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Amazon Is Getting $1.5 Billion to Come to Queens. Now Begins the Fight Over if It’s Worth It. Amazon Is Getting at Least $1.7 Billion to Come to Queens. Now Comes the Fight Over Whether It’s Worth It.
(about 7 hours later)
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Gov. Andrew M. Cuomo and Mayor Bill de Blasio sat together Tuesday to announce that they had emerged victorious from a nationwide competition to lure tens of thousands of Amazon jobs to New York. To attract Amazon, New York’s leaders agreed to remake plans for the Queens waterfront, move a distribution center for school lunches and provide a sweeping package of $1.7 billion in incentives from the state and hundreds of millions more from the city.
The two leaders were all smiles as they congratulated the top executive from Amazon who had joined them, John Schoettler, a vice president for real estate, and together parried questions about the package of subsidies that Mr. Cuomo said were the largest the state had ever offered. They even agreed to allow a helipad for Jeff Bezos, Amazon’s chief executive.
The eventual total could far exceed $2 billion. Under the plan, within 15 years the company could occupy as much as eight million square feet of office space, the rough equivalent of three Empire State Buildings.
“Either you are creating jobs or you are losing jobs,” said Mr. Cuomo. “This is a competition.” An image of what life will be like with the arrival of Amazon became clearer on Tuesday, even if many questions remain unanswered.
Added Mr. de Blasio, “We had an unprecedented opportunity to add to the number of jobs.” The company has agreed to follow city guidelines for the design of its outpost in Long Island City. But gone is the city’s vision of a mixed-use community filled with apartments, some of them for residents of more modest means. In its place will rise office buildings that will house 25,000 or more workers. The kayakers bobbing on the East River will now be joined by helicopters overhead.
Under the agreement, first announced by Amazon in a blog post, the company would receive performance-based direct incentives of $1.525 billion based on the company creating 25,000 jobs in Long Island City, most of which come from a state tax credit. “Amazon will receive these incentives over the next decade based on the incremental jobs it creates each year,” the company wrote. In some quarters of Queens, opposition was quickly building.
The state also offered a capital grant to the company that could total as much as $500 million that Amazon can use to build new offices. “Ask not what we can do for Amazon. Ask what Amazon can do for us,” said State Senator Michael Gianaris, a Democrat who represents the neighborhood.
It will also apply for additional incentives through existing city programs available to any company, Amazon said. Tax experts said those programs, for hiring workers in boroughs outside Manhattan and for commercial development, could amount to hundreds of millions of dollars. But Gov. Andrew M. Cuomo and Mayor Bill de Blasio seemed relieved to be able to finally discuss the long-secret negotiation and appeared jovial on Tuesday as they spoke about the economic benefits.
For its part, the company said it would "donate space on its campus for a tech start-up incubator and for use by artists and industrial businesses” and for a new school, as well as make investments in infrastructure and green space. It also agreed to spend $5 million on training and internship programs and to participate in “job fairs and resume workshops” at the nearby Queensbridge Houses, the largest public housing development in the country. Yes, it is among the state’s largest-ever incentive packages, the governor said, but the return on investment would be 9 to 1.
The ability of the governor and mayor to work together was a key factor in persuading Amazon to locate its offices in Long Island City, Queens, one of two locations that also includes the Washington suburb of Crystal City, Va. Yes, they were circumventing the usual land-use process and essentially eliminating any veto power by the City Council. But, Mr. de Blasio said, the project was so large, Amazon “needed a certain amount of certainty.”
“We’re both pragmatists,” Mr. de Blasio explained, saying he and the governor spoke several times during the yearlong negotiation. The two Democrats, who have clashed on everything from the subway to how to handle a wayward deer, were all smiles as they shook hands. They congratulated the top executive from Amazon who had joined them, John Schoettler, a vice president for real estate. Together, they parried the many questions about the subsidies.
But as the details emerge, many expressed anger that the costs — in crowded subways, rising home prices, strained sewers and actual state and city tax dollars — could far outweigh the benefits of possibly 25,000 new workers making an average of $100,000. “Welcome to New York,” Mr. de Blasio said after the first skeptical question from a reporter to the Amazon representative.
“We’ve been getting calls and outreach from Queens residents all day about this,” Congresswoman-elect Alexandria Ocasio-Cortez, who will represent a neighboring Queens community, wrote on Twitter. “The community’s response? Outrage.” “The New York City press corps: You can either do this, or you can go to the dentist,” the governor added.
Local politicians were promising protests. The location of the new headquarters is now certain — around what is known as Anable Basin.
Others, including local business and technology groups and former Mayor Michael R. Bloomberg, praised the deal. Amazon will take about one million square feet in the 50-story Citicorp building, long the only tower on the Long Island City skyline. City officials differed as to whether the company would decide to replace the large Citi sign atop the tower — visible from Manhattan — with a commanding Amazon logo.
“Amazon’s decision to locate to Long Island City is an affirmation not only of N.Y.C.’s growing tech talent,” Mr. Bloomberg wrote on Twitter, “but also of all the investments — in housing, schools, parks, transportation, and culture” made in Long Island City. James Patchett, the head of the city’s Economic Development Corporation, said in a telephone interview that Amazon is not interested in a sign.
Indeed, as part of one tour of New York City this year, Amazon executives were taken around the Cornell Tech campus on Roosevelt Island — an innovation incubator and a legacy of Mr. Bloomberg’s tenure — and back to Long Island City using a new ferry system created by Mr. de Blasio. “They have signage on their Seattle building,” the deputy mayor for economic development, Alicia Glen, interjected during the same call. She added, of the Anable Basin location, “I’m guessing they’re going to call it Amazon Basin.”
But for Amazon executives, who may have anticipated some local and vocal resistance, the bigger question appeared to be whether Mr. Cuomo and Mr. de Blasio could get along. Whatever signs or nicknames are given to the site, some Queens residents and many elected officials expressed anger that the costs — in crowded subways, rising home prices, strained sewers and actual state and city tax dollars — could far outweigh the benefits of at least 25,000 new workers, making an average of what the company said would be $150,000.
The acrimony and mistrust between the two top New York Democrats is so well-known that before Amazon made its final push, top executives met with both leaders separately, according to a person with direct knowledge of the gatherings, to see if they were on the same page. Local politicians were promising protests, objecting to the incentive package that could far exceed $2 billion, including existing city tax breaks.
The Amazon officials came away from the meetings, which did not involve the chief executive, Jeff Bezos, convinced that Mr. Cuomo and Mr. de Blasio could work together on the project, the person said, something they have struggled to do on everything from public housing to mass transit to the eventual fate of a wayward deer. Others, however, including local business and technology groups and former Mayor Michael R. Bloomberg, praised the deal.
After the meetings, documents began flying back and forth between Amazon and New York officials, the person said. “Amazon’s decision to locate to Long Island City is an affirmation not only of N.Y.C.’s growing tech talent,” Mr. Bloomberg wrote on Twitter, “but also of all the investments — in housing, schools, parks, transportation and culture” made in Long Island City.
The 32-page memorandum of understanding, unveiled Tuesday, was a three-way agreement between the city, the state and the Seattle-based company, and provides the outline of a process that would take place over the next few months, according to a person with direct knowledge of the negotiations. Amazon said in a statement that, as part of the deal, it would donate space on its campus for a tech start-up incubator, artists, industrial businesses and a new school. It also said it would make investments in infrastructure and green space.
Amazon will create a corporate headquarters along the East River using parcels that combine private and public land around what is known as the Anable Basin, according to the document. The company promised to spend at least $2.5 billion on the new offices, which would encompass 4 million square feet with an option to double in size. The company also offered another sweetener: $5 million for training and internship programs and a promise to participate in “job fairs and résumé workshops” at the nearby Queensbridge Houses, the country’s largest public housing development.
But Amazon also will have significant space available much sooner as part of the deal because it will lease up to 1 million square feet of space in the Citigroup Tower — more than half its 50 floors — which for years was the first major office building in Long Island City, according to the owner of the building. The ability of the governor and the mayor to work together was a key factor in persuading Amazon to split its new office space between Long Island City and the Washington suburb of Crystal City, Va.
Two people briefed on the discussions marveled at the level of cooperation between the teams from Albany and New York City as they dealt with Amazon and at the relative secrecy in which the discussions were kept for about a year. “We’re both pragmatists,” Mr. de Blasio explained, adding that he and the governor spoke several times during the yearlong negotiation.
According to the decade-long plan, about 3,000 employees may be hired in New York in the first two years, ramping up to more than 25,000 by 2028. The governor went on to praise the mayor’s new ferry system.
But the agreement, reached behind closed doors and so far without local input, has angered officials. Part of the reason is that, according to the broad contours of the plan, the state and the city will bypass the veto of the City Council, which has the power to block rezonings and land-use measures. They will instead employ a state-level process previously used for large-scale development projects such as Atlantic Yards in Brooklyn. [Read more about why Amazon wanted to make sure the mayor and the governor could get along.]
The price tag in city and state tax breaks appeared to exceed those other projects. “It has the potential to be a deeper subsidy for Amazon as a percentage of the total project cost than at either Hudson Yards or Atlantic Yard,” said George Sweeting, the deputy director of the city’s nonpartisan Independent Budget Office. Hudson Yards is a major development on the Far West Side of Manhattan. Indeed, as part of one tour of New York City this year, Amazon executives were taken around the Cornell Tech campus on Roosevelt Island — an innovation incubator and a legacy of Mr. Bloomberg’s tenure — and then to Long Island City, using the city’s ferry system.
Opposition appeared to be organizing locally, even if the process being followed by the state and city left critics with few options to alter or derail the deal. At the moment, the site is little more than a series of low-slung buildings: a furniture warehouse, an armored car company, artist studios and a casual waterfront food spot, Anable Basin Sailing Bar and Grill. Some belong to the city; others belong to a private company, Plaxall.
“We’re going to mobilize and protest and claim that democracy is still alive in Queens and in New York City and New York State,” said Jimmy Van Bramer, the councilman whose district includes Long Island City. “It’s unacceptable and we’re going to fight.” “They should be allowed to build but they have to take into consideration the whole neighborhood,” said Veselko Buntic, who owns the grill and rents from Plaxall. “I don’t want to see somebody big come in and destroy the community feeling we have here.”
Their ability to block the measure is uncertain, Mr. Van Bramer acknowledged. But, he added, “we’re not giving up.” Richie Wissak, an owner of 55 Stan, a yellow cab company reminiscent of the 1970s television show “Taxi,” said he welcomed the arrival of Amazon. Next to the cab company was a shuttered strip club that Mr. Wissak said had been operating for 80 years and had only closed down six months ago.
Mr. Van Bramer and State Senator Michael Gianaris, another vocal Democratic critic of the deal to bring Amazon to Queens, were not always against the idea. In October 2017, they signed on to a letter, along with the Queens borough president and other elected leaders, imploring the company to come to Long Island City. “The community’s not going to dig it too much, but I think it’s going to be great for this area,” Mr. Wissak said of Amazon’s arrival.
Asked about the letter Monday, Mr. Van Bramer and Mr. Gianaris said they objected to steep subsidies for the company. Still, the agreement, reached behind closed doors and so far without local input, has angered officials.
Part of the reason is that, according to the broad contours of the plan, the state and the city will bypass the City Council, which has the power to block rezoning and land-use measures. They will instead employ a state-level process previously used for large-scale development projects, such as Atlantic Yards in Brooklyn and Hudson Yards on the Far West Side of Manhattan.
The price tag in city and state tax breaks appeared to exceed those of other projects. “It has the potential to be a deeper subsidy for Amazon as a percentage of the total project cost than at either Hudson Yards or Atlantic Yards,” said George Sweeting, the deputy director of the city’s nonpartisan Independent Budget Office.
The process being followed by the state and city left critics with few options to alter or derail the deal. But some have vowed to fight.
“We’re going to mobilize and protest and claim that democracy is still alive in Queens and in New York City and New York State,” said Jimmy Van Bramer, the councilman whose district includes Long Island City. “It’s unacceptable and we’re going to fight.” Opponents were planning to hold a demonstration on Wednesday in Long Island City.
Mr. Van Bramer and Mr. Gianaris were not always against the idea. In October 2017, they signed on to a letter, along with the Queens borough president and other elected leaders, imploring the company to come to Long Island City.
Asked about the letter on Monday, Mr. Van Bramer and Mr. Gianaris said they object to the steep subsidies offered the company.
“I welcome the jobs if it means Amazon investment in L.I.C. infrastructure, without us having to pay a ransom for them to be here,” Mr. Gianaris said.“I welcome the jobs if it means Amazon investment in L.I.C. infrastructure, without us having to pay a ransom for them to be here,” Mr. Gianaris said.
Mr. Cuomo insisted that it was a sound business deal.
“You have to spend money to make money,’’ he said in a telephone interview. “You’re betting on a winner.”