AMAZON PRIMED
N.Y. trades more than $1B in breaks for 25K jobs ... but Ocasio and other pols aren’t buying
Amazon is going brick and mortar in New York City – making its plans official in a highly anticipated announcement Tuesday with Gov. Cuomo and Mayor de Blasio.
The Big Apple and Northern Virginia beat out 18 other finalists, including Boston, in a high-profile contest to bring home the tech powerhouse's new headquarters.
The trillion-dollar online retailer trumpeted the tentative deal, which includes more than $1 billion in city and state incentives, as a win-win for itself and New Yorkers and promised it would bring more than 25,000 high-paying jobs to the city in the coming decade.
“Amazon will invest more than $2.5 billion in the con struction and ongoing operation of this site,” said the company's VP of Global Real Estate and Facilities John Schoettler at a press conference Tuesday. “We will help fund community infrastructure and donate sites for a new public school, a tech startup incubator and for use by artists and industrial businesses.”
The new headquarters – one of two new HQs the company is setting up in addition to its current home base in Seattle – will be located in Long Island City on land currently owned in part by the city and Plaxall, a plastics design and construction company. The other new headquarters will be based in Arlington, Va.
Tuesday's announcement caps an epic contest that began in Sept. 2017 when Amazon invited cities across the U.S. and Canada to apply to become home to its second headquarters. Amazon an nounced 20 finalists in January, including Boston, Denver and Dallas.
Cuomo and de Blasio, who've feuded famously over the past five years, found something to agree on Tuesday with both hailing the plan as a boon to the city and the state.
“This is by far the biggest new jobs deal in the history of New York City [and] in the history of New York State,” said de Blasio.
The mayor's support of the broader deal contradicts previous statements he's made about tax incentives.
“We will forgo big giveaways to a select few companies and instead pursue a city economic strategy that grows whole sectors of small businesses in emerging industries,” he said in his first State of the City address in 2014. “Our aim is that within eight years, the majority of skilled technology-related jobs in New York City are
being filled by those educated in New York City schools.”
The arrangement with Amazon does not clearly lay out local hiring goals, but de Blasio seemed hopeful that nearby NYCHA residents and public school graduates would find jobs with the company.
Cuomo crowed that the average salary for jobs created through the deal would be $150,000 a year.
“The total state and city revenue that will be produced is estimated at $27.5 billion dollars,” he said. “The revenue-to-incentive ratio is 9 to 1. That is the highest rate of return for an economic incentive program that the state has ever offered.”
But the deal quickly drew a chorus of skeptics who questioned why it doesn’t fully address issues like local hiring and the impact the new headquarters will have on rents.
“The consequences of thousands of new tech worktion. ers entering the housing market will be felt not just in Western Queens but in Manhattan, Brooklyn, and across the city,” said Manhattan Borough President Gale Brewer. “We’ll need something like 25 million square feet of new residential housing to offset the pressure of this new demand.”
Local residents also might not be too pleased with the deal’s chopper provision, which would allow for a private helipad and “no more than 120” helicopter flights per year.
Congresswoman-elect Alexandria Ocasio-Cortez sounded off on Twitter too, raising questions about the approximately $3 billion in city and state tax incentives and grants Amazon will be entitled to under its memorandum of understanding with Empire State Development and the city’s Economic Development Corpora“The tion. idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here,” she wrote.
Team Cuomo and Mayor de Blasio argued that the deal includes provisions to prevent Amazon from reaping city and state benefits without delivering on its promises.
But there appears to be some wiggle room in the memorandum of understanding.
Under the deal, Amazon has until 2028 to create 25,000 new jobs. Each year there’s a set job creation goal, but Amazon has to reach only 85 percent of the goal to avoid losing its state grant. After two years of failing to meet goals, the state could move to recapture the grant, but Amazon would still be able get it reinstated if it shows it’s meeting job goals going forward.
On city-owned property involved, which will be leased to Amazon for 99 years and is about 25% of the site, the online retailer will make “payments in lieu of taxes,” or PILOTs — in the same amount a private owner would pay in property taxes.
Over 40 years, that will amount to about $1.2 billion in payments, the city said. Half of it, $600 million, will go into a special fund to upgrade the infrastructure of Long Island City. The other half will go into the general fund.
Also, as part of the deal, the city and state will allow Plaxall to put up apartments on a parcel adjacent to the Amazon site that’s currently zoned only for industrial use. The side deal requires Plaxall to set aside a yet-to-be-specified percentage of affordable apartments and commits it to building a school on another