New York.- (GreekNewsOnline)
Corporate giant Amazon announced on Thursday that is dropping its plans to build its additional headquarters in Long Island City of the Borough of Queens in New York. The announcement created a political fury in the State of New York, with supporters and opponents blaming each other.
The collapse of the deal is expected affect the politics in the Greek American Community of New York. All three Astoria Greek American elected public officials (State Senator Mike Gianaris, Assemblywoman Aravella Simotas and NYC Council Member Costa Constantinides) were asking for major changes in the deal. On the other hand, Greek American businessmen with major interests in the Real Estate market who would have seen their wealth to increase substantially if the deal went through, express anger.
One can realize from the statements of the New York public officials a deep ideological division between left and right and it is interesting to see how it is going to affect the next elections.
In order to attract the company, New York State and the City of New York offered $3 billion in subsidies, while the project was expected to bring 25,000 jobs to New York City, with the potential for 40,000.
In more details:
Amazon would have reportedly generated $27.5 billion in city and state revenue over 25 years—a 9:1 ratio of revenue to subsidies. This arrangement was predicated on Amazon creating at least 25,000 jobs over the next decade—and up to 40,000—with an average salary of $150,000, the memorandum said. Another 1,300 jobs were in the pipeline for construction and some 107,000 in total direct and indirect jobs were anticipated, according to state estimates.
Amazon, the city, and state initially planned to commit $5 million each toward workforce development. The deal also planned for a local nonprofit to open a training center on the HQ2 campus to mentor and recruit Long Island City locals, according to the city. A $10 million expansion of the city’s JobsPlus program into the Queensbridge Houses—the largest public housing complex in the country—was set to take shape. Additionally, the de Blasio administration planned to launch a $3-5 million program geared toward training NYCHA residents for careers in IT, cybersecurity, and web development.
To fund local infrastructure—streets, sidewalks, open space and the like—Amazon planned to utilize the city’s Payment In Lieu of Taxes (PILOT) program, estimated by former Deputy Mayor Alicia Glen at $600 to $650 million over four decades. Amazon would have also built a 600-seat school and 3.5 acres of public, open space along the waterfront at Anable Basin.
But officials revealed at a January City Council hearing that the price tag to bring Amazon to Long Island City could have cost $987 million more than the city previously claimed because city estimates only accounted for the minimum job and infrastructure investments that Amazon was expected to make, according to a report from the Council’s Finance Committee.
The list of grievances included Amazon’s stance on unions and the impact on local infrastructure and public transportation, while some Long Island City residents complained that the company’s arrival would drive up rents and other costs.
A major inflection point occurred at a New York City Council hearing late last month, where Amazon representatives affirmed the company’s opposition to the unionization of its workers. Even Governor Andrew Cuomo, an outspoken proponent of the HQ2 deal, criticized Amazon’s stance as inconsistent. “New York State is a union town, and they should know that,” the governor wrote in a statement.
Long Island City transformed from a buyer’s to a seller’s market practically overnight after Amazon’s HQ2 announcement. The change came after a slump that in October saw 13 percent of the area’s listings slash their prices. Real estate experts speculated that Amazon’s move to Long Island City could paved the way for other large companies to move into the neighborhood. Amazon’s sudden reversal will undoubtedly lead to “whiplash,” as one StreetEasy expert put it in a statement.
The HQ2 cancellation has sent some developers scrambling, namely family-run plastics company Plaxall that was initially due to rent 4 million square feet of Long Island City land to Amazon for its headquarters.
EFFORTS TO SAVE THE DEAL
As it was reported in the “New York Times”, “The mayor and the governor, who only rarely find common cause, met Monday in Albany and discussed how to save the deal, which had appeared increasingly imperiled, according to a person familiar with the conversations. After the meeting, Mr. de Blasio spoke to a senior Amazon executive by phone and was told that the company remained committed to New York, the person said.
Both the mayor’s and the governor’s offices reassured Amazon executives that, despite the vocal criticism, the deal they had negotiated would be approved. But the company appeared upset at even a moderate level of resistance, said the person, who, like many of the people describing private conversations at the company and with elected officials, did so on the condition of anonymity.
A decisive moment appeared to come when the Senate Democrats selected Senator Michael Gianaris of Queens for a state board with the power to veto the deal. Mr. Gianaris had once supported the efforts to bring Amazon to New York, but became a vocal critic after learning the details of the plan.
On Wednesday, Mr. Cuomo had even brokered a meeting between Amazon executives and union leaders who had been resistant to the deal — including from the Retail, Wholesale and Department Store union and the Teamsters.
“Amazon and the governor and everybody agreed yesterday on a way to move forward,” said Stuart Appelbaum of the retail union, who was part of the meeting. “Shame on them. The arrogance of saying ‘do it my way or not at all.”’
Some unions supported the deal, and even those opposed had appeared willing to work with Amazon if the company agreed to not work against the unionization of its employees in New York. An Amazon representative, during one council hearing, pointedly said the company would not agree to such terms.
After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.
We are disappointed to have reached this conclusion—we love New York, its incomparable dynamism, people, and culture—and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.
We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult.
We do not intend to reopen the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.
Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time.
STATEMENT FROM GOVERNOR ANDREW M. CUOMO
“Amazon chose to come to New York because we are the capital of the world and the best place to do business. We competed in and won the most hotly contested national economic development competition in the United States, resulting in at least 25,000-40,000 good paying jobs for our state and nearly $30 billion dollars in new revenue to fund transit improvements, new housing, schools and countless other quality of life improvements. Bringing Amazon to New York diversified our economy away from real estate and Wall Street, further cementing our status as an emerging center for tech and was an extraordinary economic win not just for Queens and New York City, but for the entire region, from Long Island to Albany’s nanotech center.
“However, a small group politicians put their own narrow political interests above their community — which poll after poll showed overwhelmingly supported bringing Amazon to Long Island City — the state’s economic future and the best interests of the people of this state. The New York State Senate has done tremendous damage. They should be held accountable for this lost economic opportunity.
“The fundamentals of New York’s business climate and community that attracted Amazon to be here – our talent pool, world-class education system, commitment to diversity and progressivism – remain and we won’t be deterred as we continue to attract world class business to communities across New York State.”
But that’s also one of the big oddities of the Amazon deal: New York City is creating jobs at a whirlwind pace, and several big tech firms like Facebook and Google have located here without demanding a big subsidy bribe. Why hand billions of subsides to a company that doesn’t need it—Amazon did $177 billion in sales and cleared $4 billion in operating income in 2017—in a city whose job market is already thriving?
NYC MAYOR BILL DE BLASIO
You have to be tough to make it in New York City. We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world. Instead of working with the community, Amazon threw away that opportunity.
We have the best talent in the world and every day we are growing a stronger and fairer economy for everyone. If Amazon can’t recognize what that’s worth, its competitors will.
STATE SENATOR MICHAEL GIANARIS
Senate Deputy Leader Michael Gianaris issued the following statement.
“Today’s behavior by Amazon shows why they would have been a bad partner for New York in any event. Rather than seriously engage with the community they proposed to profoundly change, Amazon continued its effort to shakedown governments to get its way. It is time for a national dialogue about the perils of these types of corporate subsidies.”
In a short press conference on Periscope, Mike Gianaris said New York’s effective rejection of HQ2 “should be a launching point to discuss the logic of these corporate subsidies” such as the Foxconn debacle in Wisconsin. “There’s a reason Europe bans subsidies like this,” Gianaris said, “and we should take a long, hard look at whether or not we should do the same thing.”
ASSEMBLYWOMAN ARAVELLA SIMOTAS
Giving a $3 billion subsidy to a company owned by the richest man on the planet was always a bad idea. #AmazonHQ2 #Amazon
NYC COUNCIL MEMBER COSTA CONSTANTINIDES
From the beginning, the process of luring @amazon to #westernQueens ignored the community and proposed a giveaway of $3 billion to a multi-billionaire dollar corporation.
It is no shock to anyone that this was a disaster from the start and bad policy.
New York City has long-standing processes in place to ensure that any project — from a sidewalk cafe to a corporate headquarters — considers the community’s needs. Our objections were never answered and we rightfully opposed this bad deal.
Today is the natural result of plugging your ears to the legitimate concerns of the people and bypassing them in favor of corporations.
STATEMENT FROM SENATE REPUBLICAN
LEADER JOHN J. FLANAGAN
I am extremely disappointed that Amazon has decided to pull out of New York and take 25,000 much-needed jobs and billions of dollars in new revenue with them.
From the start, the Senate Democrats have politicized and poisoned this process just so they could avoid the wrath of the extreme left wing of their party.
While I still believe that cutting taxes across the board and creating an environment where businesses can grow and prosper is the best way to revitalize this state’s economy, this is a tremendous blow. Where are the suburban Democrats who promised us they would stand up to New York City interests and do what’s right for Upstate, Long Island, and the Hudson Valley?
Sadly, when you put Senate Democrats in charge of economic development in New York, this is exactly what you are going to get.
STATE SENATOR RAMOS
Today we have seen the power of grassroots community organizing. Together, we are fighting for a New York that prioritizes affordable housing, small businesses, and union jobs. This deal was going to set a dangerous precedent that circumvented the public review process to welcome one of the biggest corporations of our time that pays zero taxes already. What we, the people, did in Queens was finally draw the line in the sand. We need community development not displacement. In my district, the fight is not over. Amazon is still planning to build a distribution center here, with some of the worst jobs Amazon has to offer. What we need are fully-funded schools, an MTA that works, and affordable housing – all of which would benefit from Amazon paying their fair share. Queens is not for sale. Amazon has no intention of working with us. They would rather walk away than do the right thing by their neighbors, so we will continue to fight against the corporatization of our barrios, and we will win.
QUEENS BOROUGH PRESIEDNT MELINDA KATZ
We all want jobs to come to Queens, and Amazon used the promise of job creation to extract major concessions for this project. But after last month’s City Council hearing, it became increasingly clear that they had no intentions of being good neighbors and committing to the required negotiations.
They rejected our values of supporting working people and were unwilling to work with our local communities toward a mutually beneficial resolution. New York has the best tech work force in the nation, much of which is here in Queens, so if Amazon wants to take their jobs somewhere else with a lesser work force so they can undercut wages and workers’ rights, that’s their choice.
CONGRESSWOMAN CAROLYN MALONEY
Disappointed that NYC wont be home to 25K+ new jobs from HQ2 & that LIC will lose out on infrastructure improvements that would have accompanied this project. This is not the Valentine that NY needed.
U.S. SENATOR BERNIE SANDERS
The people of New York and America are increasingly concerned about the power of large multinational corporations and the billions in corporate welfare they receive. Our job is to end the race to the bottom where taxpayers in one city or state are forced to bid against each other for desperately needed jobs. This is what the rigged economy is all about. I congratulate New Yorkers for standing up to the power of Amazon.
ASSEMBLYWOMAN NICOLE MALLIOTAKIS
Nice going anti-capitalists.
Taxpayers wanted a BETTER deal, not to KILL the deal. Those elected officials who fought Amazon tooth and nail without flexibility just lost more than 25,000 good paying jobs for their constituents and the people of New York City.”
Assemblywoman Malliotakis represents the 64th District, which consists of parts of Kings and Richmond counties. For more Information, please visit Assemblywoman Malliotakis’ official website.
NYC COUNCIL SPEAKER COREY JOHNSON
I look forward to working with companies that understand that if you’re willing to engage with New Yorkers and work through challenging issues, New York City is the world’s best place to do business. I hope this is the start of a conversation about vulture capitalism and where our tax dollars are best spent. I know I’d choose mass transit over helipads any day.
NYC COUNCIL MEMBER JIMMY VAN BRAMER
When our community fights together, anything is possible, even when we’re up against the biggest corporation in the world. I am proud that we fought for our values, which is a fight for working families, immigrants, and organized labor.
“Defeating an anti-union corporation that mistreats workers and assists ICE in terrorizing immigrant communities is a victory. Defeating an unprecedented act of corporate welfare is a triumph that should change the way we do economic development deals in our city and state forever.”
NYC COUNCIL MEMBER ERIC ULRICH
It never ceases to amaze me how the loud voices of a few, could destroy the chance at a better life for so many. Amazon had big plans in store for the borough of Queens, and we blew it! They were going to invest in our future, hire locally, contribute to the community, and make the greatest city in the world even greater. I doubt the NIMBYS have another company willing to create 25,000 good paying jobs. This sets a bad precedent moving forward and will deter other companies from setting up shop in our city.
NYC COUNCIL MEMBER PAUL VALLONE
This could very well go down in the history books as the greatest economic loss and missed opportunity ever for Queens and the entire City. The economic impact Amazon would have had for our future generations cannot be easily replaced. On the other hand, Amazon should have certainly done better homework on the need for community and City Council outreach and involvement with a project of this scope. Now we are left to pick up the pieces.
Statement by Real Estate Board of New York President John H. Banks:
“New York’s renaissance over the past forty years has been due in part to our ability to work through difficult issues that have led to record population and job growth and the emergence of our city as a true global capital. It’s unfortunate that we have lost out on an opportunity to create tens of thousands of jobs for city residents and generate billions of dollars in tax revenue to fund vital services including infrastructure improvements for transportation, schools, and open space. Nevertheless, New York City is still open for business and will retain its status as a world class center for tech and innovation.”
Statement by Gary LaBarbera, president, Building and Construction Trades Council of Greater New York:
“We are stunned by today’s unfortunate news. Politics and pandering have won out over a once-in-a-generation investment in New York City’s economy, bringing with it tens of thousands of solid middle class jobs. This sends the wrong message to businesses all over the world looking to call New York home. Who will want to come now? We will remember which legislators forgot about us and this opportunity.”
Statement by The Association for a Better New York Chairman Steven Rubenstein:
“New York is big and diverse. That’s why Amazon wanted to join companies like Google, Facebook and Disney who are growing here. HQ2 in Queens would have been transformational. But make no mistake. We are still New York and we have more to offer than anyone. But it is critical that in the future, more voices are heard and we prioritize finding real solutions, rather than throwing stones that scare off jobs for New Yorkers.”
WHAT NEW YORK WOULD HAVE GIVEN AND RECEIVED
On November 13, 2018, “Day One” published the following information regarding the deal:
“ Located just across the East River from Midtown Manhattan and the Upper East Side, Long Island City is a mixed-use community where arts and industry intersect. It is a diverse community with a unique blend of cultural institutions, arts organizations, new and converted housing, restaurants, bars, breweries, waterfront parks, hotels, academic institutions, and small and large tech sector and industrial businesses. Long Island City has some of the best transit access in New York City, with 8 subway lines, 13 bus lines, commuter rail, a bike-sharing service, and ferries serving the area, and LaGuardia and JFK airports are in close proximity.
As part of Amazon’s new headquarters, New York and Long Island City will benefit from more than 25,000 full-time high-paying jobs; approximately $2.5 billion in Amazon investment; 4 million square feet of energy-efficient office space with an opportunity to expand to 8 million square feet; and an estimated incremental tax revenue of more than $10 billion over the next 20 years as a result of Amazon’s investment and job creation.
Amazon will receive performance-based direct incentives of $1.525 billion based on the company creating 25,000 jobs in Long Island City. This includes a refundable tax credit through New York State’s Excelsior Program of up to $1.2 billion calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to $48,000 per job for 25,000 jobs with an average wage of over $150,000; and a cash grant from Empire State Development of $325 million based on the square footage of buildings occupied in the next 10 years. Amazon will receive these incentives over the next decade based on the incremental jobs it creates each year and as it reaches building occupancy targets. The company will separately apply for as-of-right incentives including New York City’s Industrial & Commercial Abatement Program (ICAP) and New York City’s Relocation and Employment Assistance Program (REAP).
The community will benefit from New York City providing funding through a Payment In Lieu Of Tax (PILOT) program based on Amazon’s property taxes on a portion of the development site to fund community infrastructure improvements developed through input from residents during the planning process. Amazon has agreed to donate space on its campus for a tech startup incubator and for use by artists and industrial businesses, and Amazon will donate a site for a new primary or intermediary public school. The company will also invest in infrastructure improvements and new green spaces.