Amazon: The Thread | 5,000 Jobs | 1M SQFT in Nashville Yards

[PruneTracy]

42 minutes ago, PaulChinetti said:

Compared to what we are going to pay. It doesn't seem like that much of a deal to me.
 

From an earlier post of mine.

"I am constantly surprised by journalists, who don't use links throughout a piece to provide more information. I mean why in an article like this should I have to google that deal in Virginia. So here ya go (below). Really seems like NYC did a incredibly poor job of negotiating . 

$3billion for for 25,000/40,000 = $125,000/$75,000

$573 (+$223) million for 25,000 = $22,920 (#31,840)

$102 million for 5,000 jobs = $20,400"

Well yeah, it's a bad deal compared to Tennessee but perhaps not in general. Again, it's about the amount their workers would make in a year, and the ten years they would spend not collecting taxes would be followed by ten years of making it back.

It's my understanding that the NY incentives for Amazon were the standard package the state offers to other businesses on a per-job basis; in other words, it wasn't necessarily that they are poor negotiators so much as the scope of HQ2 broke the bank, so to speak. You offer a company $10 million to relocate 80 jobs, it doesn't make for good headlines. You offer a company $3 billion for 25,000 jobs, people start paying attention. Of course if you make these standard incentives known then Amazon is going to try to take advantage of them, we knew all along that HQ2 was about who was willing to pony up the most.

Hindsight is 20/20 but it would have been prudent for NY officials to counter the $3 BILLION!!!!1 argument by pointing out that it was a standard package, as well as the fact that the money represents tax incentives that only materialize when the jobs arrive, rather than a giant bag of cash that is now free to spend on any number of progressive causes (a crucial point apparently lost on the allegedly learned New York Times peanut gallery). Oh well, more for us.

I would guess that the incentives for NY are higher relative to Tennessee because it costs more to do business there, between the cost of living, land value, etc. and the various regulatory and institutional hoops to jump through. Or maybe they are just really bad at... making deals. Sad!

1 hour ago, DDIG said:

I see Stand Up Nashville is retweeting celebratory tweets that Amazon in NYC is dead. So their goal isn’t a better deal just to kill Amazon?

The retweets are probably to show that they have the power to run Amazon out of town if they don't get a seat at the table. Not to be a Debbie Downer but this is more likely to put some wind in their sails and embolden them to "have more conversations" (i.e., make more demands) on pain of turning the local politicians against Amazon, which in Metro is not out of the realm of possibility. It seems a little boorish to call this behavior "rent-seeking" when discussing a company who so recently concluded their America's Next Top Tax-Voider competition but that's pretty descriptive of it.

 

[DDIG]

8 minutes ago, PruneTracy said:

I would guess that the incentives for NY are higher relative to Tennessee because it costs more to do business there, between the cost of living, land value, etc. and the various regulatory and institutional hoops to jump through. Or maybe they are just really bad at... making deals. Sad!

The retweets are probably to show that they have the power to run Amazon out of town if they don't get a seat at the table. Not to be a Debbie Downer but this is more likely to put some wind in their sails and embolden them to "have more conversations" (i.e., make more demands) on pain of turning the local politicians against Amazon, which in Metro is not out of the realm of possibility. It seems a little boorish to call this behavior "rent-seeking" when discussing a company who so recently concluded their America's Next Top Tax-Voider competition but that's pretty descriptive of it.

 

This is nowhere near similar to NYC though, so the thought that they are about to puff out their chest and run Amazon out if they don't get what they want is slightly absurd. Metro is on the hook for very little relatively. 5,000 jobs is much more manageable. And TECH is the economy of the future and Nashville desperately needs a shot in the arm in this area for its long-term future.  It isn't just about Amazon, but the amount of tech companies that will follow Amazon here over time to be a part of the scene they create will be priceless. 

[titanhog]

1 hour ago, smeagolsfree said:

The problem in NY was the City and the State seemed to be at odds over this. We dont have that issue here. The Whiney babies can scream but it is not going to go anywhere.

To me, the mistake that Amazon made was to split up HQ2, but not make both cities pay the exact same (or similar) amount per employee.  When one city sees that another city is getting off easier, it's understandable they would revolt.  I think the same would happen to Nashville or any other city if we felt we had to pay more to get the same thing.

[Guest]

The Stand Up (Sit Down ?) Nashville group are the perfect example of 'community' organizations who provide politicians (yes liberals in all cases I have seen) cover for voting to grow a city by palming off additional tax dollars to not stir the PR pot. 

Amazon calling the bluff of the anti-incentive crowd is the best lesson for all politicians willing to learn - "This is a free market, no one is forcing communities to put incentive packages together to bring new jobs and industry to your city. We will just go down the road ...have a great day.
This cuts the legs out from under the 'Sit Down Nashville' organization ...they just do not know it yet.

Edited February 14, 2019 by Guest

[OnePointEast]

Growth in 17 cities, Nashville not mentioned

"Spokesman Adam Sedo confirmed in an email to the Business Journals that the 25,000 jobs planned for New York will be spread among these cities or metropolitan areas: Atlanta, Austin, Boston, California's Bay Area, Chicago, Dallas, Denver, Detroit, Los Angeles, Minneapolis, New York, Phoenix, Pittsburgh, Portland, San Diego, Toronto and Vancouver."

Edited February 14, 2019 by OnePointEast

[titanhog]

5 minutes ago, OnePointEast said:

Growth in 17 cities, Nashville not mentioned

"Spokesman Adam Sedo confirmed in an email to the Business Journals that the 25,000 jobs planned for New York will be spread among these cities or metropolitan areas: Atlanta, Austin, Boston, California's Bay Area, Chicago, Dallas, Denver, Detroit, Los Angeles, Minneapolis, New York, Phoenix, Pittsburgh, Portland, San Diego, Toronto and Vancouver."

I still bet our numbers grow over time.  It might not be within the next 5 years or so...but eventually.

[MLBrumby]

Then you should expect BNA's air service will increase to most (all?) of those places. 

[OnePointEast]

2 minutes ago, titanhog said:

I still bet our numbers grow over time.  It might not be within the next 5 years or so...but eventually.

Hopefully, I want Nashville to be getting these jobs!

[titanhog]

Just now, OnePointEast said:

Hopefully, I want Nashville to be getting these jobs!

I think they'll see that Nashville and TN are a good fit.  Good business climate...exciting city (and state) with an amazing downtown...growing...no state income tax...decent climate year round...etc.

[LA_TN]

Dear Metro Council Members,

You may have seen Amazon has announced we will not be moving forward with plans to build a headquarters in New York City. However, our plans for Nashville remain unchanged, and we hope to begin hiring as soon as possible. Details on the New York City announcement can be found at the link below. Thank you and please reach out if you have any questions.

Best, 
Ashleigh de la Torre

https://blog.aboutamazon.com/company-news/update-on-plans-for-new-york-city-headquarters

 

**Message posted by one of our council members

Edited February 15, 2019 by LA_TN

[KJHburg]

Amazon has about 300 office workers now in Atlanta and I would look for that to increase.  Austin already has 1000 office workers and just announced plans this week to lease another 145K of office space there.  https://www.bizjournals.com/austin/news/2019/02/14/amazon-cancels-plans-to-put-part-of-hq2-in-new.html?ana=e_ae_set1&s=article_du&ed=2019-02-14&u=oAaDx%2B74FoP4qOJ%2By4AU6dhJPpc&t=1550194629&j=86683471

Amazon should have broke this huge office up long ago like the logistics jobs going into Nashville.  Any huge company does not want to be concentrated in a few labor pools.   So this 50,000 job sweepstakes first was broke in 2 then 3 now into 17-18 pieces all over the country and 2 cities in Canada.    

[Guest]

Best write-up I have read on the outcome... (emphasis mine)

https://www.city-journal.org/amazon-cancels-queens-hq?fbclid=IwAR20ZKjfwcoqAjQmxKTb9-I74c-2M0DFK6AswwkGAIY5PzrbBfdzE5XsuqI

 

Quote

Amazon’s announcement that it will cancel its plans to build a major office complex in Long Island City is a huge defeat for Governor Cuomo and Mayor de Blasio, who staked their political capital on the high-profile deal. The collapse of the deal is a victory, though, for the anti-gentrification, anti-development Left, which assailed the plan as a giveaway to a trillion-dollar company and its billionaire owner. They claimed that Amazon would drive up rents, destroy the local community, create noise pollution, and increase wealth inequality in New York. A typical response came from law professor and three-time loser political candidate Zephyr Teachout, who exulted on Twitter, “!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! POWER OF THE PEOPLE. Speechless. Truth to power wins!”

What has “truth to power” won? It’s not as though Amazon was preventing the rise of sustainable, green, unionized, and well-paying manufacturing jobs in Long Island City, or stopping the construction of affordable low-income housing, along with schools and parkland. The area where the company planned to build its secondary headquarters has been the focus of economic development plans for decades. It is presently the site of parking lots, storage units, and empty, city-owned land. Now it will stay that way. Amazon was planning to rent 1 million square feet in the Citigroup Tower in Long Island City, which is largely vacant of tenants, and will now remain so.

Opponents claimed that the incentives offered to Amazon were unfair, and they have a point: most corporate subsidies are ineffective and wasteful. But Amazon wasn’t being offered anything obscene. Job-creation tax incentives are written into state law and are available to any company doing business in New York, and represent foregone taxes on income that otherwise wouldn't exist. And the local politicians crying loudest have never squawked about the $420 million in transferable tax credits that the state gives every year to the film and television industries. Why would they? Many take major campaign contributions from the studios based in their Queens districts. “I hope this is the start of a conversation about vulture capitalism and where our tax dollars are best spent,” city council speaker Corey Johnson, a 2021 mayoral hopeful, said in a prepared statement. He has received substantial contributions from film and television industry executives, too, and has never complained about the Empire State Film Tax Credit Program.

Opponents also argued that Amazon is not unionized, and that non-union companies are not welcome in New York, a “union town.” But the Amazon headquarters would have been built by union labor. The company was going to employ 3,000 unionized building-service workers in its 8 million square feet of office space, which is why local 32BJ was so enthusiastic about the deal. Those jobs are gone now, too.

Some progressives were angry that Amazon wasn’t promising to guarantee enough well-paying jobs to residents of the nearby Queensbridge Houses, the largest public housing project in the United States. Decrying the “gentrification of jobs,” critics sneered that Queensbridge residents would get only a handful of entry-level positions and minimal training. Not to worry: now they won’t get anything.

Amazon critics bought wholesale the fiction that New York City is where everyone wants to be, so even the most draconian conditions will be acceptable to potential employers. Council Member Jumaane Williams, now running for public advocate, gave voice to this complacency when he said, “I expected this mayor to be a stalwart of deeply income-targeted affordable housing . . . You give away $3 billion? $3 billion? To the richest man in America? For a company that will most likely come here anyway?” So much for Gotham’s unbeatable appeal.

New York State can ill afford to thumb its nose at 25,000 well-paying jobs, which would have produced billions of dollars in tax revenues and contributed mightily to the local economy. The state is losing residents to out-migration and now faces a revenue gap of $2.3 billion from the exodus of high-earners to Florida and other low-tax states. Critics of the Amazon plan can rejoice in their success in having prevented economic development in a moribund area of western Queens. They have preserved stagnation and called it progress. Nice work, guys.

 

[grilled_cheese]

SoUnDs PrEtTy FrEeMaRkEt tO mE

[Armacing]

I think this move by Amazon (to cancel the NY HQ) adds credibility to their stance that they are doing what's right for Amazon.  In case any council members/city administrators in Nashville were under the mistaken impression that Amazon will tolerate a certain level of abuse because they have to be here, that belief must now be completely dispelled.  Seattle learned this lesson recently (payroll tax failure), now New York learned this lesson.  The question is, are we smarter than them?

[Rockatansky]

21 hours ago, DDIG said:

So their goal isn’t a better deal just to kill Amazon?

That's the impression I have.

[Hey_Hey]

This whole ordeal is also going to add additional incentive for existing NYC-based corporations to look elsewhere for their business operations in the future. If a decent number of NYC's elected officials (and elected officials in the state) are seemingly against a project such as this then what's the next step?  Will any state and local incentives offered by a negotiating team be invalidated by certain elected officials? Will the toehold that these elected officials have now be enough to pass additional taxes on businesses and high income individuals in five years similar to what Seattle attempted last year?  If a company in Manhattan thinks that those are possibilities maybe they begin to look elsewhere, and I guarantee Nashville (and Atlanta, Dallas, Austin, Denver, etc.) will be on those lists.  The benefit of these jobs being located in NYC isn't nearly as great as it was just a few years ago, and I suspect the importance of them being based in NYC will continue to erode as time goes on. 

I really think this HQ2 announcement and then pullout will have ramifications that will cascade to other companies and sectors. The loss of 25,000 future jobs may just the the tip of the iceberg.

Edited February 15, 2019 by Hey_Hey

[KJHburg]

One thing Amazon did in Seattle after the homeless tax fiasco was to offer up a  58 story ft tower in Seattle for sublease while leasing more and more space in suburban Bellevue including buying land there for future buildings. 

From Seattle Business Journal Jan. 30 2019

""Amazon.com Inc.'s decision to sublease all of the office space in the 58-story Rainier Square tower is more damaging psychologically to Seattle than it is to market fundamentals, said Seattle real estate executive Craig Kinzer.  The Business Journal this week reported that Amazon will market for sublease all 722,000 square feet in the flashy skyscraper that's rising in the heart of downtown.  "It's an extremely unusual move," said Kinzer.""

and from a Feb. 14 2019 article in SBJ

""Amazon has leased more than 1 million square feet in Bellevue. The company in August leased Expedia's current 400,000-square-feet headquarters and said at the time it had 2,000 employees in Bellevue and planned to add capacity for an additional 2,500 employees by 2020.  Amazon is also moving into Bellevue's new, 354,000-square-foot Centre 425 building and at least 280,000 square feet at the Summit III tower nearby. Amazon hasn't responded to a request to confirm the Summit III lease.""

This company is not fooling around.   Amazon is looking after themselves for sure.  

 

[PaulChinetti]

I mean if Amazon can look after themselves then so can the people. 

It could hurt/help/have no effect on either party. But the people spoke up and it went away. 

Amazon obviously didn't want to be in NYC that bad, else they would have stayed and renegotiated their tax breaks. This just makes is abundantly obvious to me that they chose that location because of the tax breaks not for any other reason. 

[Guest]

Of course they were there for the tax breaks.... 

 

And there is no question this Hurts NYC...they give up 27 billion in new tax revenue (30B - the 3B tax break)

Edited February 15, 2019 by Guest

[Mr_Bond]

1 hour ago, PaulChinetti said:

I mean if Amazon can look after themselves then so can the people. 

It could hurt/help/have no effect on either party. But the people spoke up and it went away. 

Amazon obviously didn't want to be in NYC that bad, else they would have stayed and renegotiated their tax breaks. This just makes is abundantly obvious to me that they chose that location because of the tax breaks not for any other reason. 

The NY politicians could have gone back to Amazon and asked to renegotiate.  As Amazon said in the press release, this is a long term relationship and we want to be with someone who wants to be with us.  The climate was too hostile.  Now, thousands of New York jobs are going to other cities.

This is happening to other high-tax states.  I recently spoke with someone who just moved here from Chicago who said their salary is the same but they're getting a significant raise from tax savings.  Example: their annual property taxes were $17,000 and are now $3,000 (same value home).

[nashvylle]

is anyone attending the StandUp Nashville meeting tonight?

[e-dub]

15 minutes ago, nashvylle said:

is anyone attending the StandUp Nashville meeting tonight?

I planned on it, but those plans ended up getting blown up.

[DeemonBruhn]

I mean if Amazon can look after themselves then so can the people. 
It could hurt/help/have no effect on either party. But the people spoke up and it went away. 
Amazon obviously didn't want to be in NYC that bad, else they would have stayed and renegotiated their tax breaks. This just makes is abundantly obvious to me that they chose that location because of the tax breaks not for any other reason. 

Don’t mistake some people for “the people.”

Amazon chose NYC for access to the greatest intellectual talent collection in the world. The incentives were a bonus. They only pulled out when it became absolutely toxic thanks to “the people” and some select politicians with ulterior motives. They already have a large presence there, now they will just grow more slowly instead of the huge infusion.

[DDIG]

51 minutes ago, e-dub said:

I planned on it, but those plans ended up getting blown up.

Follow the twitter feed. It’s comedy gold. Did you know Amazon doesn’t make most its money on used books but instead selling your info to ICE?

 

[e-dub]

Cool!