HQ upside’s worth it: Bill
Mayor de Blasio Wednesday acknowledged a potential new Amazon headquarters in Long Island City will put pressure on infrastructure and transportation, but said the benefits outweigh any potential problems.
“There will be hassles, but we are up for the job,” the mayor said.
De Blasio said the project would be a “huge boost for the city.”
“There will be development pressures to navigate, but they can be navigated,” he said.
But not everyone believes the project will be a boon to the city and state as the mayor and Gov. Cuomo have argued.
Fitch Ratings, a major credit rating agency, in an article released Wednesday said Amazon’s reported decision to spit its second headquarters project between Long Island City and Crystal City, Va. would have a “muted impact” financially for the city and state.
Any economic upside could be offset by whatever financial incentives governments give the online retail giant, the Fitch report said.
“The direct impact on local government revenues from Amazon will be reduced not only by splitting HQ2 but also by anticipated state and local incentives,” Fitch said.
While Gov. Cuomo said this week the state has offered a “great” incentive package to Amazon, de Blasio said the city does “not believe in subsidies to corporations for retention or to attract corporations,”
Fitch says whoever gets the project will see some indirect benefit from increased tax revenues generated by employees and related businesses. Amazon has said the second headquarters will include 50,000 new employees with an average salary of over $100,000 within 15 years and more than $5 billion in investment over 17 years.
“The additional economic activity could positively affect two of the four local government key rating drivers Fitch assigns, revenue framework and long-term liability burden, over the long term,” the rating agency said. “However, given the large size of the locations remaining in contention, any impact would be modest, particularly if HQ2 is split.”
Fitch says it does not expect much change in home prices in either location “as healthy economic dynamics are already pushing up prices and supply should be sufficient to absorb the needs.”
“The Washington, D.C. area is more likely to benefit than New York City as it has slower growth in rents and home prices,” Fitch predicts.
Gov. Cuomo has said he has offered Amazon “hundreds of millions of dollars” in taxpayer subsidies to locate its HQ2 project in New York.
He also vowed to help expedite the permit approval and construction processes.
Critics, though, say the return won’t likely meet the state’s investment and fear the project will lead to the gentrification of Long Island City.