As is typical all the news articles say nothing of the specifics. They allude to some politicians not liking us and mayor saying they didn’t want to play ball. How informative. So what was the point(s) of contention that caused the change of plan?
Giving billions of taxpayer money to the world’s richest man.
So some local politicians were opposed to the tax breaks? Yikes, welcome to the real world.
This is standard corporate lobbying. Any large company looking to establish a new plant with new opportunities plays assorted jurisdictions off against each other to determine who will give the biggest tax breaks and/or subsidies, because what large profitable enterprises need is of course to take ore money from he average taxpayer. The NDP Party of Canada coined the phrase, many years ago, of “corporate welfare bums” to describe corporate subsidies leeching off the taxpayer.
A big operation like this is going to have a major impact.
A lot more traffic, demand for housing, increased prices for said housing, changes to the character of the area, etc.
It doesn’t take much for well-organized local groups to delay the project in court for a few extra years, add some additional conditions, and so on.
OTOH, there are other cities out there where the local politicians just steam roll right over all that. You wake up one morning and find out about a surprise deal for a new stadium (at taxpayer expense) has been made and no one can stop it. There are no groups to oppose it, well-organized or not.
Four years later the stadium has been open long enough to prove it’s a white elephant. Goodbye tax money.
Bezos likes the latter kind of places.
The Toronto bid included no tax breaks or subsidies. Some people are saying that losing the contest was a kind of win.
I would quibble with the words “giving billions of taxpayer money”. They are tax breaks. Consider two different scenarios.
- Amazon doesn’t come. Amazon does not pay taxes to NY.
- Amazon does come. Amazon does not pay taxes to NY for a long time. However, they bring in lots of other people and businesses that do pay taxes.
The people who didn’t like Amazon coming because of the tax issue chose scenario 1 over scenario 2.
Maybe there are lots of other reasons they don’t like it (gentrification, traffic, etc). I am fine with that. But the financial argument doesn’t make sense to me, but hey, to each his own.
The problem is that the tax breaks and other incentives sometimes result in a net loss for the cities that offer them. As an example, read this transcript of a Planet Money podcast about these economic incentives, and how they sometimes don’t pay off for the cities involved. (The podcast focuses on the neighboring cities of Kansas City, Missouri and Kansas City, Kansas. They’re very close to each other, and offer incentives for companies to move from one to the other.)
This only works if you assume that NYC incurs no additional costs associated with Amazon’s presence. The city provides transportation, policing, fire protection, sanitation, &c, that Amazon would get and not be paying for for the duration of their tax-free period. After all, NYC doesn’t tax just for funsies – it taxes to provide revenue for services.
You can certainly make an argument that the taxes from Amazon’s people/associated businesses, will more than compensate for the hit of providing these unpaid services, but it could also go the other way. Many a city has built a football stadium on promises of enhanced revenue from associated businesses that didn’t pan out.
There was also substantial union opposition to Amazon (company workers aren’t unionized).
On the one hand, I’m dubious about cities competing to give huge tax breaks and other incentives to corporations whose moves may be only temporary and create problems as well as opportunities.
On the other hand, this rejection is going to be fodder for Republicans who’ll argue that radical Democrats torpedoed the project at the expense of 25,000 jobs.
New York City is large enough and desirable enough that the loss of Amazon isn’t going to break it. I expect if Amazon chooses not to come there, someone else will.
The phrase you’re looking for is “corporate welfare.”
The reasons why there was so much pushback against the deal was because it was fundamentally unfair to the taxpayers who were expected to pay the bill for the massive increase in services and infrastructure the deal would require in a city that is already in the midst of an unprecedented housing crisis with a broken, dysfunctional transit system and the infrastructure of a third-world kleptocracy. It didn’t help that the deal was largely negotiated by the corrupt thugs in the Cuomo administration with little or no input from downstate politicians, the City Council, or community members who would actually be affected.
New York is going through a serious real estate boom for at least Manhattan (spilling over to the rest of the city, I presume). A major local concern is that the existing inhabitants would be displaced by a flood of new high-paid employees, as is happening in San Francisco right now apparently. Plus the transportation infrastructure issues, etc. Of course, current locals vote, future inhabitants don’t yet.
1a. Amazon doesn’t come. The property that would have become Amazon HQ2 remains vacant.
1b. Amazon doesn’t come. Other businesses develop the property instead and pay taxes.
It’s not a foregone conclusion that 1 would have meant 1a and not 1b.
I’d be kind of the other way around. If the extra cost of city services exceeds the economic benefit of all the tax revenue, which includes also personal City income tax on higher wage employees who move to NY, sales tax on their greater spending etc. not just corporate tax from Amazon, then I’d be against it.
But I doubt that’s really it. Rather it’s IMO mainly symbolic nonsense like ‘opposition to corporate greed’ and ‘world’s richest man’ or even ‘gentrification’ as a vague bogey man. From the other actions and statements of the notable political people against this deal, I don’t have any confidence in the validity of their decision about this. Or perhaps more simply, if Bill de Blasio (the mayor, probably the furthest left elected executive in the US for an anywhere near comparable population to NY) can accept the ‘gentrification’ or ‘corporate greed’ of this deal, he was solidly for it though now criticizing Amazon as ‘not tough enough to make it NY’, that itself tends to paint the opponents as extreme. Which they otherwise are, in my observation.
I find it hard to believe that Amazon is going to significantly increase city costs. Most of those are sunk costs of providing services to an area. I don’t think they are going to lead to an increase of fires or crime in that area. Some increase? Sure, but more than enough paid by the salaries and extra businesses.
Yes, and those arguments were tried when cities were actually paying large sums of money directly for those stadiums. Here, NYC isn’t paying directly for anything.
I’m partially inclined to agree with you, but the flipside is that Amazon “folded” too easily.
IMHO, Amazon expected after their dog-and-pony auditioning for HQ2 that any city or region that threw its hat in the ring would be 100% for HQ2 coming to their area. However, some politicos, some groups, in NYC pushed back. Some indeed did it for the vague reasons you mention. But some weren’t opposed outright to HQ2, they just wanted Amazon to provide some benefit to the community in exchange for the tax breaks. Amazon made vague promises to give back to the community, and I’m sure some of the local officials just wanted to have those promises made more concrete or enforceable. Traffic or the subways will get worse? Amazon makes a financial contribution to improve the roads and subways. Housing will be made less affordable by the influx of high-paying jobs? Amazon provides some housing, or pays someone else who does. Etcetera.
But the local officials can’t get that if they sign off on the proposal as-is right off the bat. :smack: So they say no, or “wait a minute,” and then the negotiations begin. As Amazon offers more to back up their promises, more officials and groups are mollified. Some core of opposition with the vague or mushy criticisms wouldn’t be, of course, but their support would be dwindling as Amazon put its money where its mouth is and answers the reasonable criticisms of the proposal.
Or that’s what could have happened if Amazon didn’t treat the matter as take-it-or-leave it. :rolleyes:
Tl,dr: Some of the locals were expecting too much (we don’t expect you to talk, Mr. Bond, we expect you to die), but Amazon also showed that they weren’t willing to even try throwing a few sops to the community to [del]split the opposition[/del] show their good faith.
Liberals and Democrats tirelessly argue that copious amounts of taxpayer spending on education and other government services will cause businesses to literally beg to set up shop in an area. Apparently, this is not the case. It was New York that had to do the begging.
I think too it’s a normal form of wallet envy - “why should they get those tax breaks when my small business / Wall Street giant has to pay full taxes?” Which of course is the essence of fair play - everyone meets the same terms. If thing are so great, they should be willing to locate without extra incentives.