We've Driven Amazon Out Of New York!

It’s official! Earlier today, Amazon announced that it was pulling out of the deal to build a “second headquarters” in Queens (part of New York City) and hire some 25,000 people there. The New York Times is on top of the story:

Amazon on Thursday canceled its plans to build an expansive corporate campus in New York City after facing an unexpectedly fierce backlash from some lawmakers and union leaders, . . . The company, as part of its extensive search for a new headquarters, had chosen Long Island City, Queens, as one of two winning sites, saying that it would create more than 25,000 jobs in the city.

Leading progressives immediately took a victory lap. For example, there was Alexandria Ocasio-Cortez (tweet quoted in the Times article):

Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world.

(Note: the proposed Amazon HQ is not actually within AOC’s district, but about 1 mile or so away.) And Elizabeth Warren:

@amazon – one of the wealthiest companies on the planet – just walked away from billions in taxpayer bribes, all because some elected officials in New York aren't sucking up to them enough. How long will we allow giant corporations to hold our democracy hostage?

You’re probably wondering about the Manhattan Contrarian’s take on this situation. Of course, I start from the proposition that I favor private investment and wealth creation. We should welcome the arrival of major new employers and large numbers of high-paying jobs. But the Amazon situation was complicated by the fact that New York City and State had offered up some $3 billion or so of “incentives” to induce Amazon to come. Or maybe it hadn’t. The $3 billion figure had been attached to the original announcement, and undoubtedly had been thrown out in the effort to sell Amazon on the deal. But when challenged, the response of officials was something like, “most of this is just what is available as of right to any major employer promising to create a large number of new jobs.”

Let’s take a more critical look at the “incentives.” The Curbed NY website had a piece that originally ran last November that broke down the pieces of the incentive package as follows:

Amazon will receive $897 million from the city’s Relocation and Employment Assistance Program (REAP) and $386 million from the Industrial & Commercial Abatement Program (ICAP). It will receive an additional $505 million in a capital grant and $1.2 billion in “Excelsior” credits if its job creation goals are met. That brings the total amount of public funds granted to $2.988 billion. . . .

Of those, the REAP program is a generally-available $3000 per employee per year tax credit for businesses relocating to certain designated (supposedly “distressed”) areas; the ICAP program is a real estate tax abatement program for businesses expanding in “industrial and commercial” areas, again appearing to be generally available; and the Excelsior program again is a generally-available credit (“6.85% of wages per net new job”!), this time restricted to certain favored lines of business (R&D, software, agriculture, manufacturing, back office, etc., etc.) but otherwise also generally available.

And the $505 million “capital grant”? As far as I can tell, that one was just to be a special handout to Amazon. But most of what we have here was clever gaming of government stupidity in creating and implementing these handout programs. When the programs were created, Long Island City was a down-and-out industrial area. Since then, it turned into a fancy residential area, with dozens of new high rise towers. But the incentives still applied, so Amazon swooped in to claim them.

In short, I’d rate all of these “incentives” as bad ideas whether special for Amazon or generally available. But in their absence, won’t that mean that Amazon won’t be coming to New York, and we lose all of those thousands of high-paying jobs? I wouldn’t be so sure. Probably, there won’t be the 25,000 jobs — but that was always a fake number. In my humble opinion, Amazon will be expanding dramatically in New York anyway. The reason is that New York is the place where it can hire large numbers of talented young people to do jobs like programming and marketing, let alone dealing with the multitude of vendors who sell through the Amazon site. And about half or more of the incentives will still be available anyway, and they will claim them quietly without all the adverse publicity. The Long Island City site? Someone will build something else there, maybe offices and maybe residential. Meanwhile, Google and Facebook are in the midst of big expansions in Manhattan, only done much more quietly and without the fake publicity of Amazon’s phony “second headquarters” search. Undoubtedly, G & F are claiming their share of the “incentives,” although probably minus the “capital grant.”

Meanwhile, I applaud my new progressive allies, to the extent that they opposed the Amazon deal on the basis of the incentive package. But then, that was only a part of their reason for opposition, and probably not the bigger part. Plenty in the opposition were against Amazon on the basis that they are against all new investment (it causes “displacement” — even if no one is forcibly removed), against all large businesses, against gentrification, against people (particularly poor people) improving their lot in the world, and in favor only of having the peons live on government support. Here is a good roundup from Queens Latino in December of statements from various opponents of the project as to the reasons for their opposition. Examples:

Nitesh Das, member from Desis Rising Up and Moving emphasized the outsized role that our local elected officials had in the deal: “It is shameful that [Governor] Cuomo and [Mayor] de Blasio have chosen the economic interests of the few in exchange for the lives, neighborhoods and communities of the many. No deal with Amazon is worth it. Our communities are priceless.”

“If we invest in Amazon — if our government and our schools invest in Amazon, our money is funding displacement,” Mauricio Piratova from Queens Neighborhoods United (QNU) and former LaGuardia Community College student told the audience. “We’re funding the invasion of our land, the erasure of our culture, displacing a lot of small businesses and residents, and funding the technology that ICE and police use to track down and arrest our people.”

“Chhaya experiences the realities of real estate speculation everyday. Our tenant leaders are harassed by predatory landlords trying to deregulate their apartments, while low and moderate income homeowners are targeted by speculative investors and house-flipping LLCs,” said Will Spisak, Program Director of Chhaya CDC. “We know that if Amazon comes to Queens, speculation and harassment will only increase, expediting the process of displacement in immigrant communities. This is why Chhaya opposes Amazon coming to NYC.”

I do wonder how progressive Jeff Bezos feels about the opinions of his political allies in the progressive movement. Did he think that his progressive views made him one of the “good” billionaires, and that he and his company would get a pass from these people?