Amazon Abandons Plans For HQ2 In New York City
Thanks mostly to political opposition that misrepresented the nature of the deal it had made, Amazon has abandoned plans to locate parts of its new headquarters in New York City.
Four months after announcing the split location of its planned HQ2 headquarters in Northern Virginia and New York City, Amazon announced today that it was pulling out of the New York half of the deal due to heavy opposition from some city officials upset by the financial and other concessions granted to the company:
>Amazon on Thursday canceled its plans to build an expansive corporate campus in New York City after facing an unexpectedly fierce backlash from some lawmakers and union leaders, who contended that a tech giant did not deserve nearly $3 billion in government incentives.
The company, as part of its extensive search for a new headquarters, had chosen Long Island City, Queens, as one of two winning sites, saying that it would create more than 25,000 jobs in the city.
But the agreement to lure Amazon stirred an intense debate about the use of public subsidies to entice wealthy companies, the rising cost of living in rapidly gentrifying neighborhoods and the city’s very identity.
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,” Amazon said in a statement.
The company’s decision is a major blow for Gov. Andrew M. Cuomo and Mayor Bill de Blasio, who had set aside their differences to bring the company to New York.
But it was at least a short-term win for insurgent progressive politicians led by Representative Alexandria Ocasio-Cortez, whose upset victory last year occurred in the area where Amazon had planned its site. Her win galvanized the party’s left flank, which mobilized against the deal, and on Thursday she seemed to revel in the company’s retreat.
Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world. https://t.co/nyvm5vtH9k
— Alexandria Ocasio-Cortez (@AOC) February 14, 2019
As opposition mounted, the governor and the mayor met on Monday in Albany and discussed how to save the deal, according to a person familiar with the conversations but who was not authorized to discuss them.
After the meeting, Mr. de Blasio spoke to a senior Amazon executive by phone on Monday and the mayor was told that the company remained committed to coming to New York, the person said. Mr. de Blasio was in the process of connecting with Jeff Bezos, Amazon’s chief executive, the person said. It was unclear if he did.
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, the person said.
Amazon’s leadership agreed to pull out of New York on Wednesday evening, according to two people familiar with the decision. The company did not inform the governor or the mayor until Thursday morning, shortly before posting its announcement.
Mr. Cuomo and Mr. de Blasio reacted in starkly different ways to Amazon’s decision. The governor blamed newly emboldened Democrats who now control the State Senate for derailing the project.
He said in a statement: “A small group of 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.”
For his part, Mr. de Blasio seemed to shift away from his backing of the deal
“We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world,” Mr. de Blasio said. “Instead of working with the community, Amazon threw away that opportunity.”
Here is the statement released by Amazon:
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 re-open 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.
The plan to bring Amazon into Long Island City was supported by all of the top politicians at the state and local levels in New York, and that it had significant support from the politicians that actually represent the area where Amazon would have been located and by New Yorkers generally. Despite that, activists in other parts of New York City mobilized against the deal and managed to misrepresent significant parts of it before the Governor, the Mayor, or Amazon could set the record straight. While it’s true that Amazon was receiving some tax abatements in exchange for locating part of its second headquarters in Queens, the anti-Amazon activists misrepresented the nature of these abatements to make it seem as if actual taxpayer dollars were going to Amazon in exchange for their agreement to locate part of their headquarters in New York. This led several anti-Amazon activists, including Freshman Congresswoman Alexandria Octavio-Cortez to incorrectly state that Amazon was “taking away” tax dollars from schools, mass transit, and other responsibilities of government. In reality, that, of course, was not the case and Amazon and the people who would have worked in Long Island City would have ended up paying taxes and otherwise contributing to the economy of New York in innumerable ways. Indeed, according to even the most conservative estimates, the Amazon project would bring something close to $1 billion per year in revenue and economic activity to the region over the course of 25 years, perhaps even more than that. Instead, New Yorkers will get nothing and the activists will get a pyrrhic victory at best. There will be no “saved” tax money to spend, there will be no 25,000 jobs, there will be nothing.
There are, of course, good arguments to be made against some of the deals that states and localities make with businesses to locate corporate offices and factories in certain locations. This is particularly true in cases where companies are getting huge tax subsidies or where they are not contributing to the costs that are associated with new construction and the increased costs that come with the infrastructure and other changes that will be necessitated by such projects. However, in this case, it’s clear that the activists were completely misrepresenting the terms of the agreement with Amazon, and essentially lying to their supporters and other New Yorkers about the alleged “cost” of the deal with Amazon. The failure of either Governor Cuomo or New York City Mayor Bill DeBlasio to adequately explain and support the deal is the main reason it failed, but one can also put some of the blame on Amazon for not doing a better job on public relations, but that may be a reflection of the fact that they were already moving toward pulling out of the New York City half of the HQ2 deal largely because it wasn’t worth the political headaches.
What this means for the future of HQ2 is unclear, and isn’t made clear in the statement that Amazon released yesterday. Vox assumes that this means that the entirety of HQ2 will now end up in Northern Virginia, which has been far more welcoming to Amazon than New York City has been. This would seem to be the most likely outcome, and it seems likely that at least some of what would have gone to Long Island City will end up in Crystal City instead. At the same time, though, it’s also possible that Amazon will decide to take the New York half of the HQ2 deal to another one of the locations that it was considering before it made its announcement of the Virginia/New York decision in November. Whatever the case, though, the economic benefits will go to Virginia and wherever else Amazon decides to locate. I hope Ocasio-Cortez and the other ill-informed New York activists who helped torpedo this deal are proud of themselves.
You know they are.
While it’s true that Amazon was receiving some tax abatements in exchange for locating part of its second headquarters in Queens, the anti-Amazon activists misrepresented the nature of these abatements to make it seem as if actual taxpayer dollars were going to Amazon in exchange for their agreement to locate part of their headquarters in New York.
Dude, there aren’t actual dollars being collected from taxpayers. It’s all paper and data. Tax abatements are exactly the same thing as tax payments. Tax abatements have been a giveaway to high-end real estate in New York since Bloomberg.
I was not deeply opposed to the deal. But de Blasio and Cuomo misjudged how opposed New Yorkers are becoming to the direction the city seems to be heading under the rule of high-end development. They just gave these kick-backs to Amazon, a company that prides itself of having its employees piss in their pants and cry at their desks. And in return–jobs? So there’s more finance bros in packs of ten buying 20-dollar cocktails at some tacky W’burg lounge where all of the staff hates them?
I don’t have a dog in this fight, but if the net effect is to stiffen the spines of politicians who fall all over themselves to toady big corporations, good. Tech is expanding quite nicely in the NYC area without giveaways. This race to the bottom, this contest to see which state or locality’s pols will most readily bend the knee to big money, is unseemly and ultimately damaging to workers and citizens.
I’m ok with New York City deciding it doesn’t want Amazon. I’m ok with people deciding Amazon doesn’t deserve billions in tax breaks, especially people in an urban center that is already thriving.
And I find the whole “Jeff Bezos is EEEEEVIL” shtick to be tiresome. He’s about as evil as me, or Doug or AOC or most other people on the planet. There are some who are more evil, and some who are less, but he’s kind of in the middle of the pack. He is a lot more powerful, and I endorse the idea that we could stand to slow down people who are that powerful, and maybe try to reduce inequality.
But it’s an evergreen thread of American discourse to denounce your rivals as more evil than Satan. Sigh.
The big losers here are the real estate speculators that have been buying up properties around LI City and Queens, and it couldn’t have happened to a better bunch. NYC like all coastal cities has a housing affordability crisis and Amazon coming to LI City would have blown housing costs through the roof for one one of the few areas in the region that is “affordable” (and I uses the term affordable meaning relative to NYC). Amazon doesn’t need the subsidy and here’s hoping the they don’t extract more dollars from Nashville and northern Virginia.
The Congress and the Federal government should really put a stop to the location bribery.
Shit, I wish we’d have said “no” too. Traffic is already horrible here, housing is already ludicrously expensive, and we already have more than our share of six-figure salaries. We don’t need to be Silicon Valley East. Screw that.
Jobs are very good but let’s be real here: Amazon was never going to deliver on the number and quantity of jobs they stated. No project ever does.
We see this over and over again. How many factories swoop in , claim they’ll hire XXXX amount of people, take all that government money and maybe, MAYBE the city gets XX jobs that pay less then advertised. Why does a company need a tax break it has no intention of passing along in some form to its employees or customers? Most companies are gone by the time the break expires and the city can recoup its money or they’re threatening to leave unless those sweet, sweet gimmes keep flowing. It’s bribery at best, extortion at its worst.
I want people to be able to have jobs – good-paying, can go home and not want to die jobs. That we have to bribe companies to even conside moving to a place and doing that is a huge problem. That a company coming to a town can make things *worse* is an even bigger one.
This is a victory against socialism for the rich.
Doug, I think you missed the boat on this one. This deal was negotiated in the dark of night with the community completely unrepresented. I’m a local resident and many of us opposed the deal. We have subway issues and housing issues that prevent NY from fulfilling its economic potential. Amazon was only going to make those problems worse. Also, Google has many employees in NYC without getting a ransom payment. These corporate welfare deals rarely work out for the local residents.
Moreover, while I understand why some dying cities would make such a deal, NYC has no reason to do the same. Any sane business that needed educated, hard-working, creative and ambitious people would long to open in NYC. We don’t need to beg.
Finally, once you begin paying ransom, every other business will want a piece of the action.
Doug, you seem to be contending that forgiving billions of dollars in taxes is significantly different than having them pay the taxes and then just giving them billions of dollars in cash. No. The reality is that the long term businesses already in the area will have to pay those taxes while Amazon is forgiven. And while it makes sense for cities to pick a depressed area as a development zone, that’s not what was happening here.
The tide seems to be turning against politicians giving massive giveaways to wealthy corporations and sports franchises, and to my mind it’s not a moment too soon. These deals are usually bad on their face, and then the companies rarely live up to their side of the agreement but are forgiven from any penalties that had been negotiated or, more often, there is no one given the job of even checking whether the company honored its promises. And of course, it merely reinforces the message for all the local companies that if they become successful the first thing they should do is threaten to move and start playing the suckers off each other.
I think the kiss of death for the project came when Amazon was asked to pledge to remain neutral if workers in New York wanted to unionize, and they refused. At that point it was clear that Amazon had no interest in becoming part of New York, and instead planned to treat NYC like a colony onto which they would simply impose their own way of doing things, rather than adjusting to local mores.
Oh, and the second they got the slightest pushback, they didn’t bother to negotiate — they stormed out. Because if the little people are going to be allowed to question Amazon, Amazon ain’t going to stick around.
I order through Amazon multiple times a week, they published a series of my books and treated me fairly and honestly — I really admire this company.
But in this deal they acted like arrogant occupiers, and they are no loss to the city.
@wr:
You and tens of millions of Americans.
I simply cannot understand why you’d want none of that money to flow through your community. Is it perhaps because NYC is stacked already?
Tyler Cowen on the subject:
I suspect that NYC will do jus’ fiiiine without Amazon. Let it go elsewhere. I’m sick and tired of companies playing desperate communities off against each other looking for more and more funding, more and more tax breaks, etc. Because SOMEONE is going to have to pay for the increase in utilities and to cover the tax breaks the company is getting , and far too often it’s the poor individual human taxpayers of said location.
(I’m also into increasing taxes on corporations in general. Charge them for their access to possible customers.)
@KM: Many years ago I did some temp work for a smallish company, a sub of a large Japanese company. While I was there they had a layoff. The newspaper story said X people, Y percent of total employment. These numbers implied total employment way larger than it obviously was. When I asked, I was told they’d lied to the county about jobs to get a tax abatement, and now had to keep lying in a manner consistent with the original lie.
If you can make it there, you can make it anywhere.
If Amazon can’t make it in NYC without subsidies then nobody can.
@grumpy realist: I am a customer. After a day at work, I often look forward to going shopping at outlet malls, home product stores, WalMart, Target, and a few other stores. I enjoy their atmosphere, friendly workers, and selection of items. For me, getting out to those places is the high point of the week.
I enjoy getting out among the people. I enjoy the different food places available. I sometimes buy things on line that I can’t get without a long drive, such as some hard to find auto parts, computer parts, special radios, and sports jerseys.
I am a customer. I don’t think that a company or store should have to pay some fee for access to me. I am thinking here of small, family businesses such as nail salons, coffee shops, book stores, candy stores, video game shops, and thrift stores.
@James Pearce: “I simply cannot understand why you’d want none of that money to flow through your community.
What I want or don’t want has nothing to do with what happened here. No one asked my advice, and I’m not sure what I would have said if they did.
I will say I’m kind of tired of the mantra that we should let rich people’s money “flow through” a community, as if being that close to it somehow is a boon. If they actually plan to leave some of it in the community, that’s actually a good thing. In this case the company was going to be putting huge strains on the local infrastructure and offering to do absolutely zero to compensate for that.
@Tyrell: If they’re small independent stores the population that they’re reaching out to is much smaller, so they’d be charged much less, if anything.
If you’re depending on access nation-wide and with nation-wide branding why shouldn’t the US charge you as a company to have access to all those potential customers?
Also–one would think you have never heard of an exponential function. Learn some math.
The tax abatements are taxes that other businesses — businesses that are already in the area, would end up paying.
The competitive shakedown that Amazon made cities engage in was disgusting. Amazon can afford to pay its share.
I’m genuinely surprised to see Doug apparently in favor of the shakedown and the government picking winners and losers. Not very libertarian.
@Tyrell: Tyrell, I couldn’t agree more. I, for one, will never get my nails done via Amazon.
Also, I would much rather they put there 25,000 aka maybe 15,000 high paying tech jobs in a purplish state.
The average Amazon engineer stays about two years, and they bring in a lot of those engineers. They tend to stay in the area, as other companies pop up to hire Amazon leftovers. It’s not a fixed number of jobs they create, they will remake the host city into a tech center.
Software engineers tend to vote Democrat. Injecting 7,500 people per year into a region, voting 60% Democrat, 30% foreign not voting and 10% Republican. That can change a city, or even a state in a decade or two.
Amazon will totally screw up the city, don’t get me wrong, but they will also shift the voting patterns. New York City doesn’t need to be more blue. Raleigh-Durham? Sure. We’re close to turning Nort Carolina blue, and this would push it over the edge.
@Gustopher: Although I agree with the thrust of your comment, there are a few nits I would pick. First, Amazon is doing nothing wrong by trying to take advantage of the money that governments throw at them. In fact, they would be financially negligent if they didn’t and would almost certainly open themselves to shareholder lawsuits. No, the blame is entirely on the government. Study after study shows that a) companies rarely honor their promises and are almost never monitored to see that they do and, b) even if they were to honor the promises it would still be a bad deal.
The classic case of this is the Foxconn plant in Wisconsin. The state and county have already borrowed many millions towards their eventual $4B subsidy, built roads, put in power and sewage and used eminent domain to seize hundreds of businesses and homes, evicted the owners and knocked them down. And then Foxconn said, “well maybe we are not going to build quite that big” and month by month whittled down their promise over the course of a year until at the end of January they said, “hey, so sad, but we are not going to build anything at all.”
Reply All did a good podcast on it and the morons leading the charged talked a pretty Libertarian game, although they were also Trumpers so it’s hard to tell just where their delusions sprung from.
@Gustopher:
As much as I like your logic moving to a pup,e stat would just defeat Amazon’s purpose. Those states are primarily in the South or are the square states, and one of the reason Amazon is making this move is to attract the best and the brightest who can find a job anywhere. Amazon is trying to recapture the cachet they had at the turn of the century. They aren’t going to get that by moving to Kentucky or New Mexico. Companies go there for two things: low wages (and a government that will actively screw its own citizens to keep those wages low), and lax environmental regulations. And both of those things drive people with options away.
@MarkedMan: Raleigh-Durham, NC; Austin, TX; and Salt Lake City, UT all have significant tech sectors. All are in red states (NC is close to purple).
Pay people tech salaries in those areas (Amazon pays well, and the stock is a large component), and they can afford to live somewhere nice, even in Texas.
Amazon is expanding to other cities because Seattle is getting expensive, and it’s harder to bring people in. And they have tapped out the Seattle market for engineers.
Amazon also hires a lot of junior engineers, fresh out of college. There are decent colleges in Texas and North Carolina.
And, oddly, not all engineers like gray drizzle or snow. Hard to understand, but sunshine appeals to them.
The people the government actively screws over? That’s poor people. The barista class will be displaced, and get angry, and start voting Democrat.
@Jay L Gischer:
I like Amazon, though I still think of it as an online bookstore that sells DVDs as well. I’ve ordered lots of books from it, and for the past few years some ebooks and going on 100 audio books through Audible.
But.
Some of the way the business is run, as regards third party sellers, is brutal, ruthless, and with very little in the way of regulation by Amazon. There was an article in The Atlantic about it recently (sorry, I don’t have the link handy). Granted a great deal of the problem is market saturation and people who teach seminars on selling on Amazon for a fee, amid much hype.
It’s a bit like Uber. I once talked to an Uber driver here for all the 45 minutes it took to get me home. he had been in from the start. he said at the beginning it was great and he made a good deal of money working only 6 to 8 hours per day. But as more people got to driving Uber, the money went down and the hours went up. he claimed he got ahead of the game by investing in cars and renting them to new Uber drivers for a fee. And that in the last months of 2016, most of his income came from bonuses for recruiting new drivers.
That’s completely awful on many, many levels, and Uber certainly did nothing about it. You could argue a new driver would be better off renting a car by the day, than buying one or leasing one long term. After all, if things didn’t work out, he can just quit and find a new job. Sure. But the thing about getting more drivers when the existing ones are working longer and longer shifts for less money, words just fail me. it seems like a multi-level marketing scam.
That’s not quite what I gathered selling on Amazon is like. no one recruits new sellers, after all. but people make more money gaming the system, quite unethically, aiding those who are gamed by others, or selling seminars on how to make the (illusory) big bucks, than by actually selling on Amazon.
It’s almost certain in the beginning one could make a lot of money by selling widgets online, and giving amazon a cut. But, like Uber, as the market filled up, money became scarce.
Amazon could do a great deal more policing unethical sellers gaming the system, and perhaps even limiting new sellers for a saturated market that cant take them. But, keep in mind, if you invest $10,000 in widgets and go broke, but sell, oh, $1,500 worth, Amazon still makes money. Your risk, their profit.
@Tyrell: YOU are a shopper not a customer. That’s not a bad thing; in fact shoppers like you make the capitalist system work. But Amazon does not charge a fee to provide access to you; they charge a fee to advertise the products of thousands of small scale sellers–most of whom don’t have a store for you to shop at. Moreover, most of the businesses that you mentioned are not impacted by Amazon. For example the last time I ordered a latte online, it arrived cold (and mostly soaked into the packing materials and box). I also agree with Marked Man in that I’m having trouble figuring out how I would disconnect my hand from my wrist successfully to send it to an Amazon associate for a manicure.
Book stores are different, of course, but I don’t buy books on Amazon unless I can’t get them locally, and usually, I only buy ebooks from Amazon (and don’t usually pay more than $2 for them.)
@Gustopher: Jeff Bezos did not get to be the richest guy on the planet by paying his “fair share.” What Amazon can afford and what he wants to pay are clearly in different (perhaps alternate) universes.
@Just nutha ignint cracker: Amazon started in Washington since it was a small state with a good tech community. Small state was important, since their main advantage in the early days was no sales tax because of no presence, and they didn’t want to cut California out of their potential customers.
For years they lobbied against any type of inter-state sales tax collection.
Then, when they had fulfillment centers and dev centers in almost every state, they flipped their lobbying overnight to try to get inter-state sales tax collection. So no one would have a price advantage over them.
They play the game well.
(Another fun example — employee stock vesting is skewed to years three and four, since even their head office employees only tend to last two years)
@Gustopher:
The problem is not salaries, is that if a engineer loses a job he does not have to move to another part of the country to get another job. That’s why they are stacked in Silicon Valley or Seattle. Besides that, no one in their right mind would want to live in a lot of these Red States with real ‘Muricans.
@MarkedMan:
No. That’s more complicated. Part of the problem is that local governments uses tax incentives for all types of businesses, from movies to retail(!). Basically every new car plant in the world involves some type of tax incentives.
That’s something that would need to be dealt in the federal level, with some type of legislation creating some limits to these subsidies/incentives.
Kathy’s obvious question of the day:
If:
Tax abatements incentivize investment
And:
Investment produces tax revenue, economic activity, and jobs
Then:
Why aren’t tax abatements like Amazon’s offered to all new businesses? In proportion to business size/revenue, of course.
@Gustopher: indeed, Raleigh would be a good choice. If you’re based in Raleigh you are within 30 miles of NC State, UNC chapel Hill, Wake Forest, and Duke, not to mention about a half-dozen lesser-known colleges.
There’s a reason red hat is located on NC state’s campus, SAS is right down the street, and IBM had thousands and thousands of people there.
@Gustopher: Good point. Reasearch Triangle Park is definitely an anomalie in a Southern State: universities that the locals take pride in for their educational credentials rather than their sports teams. And it shows – it has a great tech center and world class R&D. Van Der Bilt also punches way above its weight. Atlanta has a lot of things going for it. So maybe I’m wrong. Or maybe those are anomalies. I know that in the 90’s the rest of the South, including most of Georgia, thought of Atlanta as a Yankee infested sewer.
I don’t know. I just took my name out of contention for a job in Dallas because I feel too old to move to a state where people proudly fly the confederate flag and honor statues to the Ku Klux Klan. And I’m a middle aged American white guy.
@Andre Kenji de Sousa:
Seattle wasn’t a big tech hub 20 years ago, or even really 10.
There was Microsoft, and small Amazon, and then some insurance companies. The ex-Amazon folks began staying, forming small companies. Google, Facebook and Twitter came around to poach those employees, and then everyone else set up an office here.
But before that? Amazon was having to pay above market rates and pay relocation to get people from outside the area to work for them, since there wasn’t anyone available here. The Microsoft people tended to stay at Microsoft. The big thing Amazon brought to the table was astonishing employee turnover.
There is no special magic — salaries were higher than the standard of living, and it wasn’t San Francisco or the South Bay. You can’t replicate it in Cowpatty, Kansas, but in the mid-sized cities, many are ripe.
@James Lombardi:
So, I honestly didn’t follow the ins-and-outs of the deal enough to know whether it was a good one for the residents of NYC. Hell, we’re going part (now maybe all) of HQ2 a few miles up the road and I didn’t pay much attention to that deal, either. But it’s ludicrous to say that the “community [was] completely unrepresented” in the NYC case. We have a system of representative government, in which we elect officials to pay attention to these things and make decisions in our interest and then vote whether to keep said officials on a periodic basis. The Governor of New York, the Mayor of New York City, and others were heavily involved in the negotiations. Amazon didn’t foist a headquarters on cities, it held a national competition where cities bid to persuade Amazon to come. And, even after the fact, polling shows New Yorkers overwhelmingly in favor of HQ2.
@Kathy:
I’m not sure what it is that Uber should have done about this. The nature of their business is that ostensibly part-time drivers offer their services and the more drivers there are, the more competition there is on price. That sucks for drivers, of course, but is great for customers. People prefer Uber over traditional taxi services because it’s easier to get an Uber than a cab and it’s cheaper to boot. That’s a win for Uber and a win for consumers.
@James Joyner: James, this story lays out the issues with Amazon’s negotiations in New York and how they avoided community input.
https://wtop.com/national/2019/02/how-amazon-blew-its-chance-in-new-york/
@Mikey: This sentence gives up the goat.
Highly paid tech workers (and some not so highly paid non-tech workers, I presume) wouldn’t have “flooded” Queens. They would have moved there.
I will merely state two points to all of this.
1: I wonder if this will end the illusion that AOC is the future of the Democratic Party. It occurs to me I haven’t heard much talk in that neighborhood lately.
2 if youve gotta cut tax breaks amounting to many millions of dollars for somebody to come into your state or locality to do business, maybe your taxes and your spending and your regulations are too overbearing to begin with. For all the blame flying around, none of the Democrats involved seem to understand that point.
@Gustopher:
Microsoft had their corporate HQ in the Seattle suburbs since 1979, and lots of tech companies built their HQs there since 1990. It’s different than most large metropolitan areas in red states, where the largest HQs are in finance.
Besides that, there is the problem of anti-business policies of many Red States. There was the idiotic bathroom bill pushed in North Carolina, there was the incredibly idiotic bill to punish United Airline because of the NRA, there is the issue of education funding everytime that there are Republicans in government, with exceptions like Tennessee.
@James Joyner: It astounds me that taxis still don’t have an app similar to Lyft/Uber. If they vetted their drivers for basic competency and knowledge of the local streets and major facilities and provided a way to know that you had successfully contacted a driver and could see them on their way, they would be head and shoulders above Uber and Lyft.
Normally I’m pretty satisfied with Lyft drivers but I was just at a conference in Orlando and used it a half dozen times and it was chaotic. 3 or 4 times I watched the drivers get lost on the way to picking me up. One went exactly the wrong way and ended up going to my destination rather than my pickup point, probably because they were taking an Uber user there but had accepted my ride anyway. It’s only going to get worse. As drivers realize they are basically running $30K cars into the ground for $10 an hour, and invester money runs out causing the prices to jump 30-50%, the whole enterprise may collapse.
@James Joyner: One other potential pitfall for Uber: as it more and more relies on new drivers who are gullible enough to believe they can make a decent living it will find them staying as drivers for shorter and shorter amounts of times. Basically the Amway model. Which means that those drivers will be spending a higher proportion of their time in the angry/ready-to-quit zone. Not good for user experience.
@Eric Florack:
Dude, look up any list of tech hubs in the US. Can you show me that they tend to be Republican? California (San Jose/Silicon Valley, SF) and Washington state (Seattle) top the lists. Then come DC, Baltimore, Boston, Austin and Research Triangle in NC. The truth is there is a very clear correlation between high tech and liberal politics. Even as to Texas and NC you have the two blue dots in red states.
San Jose, San Francisco, Seattle, Austin, Boston, DC, Research Triangle – liberal cities with lots of universities. Tech follows education. Education creates Democrats. That’s why there’s a strong negative correlation between education and support for Trump. Smart people do tech, smart people are liberals.
@James Joyner:
Stop saturating the market. Stop running ads lying about what money is to be made driving for Uber.
This may have been true at first, but it no longer is. Unless you think that driving 10-12 hours a day is “part time.”
Their whole business model is flawed, in that they don’t employ drivers or own cars. This shifts much of the risk to the people doing the actual work of driving people around. and many of these people are in no position to assume such risk, and may not even know enough about the risk to begin with.
@James Pearce:
metaphor [met-uh-fawr, -fer] noun
1. a figure of speech in which a term or phrase is applied to something to which it is not literally applicable in order to suggest a resemblance, as in “A mighty fortress is our God.”
2. something used, or regarded as being used, to represent something else; emblem; symbol.
@Eric Florack:
As if Red States never offer tax credits or even tax subsidies, right? Ask Scott Walker.
Uber/Lyft are place-holders for driverless cars. They’re like the Pony Express, a cool idea that lasted all of 18 months before brave, daring men on horses were replaced by clerks in cubicles tapping keys.
I find it interesting that we are at nearly full employment and people are still pissed off over jobs. It hasn’t yet penetrated that this is what jobs, jobs, jobs looks like: bare survival pay, long hours, chaotic schedules. This is full employment when working people have been deprived of unions and when minimum wage has been kept below the level required to sustain life.
Millions of people are already in a wage competition against robots and no matter how low the human is willing to go, the robot will be cheaper in the long run. You want proof? Who prospered by having a low-pay workforce? China. And who is building the robots like crazy? China.
@MarkedMan:
In Mexico there’s an app called Easy Taxi, which is for hailing regular cabs. I’ve never used it. I also don’t know anyone who’s sued it, either. Most people who use such an app, have Uber only, even though there are two other competitors.
As for knowing the local streets and major facilities, don’t get me started. Last time I traveled to Monterrey, I had to go to the Macroplaza. That’s where much of the state government is located, smack in downtown Monterrey, and a very well-known place. the cabbie had no cue where it was(!) I tried to steer him using Google Maps, but he kept blowing me off. I wound up getting off and finding another cab.
@MarkedMan: the last time I looked at the numbers was probably a year ago, but Uber customers were paying something like 40% of the total cost of the ride. So if investor money ran out, the fares would jump 150%.
@MarkedMan:
There are apps in some countries for taxis. The problem as been pointed out is that Uber relies on subsidies and in a normal market these fares would have to be far more expensive. That’s why drivers are complaining about low pay.
I’m not the greatest fan of taxi drivers, but driving cabs is a pretty s* job. Driving in the city basically destroys the car, and normal people will normally demand cabs during the worst hours possible, like during the evenings in the weekends. That’s in part why taxi was always expensive.
@James Pearce: “Highly paid tech workers (and some not so highly paid non-tech workers, I presume) wouldn’t have “flooded” Queens. They would have moved there.”
And you know this how?
LIC is throwing up a lot of pretty high-rises, but the cool factor and night life are pretty low down. You’d probably see a lot of these people wanting to live in Chelsea or the Village. People with families might prefer UES, UWS or nicer parts of Brooklyn.
Unless, of course, you shared a tram ride with all the prospective employees and read their minds, in which case I will bow to your wisdom.
@Mikey:
No shit. Amazon would “flood” Queens with tech workers like the border gets “flooded” by Mexicans. Metaphorically.
@Michael Reynolds:
HAHAHAHAHAHAHA.
“Driverless cars” are going to pick your Amazon order, not chauffeur you around from production meeting to production meeting. A non-rich human is going to do that.
@Mikey: I could see where Council members may have been miffed by not being included but it’s hardly unusual for Mayor to negotiate deals on their own. And I can also see why Amazon would have preferred not to conduct negotiations in public.
@MarkedMan: I’ve never used Lyft and Ubered only a dozen times or so–usually to and from airports, hotels, or car repair facilities. But I’ve never had a problem with drivers getting lost because: GPS.
@Kathy: But Uber’s mission is to make itself a ubiquitous, convenient option. And it’s succeeded so much so that people who grew up in the Uber Era wonder why it is that anyone would bother to own a car.
@MarkedMan: NCAA men’s basketball rankings: Duke Blue Devils #2, UNC Tar Heels #8.
“Tobacco Road”
@wr:
Look at you schooling me on the ways of NYC. (Although I do concede there’s no reason why A-HQ2’s employees would have to live only in Queens.)
I just think it’s funny that NYC can accommodate millions of immigrants, but some middle class professional types come in and they’re all….”but mah Subway!”
@Michael Reynolds:
I know people like the notion of driverless taxis in the abstract, but think abut what is going to happen when semi-anonymous people are left alone in a traveling cubicle with no chaperone. “Your heavily vandalized, shit smeared ride that smells vaguely of vomit, semen and spilled takeout food has arrived.”
The technology isn’t going to be the problem, the people will be.
@Andre Kenji de Sousa:
Finance uses a fair bit of tech. So does biotech, manufacturing, petroleum extraction… Building a business app doesn’t have the same cool factor that working on AWS does, but it’s not like you’re completely stuck and have to either move or get a job working at Target (whose headquarters also employs a lot of tech workers, actually, but I meant in the store, stocking shelves…)
I’ve known a number of software engineers, married to people who finish their medical degrees, who end up moving to random locations because that’s where their partner can get a residency. They tend to stay. They might not have chosen Medium City, Square State initially, because of no flashy jobs, but if you add flashy jobs, you can get that initial draw. And if they are flashy jobs with high turnover, like Amazon, you end up with a growing pool of local talent that will attract other companies.
(It really is weird how many software engineers I’ve known married to doctors… Two jobs ago, it was a cliche. Some weird statistical bubble, probably)
Anyway, Seattle in the late 1980s through 2000 wasn’t some unique space waiting to become a tech hub.
This is what is broken in our society. If work doesn’t pay–and it doesn’t across many industries and many types of jobs–eventually a critical mass of people who don’t have enough and are told that they’re just too lazy to move to where they can get a good job (like being an Uber driver) and/or upgrade their skills will decide to redistribute the income on their own. And James is right–the market doesn’t give a fuck–and James’s endorses the idea that Uber shouldn’t either. This is broken folks. Joyner, at 50, and I, at 66 with so-so health, will probably not live to see the change, but we’ve been dancing on this tightrope since the Panthers and have stretched it tighter since Reagan. Hope that it doesn’t snap while the MAGAots are running things.
@Kathy:
Here’s the problem, Kathy; market economies and systems don’t care about market saturation in settings where there is no capital outlay. Uber doesn’t own cars or hire drivers specifically so that it can saturate markets. The founder realized that the big mistake that modern taxi companies make is owning equipment and hiring personnel–who have to be paid, after all, to run it. Profit at virtually zero overhead! And the customers don’t GAF about anything but the convenience and the lower cost. It’s the near perfect realization of people as units of production–and Uber doesn’t even care if they don’t produce, because they cost nothing to run.
@Gustopher: The people are ALWAYS the problem.
@James Joyner: ” And I can also see why Amazon would have preferred not to conduct negotiations in public.”
Well, sure. Everyone would rather make a deal where they don’t have to consult with all the annoying stakeholders. But sooner or later, that deal is going to have to be announced, and then all those annoying stakeholders are going to have their say — and now they’ll be coming into the whole thing suspicious about the reasons they were left out in the first place.
It’s so strange the way that pro-business people seem to feel that Amazon is the one and only party to be affected by all this.
@James Pearce: “Look at you schooling me on the ways of NYC.”
Yes. Actually knowing something about a subject is really helpful when discussing it. You should try that some day.
@wr: “knowing something about a subject”
I can list off the neighborhoods in my city too. I guess we’re both special.
(You’re wrong that NYC couldn’t accommodate Amazon’s workforce. They just don’t want to. There’s a difference there.)
@James Pearce:
Yeah, except the metaphor actually applies to what would have happened in Queens.
@James Pearce: As someone who lives in the other (now only) HQ2 locality, I don’t doubt we can “accommodate Amazon’s workforce.” I mean, there’s space for them in the buildings.
What a lot of us don’t want to have to accommodate is another several thousand cars an hour coming up I-395 and I-66 and the Beltway during rush hour. We don’t want to have to accommodate a major upward pressure on already-insane housing costs. We don’t want to have to accommodate tens of thousands more kids in school systems that are already bursting at the seams.
Maybe the Amazon boosters are right and the effect will be gradual and it won’t be all that bad, but I’ve seen what’s happened here the last 15 years even without HQ2, so I’m not optimistic. Hopeful, sure. But not optimistic.
@Gustopher:
The people usually are.
@Mikey:
I wish I could be more sympathetic to these complaints, but these are issues policy-makers need to unravel, not Amazon.
We’re finally falling out of love with the car so maybe that will help the twice daily traffic jams that sees thousands of individual drivers idling on the interstates. I’m sure the “already-insane housing costs” are mostly regulatory in origin. Are you prepared to accept some deregulation if it meant affordable housing in your area? Here’s a solution for your schools problem: Legalize marijauana and tax it. It’s no panacea, but it does help. (I think the District legalized it, but didn’t commercialize it. That’s…weird.)
The point is these problems are manageable. They can be addressed by right-thinking people in the right positions.
If the real problem is that the “wrong” type of people are moving in and you’re too inflexible to accommodate them, well that problem isn’t so fixable.
I read an entire book on Amazon called The Everything Store, but I don’t remember too much about why they have super high turnover. Does anybody know of some good long-form pieces that can flesh out the reasons for that for me?
@Gustopher:
But these are not the type of people that companies like Facebook or Amazon want to hire. They want the best engineers, people highly specialized in their fields. That’s why they want to hire foreigners even if someone has a uncle that is coder and that is unemployed.
Two or three engineers leaving Google can create a lot of disruption and problems.
@James Pearce:
They are. I’ve pointed out recently that even in ridiculously small cities in Brazil five story buildings are common places, in large American Metropolitan areas they are a point of contention.
Article in The Atlantic about the whole Amazon thing.
@James Pearce: I like my current car: a 2002 Toyota Camry. This car has over 200, 000 miles and has only been in the shop for routine service, and normal parts replacements. They will have to pry my hands off the steering wheel to get me out of that thing. Actually the newer suv’s get better gas mileage.
My favorite car was a 1964 Chevy Impala SS: 327 cu. in. engine, 2 – 4 barrell Holley carb, 4 speed Borg-Warner transmission. That thing would burn some rubber. We still love our cars.
@Andre Kenji de Sousa: You got a new follower, dude.
@Tyrell:
Definitely, and there will always be a role for them. They’re just too useful, and, as you well know, they can be quite aesthetically pleasing.
But I keep thinking back to my travels the last two years. I rented a car in San Francisco. What a pain in the ass. In DC and Chicago I didn’t need to. I rented a car in Memphis, which was useful. New Orleans…have you ever driven through the French Quarter? I haven’t but I have driven through the Mile High Flea Market.
I expect the experiences are similar.
@Andre Kenji de Sousa:
This is not remotely true for New York. Developers do build big buildings. They are simply not affordable. Single-family zoning is a huge problem, but what drives a housing crisis isn’t regulation–it’s the fact the market has little interest in affordable housing. And why would it? It’s in the business of profits, not in providing housing. To provide actual affordable housing, the government needs to subsidize building.
@Modulo Myself:
More or less. The real issue of these large metropolitan areas of more than 10 million people is transportation. If you allow people to easily go from another to another area people can choose to live in the suburbs – that’s why Paris, Tokyo and the German cities are less bad on living costs than London or New York.
And the fact that you don’t see five story buildings in most of the cities in the Untied States is an issue.
But the problem is not Amazon, is something that should be done outside of Amazon. You can argue about tax incentives, but Amazon per se is not the problem with the subway or with housing. And it’s easy for politicians to argue about Amazon instead of working to improve the subway or housing. Whether with better zoning, public housing, public transportation, etc.
Queen Bee socialist AOC is down 25,000 jobs in, what, a month? Move aside, Maduro. This is a real pro.
@Andre Kenji de Sousa: It’s the age-old problem of who’s in charge of paying for the infrastructure and one of the reasons that Detroit has had so many problems due to its population collapse. When cities grow, the new areas are usually the ring around the outside. Cities like Detroit lost population, but they lost population all over the area, so they had to continue providing the same infrastructure but via a much smaller taxation base. It was mad cow disease on steroids.
@James Pearce: “You’re wrong that NYC couldn’t accommodate Amazon’s workforce”
Well, I certainly would have been wrong if I had said anything like that. Of course I didn’t. I merely responded to your claim that all of Amazon’s new hires would live in Long Island City by pointing out that a lot of them probably wouldn’t want to.
@James Pearce: “I wish I could be more sympathetic to these complaints, but these are issues policy-makers need to unravel, not Amazon.”
Yes, and one major way to unravel these problems is to have the company that’s causing them pay to address them.
When did we as a society decide that a company wanting to make a major development in an area would not have to be responsible for any of the inevitable consequences? In the olden days — like maybe a decade ago — if a company was going to put up a huge new business center that would greatly impact traffic, they might, for instance, pay for new freeway onramps and offramps to help offset the greater traffic burden. Now for some reason a company can do whatever it wants wherever it wants and the people of the community have to pay to adjust to them.
@Guarneri: Oh, look. Another right-winger terrified of a young brown woman. What a shock.
@James Pearce: “If the real problem is that the “wrong” type of people are moving in and you’re too inflexible to accommodate them, well that problem isn’t so fixable.”
If you ever go to a party and find yourself getting punched in the face, it’s probably because you engaged in a discussion of civic development and decided to accuse the person you were talking to of being a racist based on absolutely nothing.
@Andre Kenji de Sousa: “They are. I’ve pointed out recently that even in ridiculously small cities in Brazil five story buildings are common places, in large American Metropolitan areas they are a point of contention.”
Which is not the case in New York City. Or, even more specifically, in Long Island City, where the waterfront grows another 30-story condo tower roughly every week.
@Andre Kenji de Sousa: “The real issue of these large metropolitan areas of more than 10 million people is transportation. If you allow people to easily go from another to another area people can choose to live in the suburbs ”
Sure — but so what? The basic decisions about NYC transportation system were made by Robert Moses, a man of many talents whose loathing for poor people and minorities led him to make transportation to Long Island almost impossible without a car, to refuse to extend subway services to the Bronx, and who paved over a right of way deliberately purchased to allow an eventual train to the airport because he didn’t want to make it easier for poor people to get around.
But Moses has been dead for decades and we’ve got the system he created, some of which is brilliant and some of which is terrible.
As I’m sure you understand, there isn’t a huge pool of money available to start building new subway lines.
So why, in your mind, is it unreasonable to say to a trillion-dollar company “if you want to drop a giant development into the middle of the city, you need to pony up to improve transportation to and from it”?
Why shouldn’t an Amazon be required to pay for the externalities it’s creating?
Andre Kenji de Sousa:
People were arguing about Amazon because they were shaking cities down in a staged contest for the privilege of their HQ2 or whatever. It was emblematic of so many wrong things, and Cuomo and de Blasio played along with it all for the dubious jobs which Amazon promised. Funny that AOC can tend bar for two years and learn more about how money works than a bunch of dipshit economists who believe the free market built America, so it’s all a matter of zoning. Not Robert Moses or the New Deal or big government, just zoning.
@James Pearce: I lived in New Orleans five years. No sane person drives through the French Quarter; they just circle around looking for a parking space.