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Two days ago, I wrote about Amazon's sham HQ2 competition and what the cost to taxpayers could be. Yesterday, Amazon confirmed that Long Island City (LIC) and National Landing (which is the name for the already-rebranded Crystal City area) will be home to HQ2a and HQ2b.
Now that it's official, we are starting getting a look at the specifics of the two deals. Down in the Commonwealth of Virginia, state and local officials have committed more than a billion dollars in tax incentives, infrastructure upgrades and other investments. In New York, the taxpayer price tag is even bigger: more than $1.7 billion.
Something tells me this statement by New York Governor Andrew Cuomo at today's press conference might not age well:
Fun fact: each site will include a helipad. I guess Amazon execs will not be availing themselves of all the great transportation options they touted in their announcement.
Amazon is committed to adding 50,000 combined jobs (new ones, not relocated positions) with an average wage of over $150,000 within 10 years. And potentially up to 80,000 jobs within 15 years. That's obviously nothing to sneeze at.
To state the obvious, jobs are a very good thing. No one is against adding jobs, but despite the Governor's math, there is a cost attached to job creation. Short-term and long-term, to existing residents and future ones, to infrastructure, housing prices and small businesses. And that is what has people concerned.
Queens officials, where LIC is located, are not celebrating:
[New York] City Council member Jimmy Van Bramer and State Senator Michael Gianaris have both come out against Amazon, saying “offering massive corporate welfare from scarce public resources to one of the wealthiest corporations in the world at a time of great need in our state is just wrong.”
These and other local officials are quick to clarify that they are not against the company's presence (the Council members above lobbied Amazon to choose NYC), but rather the lack of transparency and inclusion in the process, plus the obvious taxpayer giveaways.
It will be hard to convince those stuck on the 7 train trying to get in and out of LIC -- or those trying to afford rent in the already gentrifying neighborhood -- that the billions to Amazon wouldn't be better spent on fixing the subway or building more affordable housing.
As we've seen in Seattle, where the city declared a state of emergency over homelessness, Amazon's presence isn't going to make these neighborhoods more affordable.
Grant Long, a senior economist at StreetEasy, told Curbed:
With the sales market slowing elsewhere in the city, investors are moving quickly to place bets on Amazon reshaping western Queens. Anyone who might have already been considering a move to Long Island City is no doubt under more pressure to get in now, ahead of the rise in prices likely to come with the sharp rise in interest from those looking to make a quick buck. The developers who have been building in the area over the course of the past 15 years are likely to reap the biggest windfalls from the Amazon announcement, following a long period of doubts about the city’s ability to absorb the large number of homes that have come onto the market since the area’s redevelopment began in the early 2000s.
The same is already happening in Northern Virginia, where, like here in NYC, renters and low-income residents of the neighborhoods will be hit hardest. As reported by the Washington Post:
A Crystal City condo that had sat on the market suddenly shot up in price by $20,000. Realtors are fielding cold calls from out-of-state investors eager to snap up properties. “But only if Amazon comes to the area,” one Midwestern woman said.
So, we are off and running. The race to reshape these communities is on.
Amazon has agreed to invest in job training programs and internships for local residents, including folks in NYC's Queensbridge Houses -- the largest public housing complex in the Western Hemisphere. That's an important commitment -- Amazon will invest $5 million in this effort, $10 million will come from the city and state -- and one that I hope is successful in lifting families out of poverty.
Only time will tell, but we've all seen this movie before.
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