Amazon Drops New York City Headquarters Plan in a Snit

When Alexandria Ocasio-Cortez and Michael Bloomberg agree on something, it’s worth taking seriously. Particularly if it involves New York City.

Both New York City pols objected to the corporate welfare plan for Amazon, in the form of nearly $3 billion in subsidies, detailed in the Financial Times chart below, for installing one of two “second headquarters” in Long Island City, with the claim that it would “create” 25,000 jobs. Amazon had claimed that the reason it needed an additional “headquarters” was that it was unable to hire enough qualified people in Seattle. Huh? Are we really to believe that a company of the stature of Amazon is so provincial that is only hires locally for its head office?

In fact, the reason for Amazon’s showy search may not just have been to get subsidies for headcount additions, and data about the cities wooing for its affection. Amazon’s relationship with Seattle has become strained. Amazon had fiercely opposed a local tax on large companies to fund housing for the homeless and got it reversed a mere month after it had taken effect. By contrast, after the tax was scuppered, Microsoft pledged $500 million to fund affordable housing for the low and middle income in the Puget Sound area, and encouraged other companies to make similar efforts.

In any event, Amazon abruptly announced its decision to withdraw from the deal after getting roughed up at two City Council meetings and enduring the indignity of having to contend with ankle-biters like protestors and union leaders. Even though some press outlets claim that Amazon believed the opposition to its development plan was increasing, Lambert, who follows various grass roots activist efforts intensively on Twitter, didn’t see any evidence of that, and from my further removed, I hadn’t detected any either. In fact, Amazon seemed to be winning over, or at least reducing the hostility, of some critics. From the New York Times:

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.

Amazon did not cover itself in glory with how it exited the deal. It blindsided its big sponsors, Andrew Cuomo and Bill de Blasio, who despite their considerable personal antipathy joined forces on this initiative. In a blog post on the Amazon site, the company falsely claimed that 70% of New Yorkers favored the deal. The highest level of backing found in two polls was 56%, and that fell to 46% when respondents were asked if they supported it in light of the subsidies. I would love to see how the survey questions were designed, because the results are completely at odds with my teeny survey, which included Queens residents, some of them in tony Forest Hills and thus well away from any immediate effect. All opposed the scheme, due to the reduction of affordable housing in Queens and the magnitude of the subsidies.

This is also a key point often missed in polling and political analysis that was key here:

Amazon also said it wasn’t going to revive its plans for a second (actually third) headquarters in another city, and would still hire more people in New York. From the New York Times:

[State senator] Mr. [Michael] Gianaris said the collapse of the deal in Queens revealed the company’s unwillingness to work with the community it had wanted to join.

“Like a petulant child, Amazon insists on getting its way or takes its ball and leaves,” said Mr. Gianaris, whose district includes Long Island City. “The only thing that happened here is that a community that was going to be profoundly affected by their presence started asking questions.

“Even by their own words,” he added, pointing to the company’s statement on the pullout, “Amazon admits they will grow their presence in New York without their promised subsidies. So what was all this really about?”

Gianaris was allegedly one of the reasons for Amazon’s unhappiness. He represents Long Island City and had originally favored the deal, but turned against it once the magnitude of the subsidies became public. After the Democratic party regained control of the state Senate, they put Gianaris on a committee that had the authority to veto the state portion of the pact, which presumably would have been fatal. The Registerin Amazon throws toys out of pram, ditches plans for New York HQ2 after big trouble in Big Apple, pointed out that Gianars’ appointment to the committee was apparently the result of a backlash over the efforts to circumvent normal review processes:

The deal also bypassed normal planning procedures and removed veto power from the city council: something that sparked Gianaris’ election to a state board that did have veto power.

Gianaris was outraged by Amazon’s high-handedness (one wonders what went on behind the scenes) and independent parties opined that Amazon had grossly mismanaged the politics. From Bloomberg:

At a contentious City Council meeting on Tuesday, Amazon’s public policy director Brian Huseman touted the deal’s benefits for the city, but also said that Amazon wants to invest in a “community that wants us.” And state Senator Michael Gianaris, who had been appointed to a committee that would have had veto power over the deal, called the $3 billion in incentives “extortion.”

“They think they can sit there in Seattle and dictate terms and hope that governments bend to their will,” Gianaris said in a Feb. 8 interview on Bloomberg TV. “Well, it’s not going to work.”

Amazon “did an extremely poor job of preparing local officials and bringing them into the fold,” said Tom Stringer, who works on corporate relocations as a managing director at BDO Consulting.

Recall that Amazon had taken the odd step of having officials leak to the Washington Post last week that they were having doubts about the deal. The use of what amounts to a house organ, rather than going to the New York Times or a major financial press outlet says Amazon wanted this to be a one-way, tightly controlled message, as in a negotiating input. I read this as “Cuomo, De Blasio, stop the demands or get us more incentives,” neither of which would work. And if that is actually what Amazon meant to say, no wonder Gianaris, who was already a critic, went ballistic.

It didn’t help that the state and city announced the massive subsidies when both are also contending with large budget deficits. For instance, New York City just announced “congestion charges” on taxis and ride sharing services that are anything but, since they are in effect 24 hours a day. One of my doormen who works late, complained that his nightly ride home (bus service is too infrequent when he gets off duty for him to rely upon) has gone from $8 to $10 due to the charge. Similarly, Amazon was grilled at the City Council over its contract to provide face recognition technology to ICE.

Many stories took note of the apparent petulance of Amazon’s sudden move. For instance, from the Financial Times:

Amazon’s decision to walk away from Long Island City suggests a tin ear to the public mood. So, too, does its decision not to reopen the HQ2 search. Had it announced on Thursday that it was moving the 25,000 jobs to a city that needed them more, it might have avoided the questions it stirred up about what the point of the original campus search was anyway.
.

Other possibly relevant factors:

Bezos runs into limits of his bullying? Bezos is a particularly nasty boss. The press in the US and abroad has run many stories on the oppressive, backbreaking conditions in Amazon warehouses. In fact, Bezos is an equal opportunity abuser; we wrote about how Whole Foods employees were reduced to tears and quitting as a result of numerous new procedures Bezos put in place, virtually none of which seemed designed to improve customer service or even profits. As we wrote a year ago:

But first to Bezos’ general pattern of employee mistreatment.

It’s bad enough that Bezos engages in the worst sort of class warfare and treats warehouse workers worse than the ASPCA would allow livery drivers to use horses. Not only do horses at least get fed an adequate ration, while Amazon warehouse workers regularly earn less than a local living wage, but even after pressure to end literal sweatshop conditions (no air conditioning so inside temperatures could hit 100 degrees; Amazon preferred to have ambulances at ready for the inevitable heatstroke victims rather than pay to cool air), Amazon warehouse workers are, thanks to intensive monitoring, pressed to work at such a brutal pace that most can’t handle it physically and quit by the six month mark. For instance, from a 2017 Gizmodo story, Reminder: Amazon Treats Its Employees Like Shit:

Amazon, like most tech companies, is skilled at getting stories about whatever bullshit it decides to feed the press. Amazon would very much prefer to have reporters writing some drivel about a discount code than reminding people that its tens of thousands of engineers and warehouse workers are fucking miserable. How do I know they’re miserable? Because (as the testimony below demonstrates) they’ve told every writer who’s bothered to ask for years.

Gawker, May 2014 – “I Do Not Know One Person Who Is Happy at Amazon”

….

The New York Times, August 2015- Inside Amazon: Wrestling Big Ideas in a Bruising Workplace

….. 

The Huffington Post, October 2015 –The Life and Death of an Amazon Warehouse Temp

For a good overview of the how Amazon goes about making its warehouse workers’ lives hell, see Salon’s Worse than Wal-Mart: Amazon’s sick brutality and secret history of ruthlessly intimidating workers.

Mind you, Amazon’s institutionalized sadism isn’t limited to its sweatshops. Amazon is also cruel to its office workers. The New York Times story that Gizmodo selected, based on over 100 employee interviews, included:

Bo Olson…lasted less than two years in a book marketing role and said that his enduring image was watching people weep in the office, a sight other workers described as well. “You walk out of a conference room and you’ll see a grown man covering his face,” he said. “Nearly every person I worked with, I saw cry at their desk.”

While that paragraph was the most widely quoted from that story, some reporters reacted strongly to other bits. For instance, from The Verge:

Perhaps worst of all is Amazon’s apparent approach when its employees need help. The Times has uncovered several cases where workers who were sick, grieving, or otherwise encumbered by the realities of life were pushed out of the company. A woman who had a miscarriage was told to travel on a business trip the day after both her twins were stillborn. Another woman recovering from breast cancer was given poor performance rankings and was warned that she was in danger of losing her job.

The Business Insider story on Amazon, ‘Seeing someone cry at work is becoming normal’: Employees say Whole Foods is using ‘scorecards’ to punish them, is another window on how Bezos thinks whipping his workers is the best way to get results from them.

Back to the current post. The ineptness of the New York City campaign shows. Amazon seems to have assumed that if it had the governor and mayor in its pocket, all it had to do was show up for photo ops. The New York Times points out Amazon didn’t even hire a native to grease the wheels:

Still, the company did not hire a single New Yorker as an employee to represent it in discussions with local groups. Its main representatives traveled between Washington and Manhattan, and only one had moved into an apartment to work with community members and foster support.

So one reason for Amazon’s sudden change of heart is he couldn’t stomach the idea of not being able to push around New York City the way he bullied Seattle into dropping its homeless tax. At best, he’d have to curry favor, feign interest in the concerns of locals, and make occasional gestures. Bezos may have seen that as a price too high.

Amazon fears inflatable rats? A more specific concern is that locating Amazon in Long Island City would have subjected Amazon to an ongoing unionization push, which given the shift in the zetigeist, the giant retailer was at risk of eventually losing. Better to stick to places where those fights aren’t so imminent.

Or again, having to walk past an inflatable rat every time he visited New York might have taken the fun out of Bezos’ city-funded private helipad.

Bezos suffering from diminished capacity? Anyone on Wall Street will tell you that senior rainmakers and deal-doers become completely unproductive for at least a year and often two when they are going through a divorce. It’s hard to think that a CEO is much different. The fact of the Bezos dick pix incident, both the sending of the image and his bizarre effort to depict himself as victim, suggests he is already off his stride. It’s not going to get better as his divorce progresses. Even couples I know without kids who separated for no-fault reasons (for instance, one getting an overseas assignment when the protracted absence became untenable for the partner) and wanted the split to be friendly found it still got contentious. I can’t think of a single divorce that didn’t get ugly when kids were involved.

And the impression I have is that Amazon, like AIG under Greensberg, runs like a French court: the CEO making a vast number of decisions personally for a company of that scale. Even though Amazon has names CEOS of its major business lines, it’s not clear how much Bezos has backed away from his famed micromanaging.

In the meantime, enjoy the schadenfreude. The Wall Street Journal and Bloomberg report that speculators who snapped up real estate near the aborted headquarters are licking their wounds. From the Journal:

Amazon.com Inc.’s announcement that it is ditching plans for a corporate headquarters in New York City stunned real-estate speculators, developers and renters who had rushed into the Long Island City neighborhood to be near the new HQ2…

Open houses for Long Island City condos were overflowing. Brokers said customers made offers via text messages on units, site unseen. Developers with office space in Long Island jockeyed to attract the thousands of workers that were expected, and local residents cheered the promise that new restaurants, fashion boutiques and other new stores would flood the retail-starved neighborhood.

And Bloomberg:

Amazon.com Inc.’s decision to drop its expansion plans in the Long Island City neighborhood of Queens plunged local real estate brokers into despair — just months after the euphoria that followed the company’s announcement that it would open offices there and bring thousands of jobs. But not just despair. Also anger.

“I think those local politicians, their careers are over,” said Eric Benaim, chief executive officer of Modern Spaces, a Long Island City brokerage, who distributed pins and posters supporting the Amazon deal. “They’re responsible for losing 25,000 jobs.”

It’s not clear that this real estate industry desire for vengeance will get all that far. While developers are used to owning New York pols (I recall Steve Ross of The Related Companies, which was way less powerful in the 1980s than it has become, was able to get Senator Al D’Amato on the phone on short notice), I haven’t seen the names of any of the real estate heavyweights associated with Amazon headquarters plays, so it’s not clear that the Long Island City roadkiill can do that much damage. And by contrast, AOC continues to get traction. The driver of one of the two cabs I took yesterday, unprompted, brought up her Congressional hearing clip on campaign finance and said how impressed he was by it.

Plus:

Enjoy this win. Maybe this is a sign that we’ve hit Peak Amazon.

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113 comments

  1. Tim

    It’s fascinating how many “capitalists” are furious over AOC single handily stopping the hand out to AMZN / Bezos while simultaneously turning America into a socialist state.

    “Enjoy this win. Maybe this is a sign that we’ve hit Peak Amazon.”!

    #Hypocrites

    Reply
      1. Tim 740am

        I know it and you know it cj51!

        The fascination included how many seemingly intelligent people thinking she did do it single handedly.

        Also – that the freshman Congresswoman is going to change USA from some perfect capitalist country into some socialists/communist failed state all by herself.

        Reply
    1. polecat

      Amazon was looking at All • That • Cheddar !

      Maybe some enterprizing soul can purchase and position a whole den of those giant rats, to surround every one of Jeffery’s HDQers … as well as R.F. Cuomo and DeBlasioed to Hell … taking aerial de-promo photos for popular dispersal.
      Surely a go-go fun-me campaign is in order …..

      Reply
  2. James E Keenan

    Enjoy this win. Maybe this is a sign that we’ve hit Peak Amazon.

    Perhaps it’s also a sign that we’ve hit Peak Andrew Cuomo!

    Reply
    1. WheresOurTeddy

      A bunch of real estate speculators bought things that aren’t going to appreciate at the rate they thought?

      A single tear is rolling down my cheek

      Reply
    2. Oh

      This may be the time to give Amazon the final shove and it may come crashing down. Just like the Gorilla on the Empire State Building.

      We have be all the more vigilant about the local politicians who give tax payers resources to subsidize these corps.

      Reply
  3. Otis B Driftwood

    Yesterday I cancelled my Amazon Prime membership. This isn’t particularly heroic of me, or a response to yesterday’s news (although it reminded me I needed to do this). Since my wife also has Prime, it was a waste for both of us to have it. That’s the reason. That said, I do my best to find an alternative retailer (starting with brick & mortar) before I resort to buying anything on Amazon. But I also have a Kindle and really like how easy it is to buy books. I also have an Echo in my home and talk to Alexa daily.

    I have worked with more than a few people who now work for Amazon. All but one of them relocated to Seattle from the Bay Area (one took a job in the local San Francisco location). They are all software engineers and managers. When one of them came to me for advice before taking the job, he told me that he would be paid 50% more than his current 6-figure salary. I cautioned him about Amazon’s notoriously brutal workplace, but he was prepared to make the move. I’ve remained in touch directly and through friends, and he seems to have adjusted alright, although he travels constantly and so I wonder how that impacts his family (he has young children). I have not heard any of the notorious horror stories about employee abuse from any of my former colleagues.

    As an aside, one of my Amazon acquaintances was a product manager whose team was focused on optimizing the packaging of their products for delivery. If you use Amazon frequently and have been for the last few years, you will have noticed they have improved in how they package products significantly – no more huge boxes containing a single, small item.

    This may or may not matter, but all of the people I know who have taken jobs with Amazon are immigrants from India.

    Finally, consider the irony that Microsoft, once a poster child for corporate bullying and ruthless business practices, has stepped in to fill the void that Amazon created with respect to supporting the local community. Will Amazon eventually undergo the same evolution? Not anytime soon, we can be sure of that.

    Reply
    1. Carla

      “I also have an Echo in my home and talk to Alexa daily.”

      Hhm. It’s a brave Naked Capitalism reader who would admit this.

      Reply
      1. Otis B Driftwood

        Hah hah, yes, I suppose it does. But then again, this forum wouldn’t be very liberal (in a good way) if it didn’t celebrate a variety of perspectives.

        Reply
      2. polecat

        I will have None of it ! I won’t be a participant in the destruction of society by these Foul Ferengi if I can help it.

        Reply
          1. polecat

            I’m referencing the 4 foul winds : NYC, Wash. D.C., SiliCON Valley, and HolydeadwoodmakeBeLieve .. well 5, if one includes Seattle !

            Reply
    2. tegnost

      Not a criticism of your comment, I just wonder what you think about the possibility that your software friends who’ve joined amazon are inured to the harsh working conditions because they are all in that disruption is necessary and “the cream rises to the top” proves that those on top are the cream? Meritocracy has it’s own moral code in a sense and what works in seattle and sf due to the sheen of cultural value these employees/ceos bring to their respective metropolis’, while at the same time just destroying the cities, I mean I’ve been to both sf and seattle for significant projects, so long enough to see whats going on, and the homeless situation is horrendous, never before in my life have I witnessed anything remotely resembling it, and the bezos of the world, and let’s be honest, those who throw in with him as well, don’t care. They don’t care. It’s the way it’s supposed to be, and the petulance is is pathetic, they also said they aren’t going to hire anyone more in seattle either. Awww.

      At a contentious City Council meeting on Tuesday, Amazon’s public policy director Brian Huseman touted the deal’s benefits for the city, but also said that Amazon wants to invest in a “community that wants us.”

      Good luck with that Mr. Huseman…

      Reply
      1. Otis B Driftwood

        I’m not so sure my former co-workers were motivated by anything more than what motivates most people to change jobs – better pay and a better opportunity for career growth.

        I’ve known others who have gone one to other companies (Apple, Twitter, etc.) Always for pretty much the same reasons.

        To get a pulse of what people think about working for a particular company, I often go to Glassdoor. I do this regularly, in fact, for the company at which I work. And I find that the reviews left by employees accord with I know is going on there.

        I checked Amazon’s reviews this morning and they are no better or worse than you will find at other companies.

        As for the homeless situation in the Bay Area, it is as you say, horrendous. I live in the orbit of UC Berkeley. And when I moved here some decades ago, housing was still affordable for people across the income spectrum. That has changed dramatically since the early 00’s and has accelerated since 2009. While affordability has been diminishing for a long time, the homeless problem has gotten steadily worse in only the past 5 or so years. Besides the quasi-official encampments, the number of ad hoc homeless camps spread out all over and the squalor around them is incredible. Drive along the main SF->Berkeley arteries (like the I-580) and you will see tents pitched under overpasses, in medians, just about anywhere there is open space. Along the access road near the old Berkeley Forge you will find a long-standing camp that runs along the roadside and actually spills out into traffic.

        I cannot imagine the misery of living in these camps in the cold, wet rainy weather this winter.

        Another trend is people living in cars or mobile homes. Every day it gets worse. It’s horrible. It’s as if everyone has simply given up and the whole situation has become normalized.

        Is there a connection between this and the corporate irresponsibility of tech companies? Maybe. But I think there is much more to it than that.

        Reply
        1. Michael K

          Excellent comments. I’m a 25-year resident of Silicon Valley and I’ve noticed the quality of life here steadily deteriorating. This place has gone from a pleasant, low-rise community with a decent road network to an overcrowded, overpriced, under-infrastructured hellhole. Uncontrolled, unbalanced growth has been a curse on our beautiful Bay Area.

          What I hate most is how my weariness about homeless encampments has led to feelings of disgust towards people who are suffering from our local problems far more than I am. I know most of my friends feel the same way.

          With few exceptions, our local leaders have let us down in their pursuit of the job growth that is choking us. The last thing we need is more jobs. What we need is housing and infrastructure to support the jobs we already have.

          Omaha, Nashville, Denver: please lure our tech jobs to your communities!

          Reply
        2. tegnost

          But I think there is much more to it than that.

          true, to some degree blaming tech is the same as blaming boomers and amounts to scapegoating, but the culture of disruption is a core principle that maybe has downsides

          Reply
      2. Stratos

        I agree that many people who work for tech firms are fully onboard with the values of the founders. That is one reason many longtime Seattlelites are fleeing the city. There is a definite clash of values and worldview between the “Tech Bros/Sis” and everyone else. For one, they are more likely to berate the presence of homeless camps ( in every available green space) than to show compassion or seek solutions.

        When I moved to Seattle in the late 1980s, it was a middle class city with lots of green space, some affordable housing and a healthy job market. It was a city brimming with highly literate readers who supported scores of independent bookstores. There was also a vibrant local music and organic food scene.

        Now, many of the bookstores have folded. The food and music are increasingly corporatized. The predominance of the tech sector and the corporations that serve them has a deadening effect on the city. This was brought home to me one Saturday, when a young woman approached me and asked what part of town had small, interesting boutique shops. She told me that she was a recent transplant from Austin, TX.

        She talked about how several neighborhoods in Austin had locally owned specialty shops that had unique items for sale and were fun to browse. I directed her to an adjacent neighborhood that might fit the bill. Then I told her about how my neighborhood was once filled with such shops, but since the arrival of the tech companies and their workers, the neighborhood retail spaces now sported boring, lookalike corporate chains.

        Reply
      3. jrs

        I suspect that in a LARGE company and Amazon is nothing if not that, there is no such thing as across the board working conditions, that much depends on your boss (more on the white collar side, the warehouses are probably as bad as all that, most companies do have a caste system afterall).

        It doesn’t mean company culture has NO influence but … a boss can sometimes make or break a job.

        Reply
        1. L

          People I have known who work at Amazon can attest to that. Depending upon which group you are in the boss is more or less Bezosish. What you hope for is a group that insulates from the backbiting and informing rather than embracing it.

          That said, noone I know who has gone to Amazon has stayed more than 2.5 years.

          Reply
          1. Mike Mc

            After over a decade of competing with them in local retail computer sales and service, I’ll throw my two cents in for your local Best Buy stores (retail purchases, not service).

            They’ve avoided becoming the next Circuit City and meet my needs and my many referrals as well for various computers pieces and parts. The ability to check local stores’ stock of items via their web site is also a big boon in this cold and snowy part of the Midwest.

            Reply
      1. Tom

        I’ve found newtonville.camera (no longer located in Newtonville!) to be competent and well stocked. Same-day delivery over the counter!

        Reply
      2. crittermom

        I’ve been pleased ordering both computer & camera items from newegg.com.
        My son, an IT, turned me onto them.

        They seemed to be cheaper than B&H for camera equipment from what I experienced, but I haven’t ordered anything in quite some time now. Selection of items was very good.

        Reply
        1. cm

          I used to use newegg a ton, but they got bought out and their customer service plummeted. RMAs are a complete pain now, when previously they were painless.

          Wiki says: “In 2016, Liaison Interactive (SZSE: 002280), a Chinese tech company, acquired majority stake in Newegg in an investment deal.”

          Reply
    3. Summer

      Microsoft has been in Seattle longer than Amazon, right?

      Amazon will leave Seattle in a heartbeat if it ever finds or creates Galt’s Gulch.

      Reply
    4. Summer

      People give me Amazon gift cards.
      I collect them until I get enough to make one big purchase so that I don’t have to go to the site as often and ceate more of a trail.

      Reply
    5. ShamanicFallout

      Seattle-ite here. I know a few people who work in Amazon corporate and have no problem with the working conditions, for whatever reason. They say it’s hard and stressful, but they make a ton of money, so maybe that’s the reason they continue (for now at least). One anecdote though. Some friends were talking to one of them who is pretty high up in HR and she was telling how really great and grand working at Amazon is and that she can even bring her dog to work everyday! And one of us in our group asked her if she thought any Amazon warehouse worker could bring his or her dog to work. Crickets.

      Reply
    6. Paul P

      Amazon bought ABE Books, so don’t buy from them.

      Alibris hooks up independent bookstores around the country, giveing a local bookseller a national market. I find them reliable.

      Reply
  4. a different chris

    And this pretense of 25000 highly skilled workers — where have we heard something like that before? (cough, Foxconn, cough).

    Reply
    1. Pat

      Heck any worker list. Think pipelines, casinos, etc. Almost every time there are fewer jobs and many of those with much lower pay than was inferred or even promised outright.

      One of my reasons that any such ‘deal’ should be a contract that requires the companies to meet their estimates or return said subsidies, etc with punitive interest – like a mope would be hit with for taking a tax break they didn’t deserve on their taxes.

      Reply
  5. Michael Hudson

    I live in Forest Hills, and if Yves had asked me about my position on Amazon, I’m of course against the $3 billion subsidy. But that’s not how NBC and the other New York channels are reporting the situation. They’re all using it to attack AOC, saying that she’s “anti-job.”
    Nobody is against jobs. They’re against the $3 billion giveaway. They’d be all FOR the $3 billion if it were spent on fixing the subway. But Cuomo spent much MORE than that on fancying up the stations on the upper east side and the World Trade Center INSTEAD of fixing the switches and making more trains run in Queens. We’re definitely treated as a Third World borough of Manhattan — and the prices reflect that.
    Not only prices for condos, but shopping prices, grocery prices, restaurant prices — all much less than the rest of NYC. That’s what makes it so nice here! Channel 1 interviewed restaurant owners in Long Island City, and they were unhappy that the couldn’t raise prices to feed the Amazonians. real estate brokers were very unhappy that they couldn’t raise everyone’s rent (including the rent that restaurants would have had to pay — so the restaurants would have been squeezed in the end to as little as they’re making now).
    Note the misreporting and the anti-AOC slant, refusing to discuss the bottleneck problem on the subway (no room on the #7 line), no public utilities — and of course, they’d have to tear down the public housing and gentrify the neighborhood.
    So just who ARE those 70%, and who’s spinning their story?

    Reply
    1. AstoriaBlowin

      There’s plenty of capacity on the trains going from Manhattan to LIC so having the workers there would not be a problem going on the assumption that many would not be traveling from points east. There was also no plan whatsoever to tear down public housing, the amazon site on the east river, an old plastics factory was originally going to be a big residential development, 1500 or so units. Hopefully the NIMBYs won’t be able to block that from getting back on track now that amazon isn’t going to use the land.

      New Yorkers weren’t uniformly opposed to this, lots of support from public housing residents in LIC on the basis that there would be some “community benefits” negotiated and maybe jobs for residents. But also lots of concerns that this would make western queens more expensive. But that is happening all buy itself because we build no housing and have lots of demand.

      When you consider the evil cretins that already do business in NYC amazon wouldn’t exactly be standing out. So if there were zero subsidies and they pay market rate for all land and office space then it doesn’t make much difference to me if they came.

      Reply
      1. Yves Smith Post author

        The N train is in terrible shape and I’m not sure your “Manhattan to LIC” is germane since the N is often plenty packed through its Manhattan stops to the 3rd Avenue/58th Street stop before going into Queens. Your comment virtually pre-supposes that Amazonians only take that one hop, and not live elsewhere in Manhattan. You also have the load on other busy lines, like the Lex line, the F (which sort of connects with the N) and the R and W, all of which are transfers at 3rd Avenue/58th Street and thus would be part of possible commuting routes to LIC.

        And there is a difference between average Manhattanites moving to LIC and really high paid ones. Twitter put an office in a ‘hood that had long been a working class neighborhood and had been gentrifying in San Francisco. A local told me her rent increased 40% in one year and that was typical.

        Reply
        1. Felix_47

          I don’t know how true it is but from the New York Times in 2016 in a series on the problems with the subway and the out of sight costs:
          “While the M.T.A. has faced decreasing funding, members of the Transport Workers union saw their salaries increase by 19% between 2009 and 2016. The average annual salary for a subway worker is $170,000 each year, while subway managers make an average of $280,000 per year.”
          That is a lot more than what Bezos was promising for his workers. Why work for Amazon when you can get a city job without much education and not a lot of work with early retirement, full union protection and benefits etc? And New York subway technology is rooted in the 1940s.

          Reply
          1. Yves Smith Post author

            This looks completely made up. See the 2019 results here.

            Associate general counsel makes $149k.

            “Application specialis” whatever that is, makes $105K

            Senior network engineer makes $98K

            Bus drivers make $69K

            Inspectors make $61K.

            Technicians paid hourly, apparently not salaried, but their $45.40/hour would translate into $82K/year assuming an 8 hour day, 225 work days/year.

            HVAC mechanic makes $33.68.hour

            Paralegal makes a mere $15.14 an hour.

            https://www.indeed.com/cmp/Mta-New-York-City-Transit/salaries

            Maybe this is the pay for union lobbyists, not members. Someone really snookered the Times, and the Times is not the sort to make corrections even when called out.

            Reply
    2. Otis B Driftwood

      Did you read Kenneth Brown’s editorial in yesterday’s NYT, Michael? He tried to make a case for giving in the Amazon’s demands. Of course, that argument became moot shortly thereafter.

      Reply
    3. Yves Smith Post author

      Haha, yes, the person in Forest Hills I asked who turned out to be so opposed is a right winger! I was trying to get diverse points of view on this issue and couldn’t find an Amazon backer.

      Reply
    4. jrs

      Everyone knows it is jobs for a FEW but rent increases etc. for the MANY. So they can spin their 50 year old anti-left propaganda like Rip Van Winkle, who wouldn’t know a rental affordability crisis if it bit them. But they only come across as out of touch. I only thank heavens AMZN never considered L.A.. Stay away AMZN, stay away.

      Reply
      1. tegnost

        Hmmm…L.A., think bezos, gold chain, top down in the ‘vette cruising venice, chicks all over…Movie Stars! What better place to have a mid life crisis amirite?

        Reply
  6. notabanker

    There was extensive coverage by the alt press in Cleveland in regards to the Amazon HQ bid. The contents have never been made public. The proposal is under lock and key at a law firm being protected as IP and trade secrets. The wonder of public-private partnerships.

    I find it interesting Bezos lives in DC. To me that says it all. It’s more important to run his empire in the center of the politicians than to be at company headquarters in Seattle.

    Fun to revel in some schadenfreude, for like 5 minutes. But the oligarchs still own Congress and unless that changes, nothing else will.

    Reply
    1. NotTimothyGeithner

      Because New York City has always been known for its parochial, out of the way status where the city had difficulty attracting…oh right…I forgot the original canal/sewer system and harbor brought people and commerce. They didn’t participate in mindless contests.

      If it wasn’t for billionaires deigning to spend time with commoners, nothing would happen.

      Reply
    2. tegnost

      Are you trying to be funny, I don’t see a snark tag? Why would any city and it’s residents want a company like amazon? I can understand rentiers wanting them, but average people don’t need to see their rents doubled to benefit a company that is relentlessly cheap. It’s sort of gotten to the point that these corps view themselves as sports teams. Remember that the venerable Howard Schultz gave up our sonics because we wouldn’t buy him toys? The NBA would love to get back in seattle, heck, now they even say they’ll pay their own way! But amazon has no lovable stars that go out in the community, another heck, the great Gary Payton used to play baskeball at green lake park with whoever showed up. Bezos? What does that p.o.s. do for anyone that wasn’t just a by product of something he did for himself first?

      Reply
    3. Pat

      Considering that NYC has pissed on Walmart for decades and they still try to enter that market on a regular basis, this NYer is shaking in their boots.

      Here’s the thing, there is a real crisis regarding the future of NYC and jobs, much of it being advanced by the greed of the Real Estate Industry. There has been a real loss of business in the city that isn’t FIRE, Managerial, or Restaurant based. Amazon was not going to change that and their loss allows the city and state more ability to deal with real problems that Amazon was only going to make worse. And if that happens perhaps that will allow other smaller but more diverse businesses to come to or return to the city.

      Reply
  7. PhillyPhilly

    re: Microsoft’s pledge of $500M for affordable housing, isn’t that mostly loans? Will it actually help the community, or are they doing this to get favorable press?

    Reply
    1. Kurt Sperry

      Thank you. Yes, *loans*. That’s some real philanthropy there. Eat the rich, they cannot be bargained or reasoned with.

      Reply
  8. Pavel

    Wolf Richter over at Wolf Street wonders if Amazon actually is rethinking the maths in light of recent economic news and a possible (or probable) recession, and is glad to have an excuse to get out of the deal.

    Worried about Costs & Slowdown? Amazon Scuttles HQ2 Altogether, Plunges NY City Real Estate Industry “Into Despair”

    This means that Amazon has decided it didn’t really need this big facility. Is it worried about retail sales not holding up? Is it fretting about competition from the biggest retailers in the US and elsewhere as they catch the drift of e-commerce? Is it worried about a slowdown at AWS, its big data-center money maker, now that the exuberance about the “cloud” is waning? Is it worried that in the future, investors will once again hound it about ballooning expenses, and hammer its stock price to smithereens?

    This was a move designed to keep operating expenses and capital expenditures from ballooning further. Laying off people is one thing when push comes to shove, but getting rid of a monstrous multi-billion-dollar HQ2 is another. Something like this — especially when work has already started and money has been plowed into it but it’s not finished and cannot be used – could become an albatross around the neck of Amazon when it needs to cut expenses.

    But for Amazon, it may have been a prudent business decision, artfully dressed up as response to the political opposition the incentive package was facing.

    Its decision to scrap HQ2 altogether may have been based on the growing uncertainty in the financial markets, on the increasing likelihood of a downturn looming just beyond the horizon, and on the stiffened resistance by its competitors around the globe.

    I haven’t lived in NYC for ages, but I’m thrilled to see nasty Bezos & Co piss off. If a few real estate developers took a hit, so much the better. Why should anyone want such a horrific company in one’s neighbourhood? Either it is the neo-serfs toiling in subhuman conditions, or the IT gurus who profit from the serfs. Not to mention destroying local stores and businesses relentlessly, and never paying proper corporate tax. Bah humbug. Don’t let the door slam you on the way out, Jeff.

    Reply
    1. Yves Smith Post author

      I took note of Wolf’s post but didn’t include his theory because I don’t see it. Amazon is still relentlessly trying to expand and I see the stock price fall as mainly about the FAANGs having been in a bubble and some air coming out. Amazon did well during the financial crisis, and the company has so much financial heft that it would likely regard a downturn as a time to make acquisitions on the cheap.

      Reply
      1. ChiGal in Carolina

        Thanks for collecting all these incriminating links in one place, Yves.

        Also I am taking your (and others’) kind advice on a 2015 MacBook Pro. TechGator is one of the suppliers of NewEgg and they have several of them. Thanks! I am thrilled to start moving away from MS and Google (just signed up for Proton).

        Reply
      2. Bob Anderson

        You mean Amazon did well with the bailout. If the debt collapse had been let to “continue”, they would be toast now.

        Reply
    2. Hithere

      Do they really take a hit? NYC could say no cuz Amazon isn’t the only beau at the ball. A lot of people presume no one else will want to do jack in NYC, but even Amazon is still expanding there.

      Reply
      1. Joe Well

        NYC is like an archipelago of neighborhoods. Real estate agents will tend to specialize in one little island like Long Island City, and so for those invested in LI City real estate, this really is a major disappointment since it’s unlikely a project this size will be coming any time soon to their neck of the woods.

        (Object lesson: there is no way to benefit everyone, even when an objectively good outcome is achieved; fixing healthcare, education, housing, inequality, food, foreign policy, et al is going to create some losers along with the winners.)

        Reply
  9. The Rev Kev

    I wonder if this was more a case of peak-billionaire instead of peak-Amazon. Seriously – think about it. Sit back and think what would happen to America if all the billionaires in America jumped into their private jets and flew off to Galt’s Gulch for good. Would they be missed? Would the country be better or worse off if they all went? I am thinking that people are becoming aware of what a strain on the country billionaires impose on the country between rigging laws, elections and the like as well as degrading working conditions, the environment and apparently everything else they touch.
    I am wondering too if what gave the final push back against Amazon was the news that this multi-billion dollar corporation pays zero taxes. Let that sink in. All the business they conduct using public roads, laws, facilities, etc and they pay zip for it all. And yet they expect taxpayers to line up to hand over billions for the privilege of what exactly? I think that after this fiasco that Cuomo has got some explaining to do and trying to blame AOC is not going to cut it. To me he looks like a sucker that almost let New York be taken to the cleaners but has now been discarded by Bezos like second-hand toilet paper.
    On last thing. Lambert has referred to ratface Andy so I was wondering the significance of that inflatable rat….

    Reply
    1. Pat

      I’m not sure if the question is serious or not. The inflatable rat is a large obvious ‘picket sign’ that is used in NY for spot strikes on construction sites and companies for unfair labor practices particularly the use of non union labor. As a tool for labor, I’m thinking that the inflatable rat only resembles Andy and does not have any familiar relationship. (Union leadership* have declared support for Cuomo over the years, but he really has done little for most of them. Think of it like the promise of Obama’s comfortable shoes…)

      *I also must note that various leadership of unions often support things that really do not advance their unions or support their membership and this is a problem for many union supporters.

      Reply
    2. False Solace

      I agree with your theory. It can’t be a coincidence they released this on the same day it was reported that Amazon paid $0 in taxes on $11 billion of profits last year. Get the news to blame a bunch of squabbling leftists for chasing Amazon out of NYC so no one spends time thinking about a company so deranged with greed and loopholes it deigns to pay no taxes.

      Reply
    3. Bob Anderson

      AOC has a lot of problems.
      1.She is of mostly Spanish descent, yet puts brown makeup on her face to make herself look more “mixed”. I had a friend who lives in NYC and saw her first hand yesterday at one of the anti-Amazon rallies, was shocked how ‘pale’ she was with no makeup. Uh………duh.
      2.This leads to the next problem. She lies about her background. Her father was a upper middle class Architect. She was no poor girl until he died and the family was overextended. Sounds bitter and that doesn’t come off well when you lie.
      3.She has ADHD, clearly is impulsive and is looking for stimulation like all ADHDians. I could see her falling for Adolph Hitler if it gets her off.

      She is turning into a major major liability.

      Reply
      1. Clive

        1) is beyond my pay grade so I’ll let that pass but 2) is meaningless. My family started off seriously poor. My mum grew up in a subsistence smallholding in 1950’s rural Wales (very impoverished for those not familiar) in scarcely believable deprivation — a dirt floor, no running water (you had to draw it from a single pump in the scullery) and no electricity until the mid 50’s. My dad’s dad was a bookies runner who on at least one occasion got severely beaten by the mob types who ran the (illegal) off-course betting. Peaky Blinders glamorises and sanitised the brutalities of the English semi criminal underclass which a fair few urban poor had little choice but to get sucked into.

        Both my parents got into college thanks to a meritocracy system which gave a free university education to the academically adept but even when they’d graduated, their families had no money to give them any sort of start in life. Up until I was about seven or so, I was constantly aware of how marginal our family was financially and it was a precarious existence with only absolute essentials catered to and then not guaranteed. A car repair cost could mean soup and beans on toast for a month. Then my dad got a well paid job overseas and we lived seemingly like royalty. When we returned to the U.K. he got a highly paid consultant job then set up in business and, luckily, it was a money spinner. So I never experienced want or need again and neither did my parents. But the years of grim struggles were never forgotten and I still think of that even now.

        So, we (and I) were the opposite of AOC (we were poor then we got rich). But I don’t get how moving from one to the other — whichever way round you experience it — invalidates either experience. Whichever way round it happens, the contrast is always markedly embossed on your psyche. You grow up able to understand and appreciate each of the two different worlds — but seemingly you’re never able to live entirely comfortably in either.

        As for 3), I can really manage quite happily without the sub-daytime talk show level of pop psychology.

        Reply
        1. Joe Well

          Clive, thank you for sharing that. My parents had a similar story to yours in North America, among the many struggling people kept afloat by the soft socialism of the postwar New Deal. Their stories of want have always humanized poverty for me; the first people I think of when I think of poverty are my parents and other older relatives.

          And I’ve met many, many, people who are so deeply generationally ensconced in the top 10% that economic anxiety is only an abstraction for them.

          Reply
      2. Yves Smith Post author

        I call bullshit.

        First, architects are NOT “upper middle class” You spend a ton to get educated, spend another few years getting licensed, and make a blue collar income, but you get invited to parties with white collar people. I personally know grads of the Harvard and MIT architecture programs who were working for top architecture firms in NYC and in the 1980s, they made $30,000 a year. With a Master’s degree and having been licensed, they were making what a college grad would make.

        The only way you make decent money as an architect is if you go into development.

        Second, her family lived in the Bronx when it was dangerous. And having lived in New York City at that time, I am not exaggerating. If you walked in Manhattan above 96th Street in those days, you were taking a risk. I will spare you personal and second hand stories. No one, particularly with children, would live there if they had better options. See these photos from a search on Google:

        https://www.google.com/search?q=bronx+in+the+1980s&tbm=isch&source=univ&client=firefox-b-1-d&sa=X&ved=2ahUKEwi–_SY377gAhUIvlkKHfWNBMMQsAR6BAgAEAE&biw=1074&bih=613

        Reply
        1. Which is worse - bankers or terrorists

          Thanks, Yves. I’m an architect and a Yale grad, and you have this spot on. Especially NYC pay scales.

          I’ve since become a real estate developer.

          Reply
      3. Joe Well

        If AOC is hated by people who espouse bigotry about ethnicity and mental health, her fans will only love her more.

        Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me–and I welcome their hatred.

        FDR, Second New Deal Address

        Reply
      4. The Rev Kev

        Dude! If you don’t like the girl just say so. Maybe latino chicks just don’t do it for you. But if you are going to attack her makeup, her ancestry and possible medical issues, do you think that you could spare a few electrons to actually talk about other stuff too? Maybe her policies and what she is fighting for? Dragging Hitler into the argument just means that you have lost your whole line of reasoning.

        Reply
      5. Ape

        “She is of mostly Spanish descent, yet puts brown makeup on her face to make herself look more “mixed”.”

        Wow. Who are you playing to here? What demographic doesn’t find that racist? It’s one step from calling her a race traitor – and it’s followed by a class traitor implication.

        Who did you hope to convince?

        Reply
      6. Otis B Driftwood

        Judging from this obnoxious comment, AOC is making all the right enemies. And judging from the many responses to this, she is making all the right friends.

        She’s the real deal, like it or not, among the first wave of (or second if you count the Sanders ’16 campaign) of genuinely progressive legislators that gives hope that our system is not beyond redemption.

        I’m glad to see the rats scurrying out of the dark corners, snapping and biting in a panic. They’re scared. And they should be.

        Reply
      7. oh

        Fox News would be proud of you.

        AOC has accomplished more in 2 months than any other in Congress. Put that in your pipe and smoke it

        Reply
    4. Ping

      I see this as symbolic or watershed to resist/question the trend of exploitation whereby companies dangle “jobs” to cravenly extract precious public resources especially in areas with underfunded schools, public services and crumbling transportation.

      I am writing from Arizona that is handing out incentives like water; especially unnecessary in Tucson, an international import hub from Mexico, where we have an Amazon warehouse distribution created with non-disclosure agreement. Who knows how much taxpayer money was provided in “incentives”.

      We hear so much about the trickle down effect of jobs but yet our citizens are constantly asked to increase sales taxes, property taxes with a steady increase of fees and many expenses to fund essential public services. Obviously the “trickle down” has not arrived for the infrastructure these companies use extensively and they are simply leaching.

      In my neighborhood, Tucson just spent $52 million for Caterpillar’s new building (nearing completion) in a neighborhood suffering from gentrification with parks and roads falling apart. Arizona’s education funding is among the nation’s lowest.

      I doubt Caterpillar is hiring locally except janitors, it appears the building housing 600 offices will accommodate transferred engineers.

      This savage capitalism is wearing thin. Capitalism works best for everyone with transparency and sensible regulation.

      I feel strongly that governors and mayors across the US should unite behind a well structured guidelines so corporate behemoths can’t play states off against each other.

      Reply
      1. Oh

        Yes, enough f this socailism for the rich and Robin Hood in reverse policies. The governments that push these policies need to be fired en masse.

        Reply
  10. Carolinian

    Thanks for the interesting post. Clearly the whole process was about Bezos and his ego from the getgo. It was his bid to get cities across America to show him some love and here in upstate SC our tiny sister city even–ridiculously–put in a bid.

    No doubt all of the factors mentioned in the above post played a role but perhaps that NY Post headline–BEZOS EXPOSES PECKER–was the last straw. He realized that tough minded New Yorkers were going to be constantly making fun of him. If you are a megalomaniac who seeks to transform the retail landscape of an entire country (or world) then carping is not allowed.

    Reply
  11. Summer

    The Amazon entity is part of the TINA mindset. It’s simply feral.
    It can not be negotiated with and you have to understand: The point is for them to “have it all”. Amazon wants everything and believes it should have it.
    Again, it’s a mindset that, even if you don’t call it TINA, can only be defeated. And it is a matter of self-defense to be ready when you encounter it.

    Reply
  12. Darthbobber

    I’m inclined to agree with the view that Amazon/Bezos decided that the project was unneeded. If they do announce plans for a similar facility in one of the numerous cities that were on the shortlist I’ll reconsider, but my guess is that that won’t happen.

    It may also have belatedly occurred to them that the New York media bring a national spotlight to your antics in a way that the Seattle media does not, and that the more politics-focused Washington media does not.

    Reply
  13. tim

    After a 12 month cluster**** Boston “won” the competition for GE’s new HQ with massive state and city subsidies including building a private heliport so executives didn’t have to endure the 15 minute commute to the airport. Now its going the way of Foxconn and Amazon.
    GE to shrink its Boston
    footprinthttps://www.marketwatch.com/story/ge-to-shrink-its-boston-footprint-give-back-87-million-in-incentives-2019-02-14

    Reply
  14. Joe Well

    Thank you, NC, you gave me the fortitude to cancel my Prime subscription.

    I had a couple last minute purchases to make, like a replacement blender jar. No idea where I would have gotten that otherwise. The manufacturer was going to charge three times the cost for shipping. Wish me luck going forward in a denuded brick and mortar retail landscape with lots of dodgy ecommerce retailers. There is a reason people use Amazon after all.

    Reply
    1. ChiGal in Carolina

      Bravo! (Useful Tip: if you don’t look at the Amazon prices it won’t hurt so much. Alternatively, think of every dollar saved as equal to one lash to the back of another human being tied to a whipping post.)

      Reply
    2. Catman

      I go direct to manufacturer far more often than I used to. So many companies have beefed up their ecommerce that it’s becoming easier to do it.
      And as insane as this suggestion is – I’ve found Walmart to have lower prices than Amazon for the same thing and a better overall shopping experience. Better tracking emails. Better service. I never thought I’d say that.
      Interesting to think of Bentonville, too. A strange place to be sure. But it’s interesting to see how people come to it. Walmart’s not asking a city the size of NYC or even Seattle to fundamentally change.

      Reply
      1. jrs

        ACTUALLY Walmart is asking for radical (maybe the wrong word) change, asking a city, well how about asking city school infrastructure all across the country?

        Charter schools, Walmart backs them. So when people resist charter schools that is part of what they are fighting.

        Shop at Walmart if you like, hey even support charter schools if you like, the school system isn’t really my issue. I just don’t want people to pretend Walmart is other than it is just to criticize Amazon.

        Reply
      2. Paul P

        Amazon is a website intermediary between seller and buyer.
        At least it started that way before it became a cloud service.
        I’m late to the discussion, but is it impossible for NYC to
        launch its own website to compete with Amazon?

        I’ve bought items online from small businesses and they
        do just as well as the big companies.

        Reply
        1. Joe Well

          It’s primarily a shipping and logistics company and they do an excellent job except the fact that they treat people horribly.

          Reply
    3. False Solace

      My prime membership runs out tomorrow. Should have canceled it years ago.You know, you can still buy things (if you must) from Amazon even if you don’t have prime. Free shipping that costs $10/month isn’t free, LOL.

      Reply
      1. Joe Well

        Free shipping that costs $10/month isn’t free, LOL.

        True, but I had a discounted membership the prior year so it was only costing me $5/month, and with the Prime movies and the shipping I was hoping I was costing Bezos more than I was making him. But the issue is that my smiley-boxed packages had people’s sweat and tears on them.

        Reply
  15. Tom

    This reminds me of something I read here a while ago (can’t find now) about there being a tendency in silicon valley culture to believe they can ignore any established domain experts because they are can always find a better new solutions – overweening arrogance coupled to an inability to think outside their standard tech-centrist models.

    Conventional domain experts in PR, labor relations and government might have been able to steer them to their $3B winnings.

    But Yves theory about Bezos’ personal need to treat staff like slaves may be as likely.

    Reply
  16. Bob Anderson

    Amazon is just another sign of moral decay since 1973. The consumption based madness, the club for debt free market nonsense that turns people into junkies. People just want quick fixes rather than strong tribal accomplishment. They debase hedonism into blowing your dopamine receptors out by 20, creating depression.

    If the 2008 debt collapse had been allowed to go on, Amazon would be toast right now. Bezos only exists due to debt and cheap products that Americans are forced to overbuy. At the heart of this is financialization which runs the debt schemes that creates Bezos.

    Reply
  17. Joe Renter

    Nice article Yves.
    Amazon is one of main reasons I want out of Seattle. One of my in-laws share the same dentist as Jeff the Bozo. I fantasize hitting him with a cream pie when leaves after getting his teeth cleaned. That is just a start, water boarding perhaps is a better option.

    Reply
  18. Rajesh K

    This site would occasionally post an article from WolfStreet and I think Wolf has the best and simplest explanation: “Prudent cost-cutting move artfully dressed up as response to local politicians “.

    Reply
  19. Tim

    slightly off topic…can somebody with an Alexa tell me what happens when you say “Alexa, call that idiot Jeff Besos, I want my money back.” ?

    Reply
  20. Craig H.

    The watershed moment that led Amazon to reconsider coming to Queens came on Feb. 4 — when a fierce political foe was appointed to a state board with the power to thwart the project, said sources involved in the discussions.

    Like I was saying months ago Bezos should choose Dallas for the regulatory environment. If you have never seen commercial construction happen in Texas it is quite the sight. What takes two years to get built in California is up and doing business in four months in Texas.

    Reply
  21. Chauncey Gardiner

    I have wondered if Amazon’s initial decision to place HQ3 in NYC was in part driven externally by Wall Street bankers concerned about losing relative political power to metro areas that are economically dynamic and have been experiencing more rapid economic and population growth, as well as gaining unrealized potential political influence. Bezos and Amazon are creatures of Wall Street IMO, both in terms of background and values. In any event, I view this as a constructive development.

    Reply
    1. Yves Smith Post author

      No, Amazon does not care about or need Wall Street. It is cash flow positive and so does not need to access the capital markets. This was all about where Bezos wanted to live.

      This guy called it:

      https://www.businessinsider.com/amazon-hq2-will-be-new-york-or-dc-scott-galloway-predicts-2018-2

      Reply
      1. The Rev Kev

        That all makes sense. Galloway called it. That extra 10 minutes for that drive between his home in New York and the proposed HQ in that city must have been what led him to demand a helipad to be built for his use. Apparently a 20-minute drive is his limit.

        Reply
  22. Dirk77

    I am very sorry I missed this yesterday. Any chance Arlington will do something similar? I mean the subsidies to Amazon for the one there seemed as unnecessary and actually harmful to the community, state and competitors as the NYC one. I had hoped the blackface controversy would help things along, but I don’t know. Any thoughts or links are appreciated!

    Reply
  23. Peter L.

    “The highest level of backing found in two polls was 56%, and that fell to 46% when respondents were asked if they supported it in light of the subsidies. I would love to see how the survey questions were designed, because the results are completely at odds with my teeny survey, which included Queens residents, some of them in tony Forest Hills and thus well away from any immediate effect. All opposed the scheme, due to the reduction of affordable housing in Queens and the magnitude of the subsidies.”

    According to NYT the 46% is for all New Yorkers and comes from this question wording:

    “As you may know, Amazon will be receiving roughly 3 billion dollars in tax breaks and other benefits from the state and the city as part of its deal to locate its new headquarters in Long Island City. Amazon says it will create 25,000 new jobs. Do you support or oppose the incentives that have been offered to Amazon?”

    It is probably important the question juxtaposes the “tax breaks and other benefits” with “25,000 new jobs.” It’s too bad that the survey didn’t use an independent estimate of the likely number of jobs created.

    The story is “‘Wrong Side of History’: In Queens, Amazon Deal’s Demise Reveals Deep Divisions” by Corey Kilgannon and Sean Piccoli, on Valentine’s Day, 2019.

    I’m interested to hear people’s thoughts about the “deep divisions” framing of the story. In my opinion, nothing in the story suggests profound disagreement between New Yorkers. It clearly shows people don’t agree, but nothing in the story shows its due to anything more significant than different judgments about the costs and benefits to people.

    Reply
  24. kemerd

    I am in IT business and I can tell you that amazon’s reputation is extremely bad among IT professionals, as well. It appears they want to use just amazon name to hire top talent for less than going rates, and make them work really hard.

    The number of suckers willing to take such deals is apparently dwindling.

    Reply
    1. Dirk77

      I wondered about that as the mistreatment I’ve read about I thought surely must include everyone. And if Amazon gets a subsidy, then that presses other companies to work their employees harder just to compete. Another reason to oppose the Arlington HQ2. Thanks.

      Reply

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