November 14, 2018

Amazon, a trillion dollar company, set to receive billions of dollars from New York and Virginia

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Hear that sound? It’s the sound of New Yorkers writing their “Goodbye to All That” essays. As speculated last week, Amazon has chosen the Long Island City neighborhood of Queens, NY and Arlington, VA as the homes for the new headquarters, splitting their HQ2 into two separate locations. Reported by Alina Selyukh at NPR, Amazon claims that they will bring 25,000 jobs to each location, investing $5 billion dollars in the venture. At first glance, this may seem positive but dig a little deeper and it becomes clear that our cities have much more to lose than gain from the deal. 

Over the past year, we’ve seen cities bend over backward to attract the Amazon HQ to their backyards – Amazon received over 238 bids.  While Amazon played their own version of The Bachelor, the residents of these cities have often been in the dark when it comes to the incentives our government officials have promised the company. Probably because they knew their residents would object. Selyukh writes:  

During the bidding process, neither Northern Virginia nor New York disclosed much detail about their incentive offers to Amazon.

Now, Amazon said it will receive incentives from New York state of $1.525 billion, including a tax credit based on a percentage of the salaries it expects to pay employees and a cash grant based on the square footage of buildings it occupies over the next 10 years.

In Arlington, Amazon said it would get $573 million in state and local incentives, including a $550 million cash grant from the Commonwealth of Virginia for creating high-paying jobs over the next 12 years.

Over at Gothamist, Neil deMause breaks down, in a lengthy detailed list, exactly what NYC will be giving to Amazon. There’s a lot to unpack here – we suggest you read the whole article – but it boils down to: “In all, barring any hidden surprises, this is $1.5 billion in bonus taxpayer cash, plus perhaps another billion in as-of-right money, in exchange for importing 25,000 jobs (or $1.7 billion if it reaches 40,000 jobs).”

Amazon is valued at or close to one trillion dollars. Why is New York throwing money at one of the richest companies in the world when we have a crumbling transit system, underfunded public schools, and countless other issues taxpayer money could support instead? Especially when that company has a reputation for bringing negative living conditions and overcrowding in its wake.  Just hours after the news was announced, people are rushing to buy condos in Queens. One can only expect the prices on these condos to skyrocket as people flood the area.
Politicians and New Yorkers are speaking out against the decision. In a separate Gothamist report, Jake Offenhartz writes that  Assemblymember Ron Kim, who represents Flushing, “plans on introducing legislation that would severely limit the state’s power to offer subsidies, and would instead direct that money toward buying and canceling troubled student debt for people living in New York.”  In a series of tweets, newly elected Congressperson Alexandria Ocasio-Cortez voiced her questions about the deal and stated she will advocate for the constituents she represents, who have been flooding her office with calls of concerns since the news was announced.  In a joint statement, State Senator Michael Gianaris and City Councilmember Jimmy Van Bramer came out against the deal. They will gather in Long Island City on Wednesday, November 14 to discuss that matter with the community.  

 

 

 

Stephanie DeLuca is the director of publicity at Melville House.

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