Amazon pulls out of plans to build headquarters in New York City

[Shawn Knight]

Why it matters: Setting up shop in a region where you aren't welcomed is a lose-lose situation. Amazon was wise to pull out now and regroup rather than fighting politicians and residents that didn't want them around. The e-commerce giant can always select another host city if it is deemed necessary in the future.

Amazon on Thursday announced it has decided not to move forward with plans to build one-half of its second headquarters in New York City as originally planned.

Rumors surfaced last week suggesting Amazon was considering pulling out of the deal following unexpected pushback.

Amazon said that while polls showed that 70 percent of New Yorkers supported their plan and investment, several state and local politicians made it clear that they opposed their presence and would not work with them to build the type of relationship required to move forward with the project.

Interestingly enough, Amazon said it does not plan to reopen its search for another host city at this time. Instead, the e-commerce giant will move forward with existing plans in Virginia and Nashville and continue to hire across its 17 tech hubs and corporate offices in the US and Canada.

Amazon’s HQ2 was expected to bring 25,000 jobs and more than $27 billion in tax revenue to NYC over the next 25 years. Critics were concerned about the tax incentive being offered to Amazon and the possibility of rent hikes and increased traffic.

Second image via New York Post

Permalink to story.

https://www.techspot.com/news/78760-amazon-pulls-out-plans-build-headquarters-new-york.html

 

[p51d007]

Apparently Amazon wasn't padding the politicians & union officials enough to get their blessing.
New York's loss is Amazon's gain. They will set up somewhere in a more business FRIENDLY state!

 

[Kibaruk]

Apparently New York state doesn't need more jobs, kudos to the mayor and their political reps!

 

[Uncle Al]

The deal at NYC was a terrible sham ...... all these city mayors meet several times a year, what a shame they can't all agree they won't give Amazon a dime and make them spend their own money to grow!

 

[Evernessince]

Apparently Amazon wasn't padding the politicians & union officials enough to get their blessing.
New York's loss is Amazon's gain. They will set up somewhere in a more business FRIENDLY state!

Common misconception that Amazon can setup anywhere. New York City is the financial capital of the world and has a workforce with the skills to support a HQ.

Amazon isn't going to build an HQ in the middle of some rinky dink alabama town that doesn't have the infrastructure or skills to support it.

In reality, Amazon likely had one or two places optimal for it to setup. The whole bidding process was just to get free money from places they actually wanted to setup in.

Not that you need to take my word for it, go and look at where various tech comapny's headquarters are placed. It's not surprising to see that each is placed where there is a workforce that will support it, regardless of the cost to build in that area.

 

[cliffordcooley]

Amazon isn't going to build an HQ in the middle of some rinky dink alabama town that doesn't have the infrastructure or skills to support it.

I don't have a problem with the rest of your comment. But I'm calling bullshit to this part. Infrastructure yes I can see that. Skills nah, I don't see any state not having the skill set. Especially when considering companies have a tendency to move people where needed. And skill comes with experience. No one is beyond gaining the experience needed.

To be honest I believe every state all ready has experience. Amazon is basically just a huge shipping and receiving company. That is nothing new to even small businesses. It doesn't take much to upscale from there.

 

[Evernessince]

I don't have a problem with the rest of your comment. But I'm calling bullshit to this part. Infrastructure yes I can see that. Skills nah, I don't see any state not having the skill set. Especially when considering companies have a tendency to move people where needed. And skill comes with experience. No one is beyond gaining the experience needed.

To be honest I believe every state all ready has experience. Amazon is basically just a huge shipping and receiving company. That is nothing new to even small businesses. It doesn't take much to upscale from there.

Do I need to point out silicon valley and New York city's penchant for semiconductor / software and financial services respectively?

Certain cities support select types of businesses because the skills and infrastructure already exist there.

You won't find that in alabama and the cost to relocate employees and build facilities is very expensive and it's exactly why you don't see it often.

You are also forgetting people's lifestyle affects the businesses around them. Software engineers have the money for fine dining, higher quality housing, and the many other luxuries associated with additional expendable income. A small town in alabama of which will likely have KFC, Walmart, and low quality housing. Not at all appealing to the kind of lifestyle a business in that area would support.

So perhaps instead of simplifying a situation with a bitty quip, you look at the intricacies of a business selecting locations. It is not as nearly as simple to just relocate people as you seem to think.

 

[cliffordcooley]

So perhaps instead of simplifying a situation with a bitty quip, you look at the intricacies of a business selecting locations. It is not as nearly as simple to just relocate people as you seem to think.

No thank you I will however accept your presentation as a segregation promotion. Might as well move the business to China. They can do the labor as well and don't require all the fancy dining. You seriously don't have faith in peoples ability to adapt. You are falling under well that is just the way things are. Well I object to the way things are! I think everyone can have a better living not just the one percent-ers that the image above is objecting to. Trust me I see both sides and the problem are the guys not spreading wealth. It is a sickness, I'm beginning to think has no cure. People are not given a chance, and you are advocating why.

 

[p51d007]

Common misconception that Amazon can setup anywhere. New York City is the financial capital of the world and has a workforce with the skills to support a HQ.

So? They don't need to be "in" NYC...even if it is the so called financial capital of the world. We have this thing called the internet, video conferencing etc.
Plus, just look what happened to Seattle, once Amazon, Starbucks & others set up shop?

 

[cliffordcooley]

Plus, just look what happened to Seattle, once Amazon, Starbucks & others set up shop?

Thank you. These companies have the power to create skill in any location.

 

[richalone442]

I just think it's funny to see NYC lose 25.000 more jobs, these people are just stupid ignorant puppets of the Socialist Party. As Socialist controlled states lose business and population as so does their power erode.
Amazon can go anywhere it wants, there are 49 other states that will welcome 25,000 jobs to boost their economies and the quality of life of those within.
Just more proof that Communism doesn't work.

 

[psycros]

Not sure where that one billion estimation of annual CITY tax revenue came from...there is no data to support it. We know that Amazon hasn't paid any federal taxes in ages and they also pay less state taxes than companies a hundred times smaller, just like most other major corporations. The idea that they would be shelling out a BILLION bucks to the Rotten Apple every year is laughable. I'm also not sure why New Yorkers are concerned that Amazon's presence would actually make living there more expensive..the city is already home to HQs and major branches of many huge companies. One more won't make much of a difference.

 

[ckm88]

Does Amazon even pay taxes? lol

 

[wiyosaya]

It is not that easy to find the real reasons that the deal fell apart. So based on the unequivocally available information, let's all start yelling "Yeah, this is all about libtards and demoturds" when the truth is that not one of us knows the real reasons, and as such, everyone's comments are speculative at best.

Anyone recall the Foxconnjob in WS?

I'd rather see a deal fall apart than a corporate entity that cares only about its obese corporate butt secure a deal to further enhance the already obese size of its corporate butt through some sort of corporate welfare grant by politicians pretending that they are actually doing something.

Let's not forget that crApazon could care less about its employees. Let's not forget that crApazon's employees at many locations think that working there is not much better, comparatively, than working in slave-ish conditions at Foxconnjob in China.

Yes, let's continue f'ing the workers while obese corporations and their execs continue to wallow in the billions of dollars they have in the bank.

And sure, let's give these corporations even more corporate welfare SNAP so that the size of their collective corporate butts can continue to increase at the expense of the taxpayer.

I live in a city where democrats made such a welfare deal. Guess what? It failed and the only ones that made out were the corporate heads purely at taxpayer expense.

 

[Kibaruk]

Common misconception that Amazon can setup anywhere. New York City is the financial capital of the world and has a workforce with the skills to support a HQ.

They have the strength to set up shop wherever they want.

 

[fluffydestroyer]

Amazon wont pay for their taxes out of the11 billion profit they made in 2017-2018 because of a tax break. What the hell makes you think they would pay taxes for the 27 billion this time ? some people are gullible

 

[MilwaukeeMike]

It is not that easy to find the real reasons that the deal fell apart. So based on the unequivocally available information, let's all start yelling "Yeah, this is all about libtards and demoturds" when the truth is that not one of us knows the real reasons, and as such, everyone's comments are speculative at best.

Anyone recall the Foxconnjob in WS?

I'd rather see a deal fall apart than a corporate entity that cares only about its obese corporate butt secure a deal to further enhance the already obese size of its corporate butt through some sort of corporate welfare grant by politicians pretending that they are actually doing something..

We know exactly why the deal fell apart. We have the politicians who killed the deal explaining why they did it. I heard them speaking on the radio today. I believe it was Senator Michael Gianaris from Queens who said that there was no consideration to the impact to the infrastructure of NY. It would increase their housing problems, and there wouldn't be enough schools nearby. He specifically used the phrase 'now they can take their ball and go home' (watch the news, you'll probably see it) Alexandria Ocasio-Cortez specifically said that they could spend the $3 billion dollars in another place - hiring more teachers perhaps.

You're right though, we don't know the REAL reasons because I want to give the benefit of the doubt that politicians can't possibly be this stupid. NYC would stood to gain $27 BILLION in tax revenue and 40k jobs. That'll cover the costs of new schools and anything else they might need.

Ocasio-Cortez saying they have $3 billion to invest elsewhere is completely wrong. That $3 billion was because NYC was going to allow Amazon to pay $27 Bln in taxes instead of $30 Bln in taxes (projected over 10 years). NYC was never going to write a check!!! She is either wildly confused, or is counting on the ignorance of her base to also not understand how this works.

And yes, I live in Wisconsin - we're excited for Foxconn. We know that a 'tax credit' doesn't mean writing a check, it means you'll get a little less than you otherwise would. We know that $27 Bln and 40k jobs are better than NO money and NO jobs.
FYI, if the news ever talks about money the same way Ocasio-Cortez seems to think it works, they'll use the word 'cash' They'll say it was a 'cash' deal. There's no money out of your pocket when there's a tax credit.

Do you watch Game Of Thrones? Convincing yourself of your superior morals makes you feel good, but it doesn't help the people you're supposed to be helping.

 

[MilwaukeeMike]

Yes, let's continue f'ing the workers while obese corporations and their execs continue to wallow in the billions of dollars they have in the bank.

And sure, let's give these corporations even more corporate welfare SNAP so that the size of their collective corporate butts can continue to increase at the expense of the taxpayer.

Imagine you were just hired by Amazon... you made it through their interviews and beat out a bunch of other candidates. Now you come to work everyday in a brand new HQ, which is awesome because the company you work for is stupidly rich. You eat in a brand new cafeteria, and you workout for free in a state of the art gym. You sit in your ergonomic chair at your desk on a brand new computer with 2 huge monitors. You have work/life balance, great benefits and you're making over 100k a year.

This is not hypothetical at all.. this is what a job in one of these huge corporate headquarters is like. I know... I've seen it. And now thousands of people in NY won't get a job like that, and that sucks.

And to say it's 'worth it' because some corporate entity won't get a bigger butt seems quite petty.

There are a LOT of losers from this deal falling through, and Amazon is hardly the biggest.

 

[QuantumPhysics]

Forget the "anti union angle" because that's all Republican talking points BS.

#1 NYC is already a nightmare for traffic and Amazon would only make it worse.

First of all: all of Long Island has to pass through NY just to get through to Manhattan or to Staten Island or New Jersey. What we need are BRIDGES from Port Jefferson or eastern-most Long Island to the Connecticut mainland so we can reduce the traffic burden through the few bridges we have to the west. It's way too inneficient.

#2 The deal was to basically let them bring jobs AT THE EXPENSE of paying taxes. No thanks.

So Bezos himself walks away paying no taxes, but the people who earn money have to pay income taxes and then see most of their money "taxed" by high costs of living.

Do you think that rental space in the area is going to DECREASE?

Of course not: the cost of living in the area is already high - and this would make it even worse.


Take your Amazon jobs to an underdeveloped city that actually needs them.

Go to Flint Michigan and replace their water pipes.

 

[Evernessince]

So? They don't need to be "in" NYC...even if it is the so called financial capital of the world. We have this thing called the internet, video conferencing etc.
Plus, just look what happened to Seattle, once Amazon, Starbucks & others set up shop?

Well for one, Seattle already had the infrastructure and supporting businesses to attract those companies. All this does is further elevate my point that there are only a select few locations these companies can setup in.

 

[Evernessince]

Does Amazon even pay taxes? lol

Amazon payed 0 in federal taxes in 2017 and 2018. In fact they received $129 million back from the government in 2018

http://fortune.com/2019/02/14/amazon-doesnt-pay-federal-taxes-2019/

We know exactly why the deal fell apart. We have the politicians who killed the deal explaining why they did it. I heard them speaking on the radio today. I believe it was Senator Michael Gianaris from Queens who said that there was no consideration to the impact to the infrastructure of NY. It would increase their housing problems, and there wouldn't be enough schools nearby. He specifically used the phrase 'now they can take their ball and go home' (watch the news, you'll probably see it) Alexandria Ocasio-Cortez specifically said that they could spend the $3 billion dollars in another place - hiring more teachers perhaps.

You're right though, we don't know the REAL reasons because I want to give the benefit of the doubt that politicians can't possibly be this stupid. NYC would stood to gain $27 BILLION in tax revenue and 40k jobs. That'll cover the costs of new schools and anything else they might need.

Ocasio-Cortez saying they have $3 billion to invest elsewhere is completely wrong. That $3 billion was because NYC was going to allow Amazon to pay $27 Bln in taxes instead of $30 Bln in taxes (projected over 10 years). NYC was never going to write a check!!! She is either wildly confused, or is counting on the ignorance of her base to also not understand how this works.

And yes, I live in Wisconsin - we're excited for Foxconn. We know that a 'tax credit' doesn't mean writing a check, it means you'll get a little less than you otherwise would. We know that $27 Bln and 40k jobs are better than NO money and NO jobs.
FYI, if the news ever talks about money the same way Ocasio-Cortez seems to think it works, they'll use the word 'cash' They'll say it was a 'cash' deal. There's no money out of your pocket when there's a tax credit.

Do you watch Game Of Thrones? Convincing yourself of your superior morals makes you feel good, but it doesn't help the people you're supposed to be helping.

Didn't you know, Foxconn isn't going to be making panels in Wisconsin anymore.

https://www.bloomberg.com/opinion/a...finally-facing-the-reality-of-foxconn-s-plans

Carrier, foxconn, deals this administration has touted aren't coming to fruition, amounting to nothing more then political theater.

I also have to question that $27 billion figure. I've looked through dozens of articles and can't seem to find a source. It seems to me that cuomo said that was the amount and that's it, not verifiable at all. I'm going to bet that number is on the extremely generous side given he's the one touting the proposal. Mind you, that $27 billion is over a 25 year period if we take it at face value. Cuomo also made no guarantee that Amazon had to that full amount or if it was simply an estimate. Estimated don't mean jack if Amazon simply hires accountants to bring their effective tax rate down to 0 or close to 0% like what they currently pay for federal taxes.

It's no wonder people don't trust Amazon.

 

[JamesSWD]

Funny how the article doesn't mention that it was mostly Dem Socialist AOC and her coven that wrecked this deal 'for the people'. She even took credit for it and was widely reported in the news as the reason for Amazon pulling out. Even Cuomo took a sideshot at her for botching this, while the mayor tried to provide white knight cover for her.

AOC's outright ignorance, economic illiteracy, and not understanding the tax break caused this mess. She mistakenly believed that NY taxpayers were going to fork over $3B to Amazon, instead of the reality that they were going to get a tax break of $3B on the billions more in revenue they generated.

It was a win-win for NY and Amazon: Approx 25K high-paying Amazon jobs, plus all the thousands of side-effect jobs in the surrounding community, plus the tax revenue generated from Amazon, their employees, and from all the additional jobs created to support the growth.

The Dems like to falsely claim that Trump is destroying the economy and jobs, although he's improved the economy and millions of jobs have been created, along with record-low unemployment. Yet, the Dems have their pet socialists, like AOC, actually destroying economic growth & jobs.

 

[Bp968]

So? They don't need to be "in" NYC...even if it is the so called financial capital of the world. We have this thing called the internet, video conferencing etc.
Plus, just look what happened to Seattle, once Amazon, Starbucks & others set up shop?

Well for one, Seattle already had the infrastructure and supporting businesses to attract those companies. All this does is further elevate my point that there are only a select few locations these companies can setup in.

Yup. Huntsville Alabama, such a redneck backwater.

Weirdly its actually possible for tech companies to setup in places other than silicon valley (Austin, Seattle, etc).

I'd say most of the time basically a form of nepotism that ends up causing so many tech companies to end up in silicon valley. The idea that you'll be more likely to succeed in the land of the giants (and for a while it was true).

But if your already a giant? No, you don't "need" the super expensive city to setup your next part of your business. In fact, California and NY are actively running off large numbers of companies at the moment, especially small businesses (especially California).

 

[Evernessince]

Yup. Huntsville Alabama, such a redneck backwater.

Weirdly its actually possible for tech companies to setup in places other than silicon valley (Austin, Seattle, etc).

I'd say most of the time basically a form of nepotism that ends up causing so many tech companies to end up in silicon valley. The idea that you'll be more likely to succeed in the land of the giants (and for a while it was true).

But if your already a giant? No, you don't "need" the super expensive city to setup your next part of your business. In fact, California and NY are actively running off large numbers of companies at the moment, especially small businesses (especially California).

California is the 5th largest economy in the world and it's just a state. Clearly they are doing something right no matter the republican rhetoric thrown at it.

And correct, you don't need to be in a city that supports your company and employees but it sure does make things easier. My points were just that, reasons that tech favors certain cities.

Huntsville Alabama is a nice little growing tech hub and had been building up industries that attract high skill labor and supporting business that encouraged tech to move in to begin with. I pointed these factors out earlier and I appreciate you bringing up an example that demonstrates that point. Hopefully they are getting decent tax money and can put that to improving one of the worst school systems in the US.

 

[MilwaukeeMike]

Amazon payed 0 in federal taxes in 2017 and 2018. In fact they received $129 million back from the government in 2018

http://fortune.com/2019/02/14/amazon-doesnt-pay-federal-taxes-2019/



Didn't you know, Foxconn isn't going to be making panels in Wisconsin anymore.

https://www.bloomberg.com/opinion/a...finally-facing-the-reality-of-foxconn-s-plans

Carrier, foxconn, deals this administration has touted aren't coming to fruition, amounting to nothing more then political theater.

I also have to question that $27 billion figure. I've looked through dozens of articles and can't seem to find a source. It seems to me that cuomo said that was the amount and that's it, not verifiable at all. I'm going to bet that number is on the extremely generous side given he's the one touting the proposal. Mind you, that $27 billion is over a 25 year period if we take it at face value. Cuomo also made no guarantee that Amazon had to that full amount or if it was simply an estimate.

Yes, I did know the Foxconn plant plans were on the rocks. 30 days after our new Democratic governor took over things started looking shaky (coincidence?) . So on 1/30/19 (the date from your story) things were looking bleak. Then Trump called up Terry Gou (head of Foxconn) and now the plans are back on. Here's a story from a few days after the one you linked.

I agree the numbers are hazy. Anytime someone says a nice round number like $27,000,000,000 over 10 years, it's probably +/- 150%. You also have no way to figure out how much tax the employees of Amazon would be paying if they all had different jobs. (which they now will).

Estimated don't mean jack if Amazon simply hires accountants to bring their effective tax rate down to 0 or close to 0% like what they currently pay for federal taxes.

Why do you think Amazon paid no tax? Just go check what they paid, they're a public company, you can look it up easily. in 2018 they had Income Before Tax of $11,270,000,000, and they paid $1,197,000,000 in tax. that's an effective rate of $10.5%. I get it - it doesn't match what that story is you linked. But I have trouble believing a story that doesn't explain why Amazon can say they are paying tax and really they're not. If they're not, then what the heck is that $1.1 Billion on their financial statement all about?