.com/2019/02/14/opinion/amazon-new-york.html
  • kiddiekiddie Registered User Posts: 3,335 Senior Member
    edited February 15
    Lots of issues here.

    Some of the problem was with perception - the idea that the gov/mayor secretly negotiated without letting others know.

    The 25,000 jobs at Amazon brings other non-amazon jobs to the neighborhood - these employees need to eat lunch, they will buy stuff at the local bodega/drug store/etc., will take more uber rides to get places, etc. That is part of how economics work.

    There is a large talent pool in the tri-state area that Amazon would have pulled from, maybe not people down the block in LIC, but a commute away in other areas of NY, NJ, CT. So it would be an overall boost to the local economy (defining local as tri-state area).

    Once objections came up, the city/state needed to work on getting the deal with Amazon to be sweeter or appear sweeter. Then maybe Amazon wouldn't have bailed.

    25,000 jobs is a lot for Amazon to say they will absorb at other locations. They never wanted two HQ2s in the first place, which may be why they feel they can absorb 25,000 jobs esleswhere so easily.

    Local transportation was an issue. All three tri-state airports are frequently rated as the worst in the county.
  • IgloooIglooo Registered User Posts: 8,056 Senior Member
    edited February 15
    ..... and the companies ultimately do not do what they indicated.

    That happened with Amazon, too. initially, there was going to be one HQ2 hiring 50,000 people. That got split in half and yet the promised money $3B remained whole. Doesn't make sense.
  • jonrijonri Registered User Posts: 7,301 Senior Member
    edited February 15
    I get the impression some of you think Long Island City is some vast wasteland. It isn't. It is one of the most rapidly gentrifying neighborhoods in NYC. See https://ny.curbed.com/2019/2/15/18225366/amazon-hq2-new-york-real-estate-long-island-city See also https://www.forbes.com/sites/alyyale/2019/02/15/hq2-fallout-is-amazons-loss-long-island-citys-win/#73dbffd25ef0

    Because so many large apartment buildings have gone up in the last few years, the subway is VERY overcrowded. Schools are bursting at the seams. People who live in the area thought Amazon's arrival would make matters worse.
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