| CURRENT EVENTS Amazon pulls out of NYC

planomateo

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Amazon selects New York City and Northern Virginia for new headquarters

Lot of incentives begin given to Amazon.
  • Amazon will receive performance-based direct incentives of $1.525 billion based on the company creating 25,000 jobs in Long Island City. This includes a refundable tax credit through New York State’s Excelsior Program of up to $1.2 billion calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to $48,000 per job for 25,000 jobs with an average wage of over $150,000; and a cash grant from Empire State Development of $325 million based on the square footage of buildings occupied in the next 10 years. Amazon will receive these incentives over the next decade based on the incremental jobs it creates each year and as it reaches building occupancy targets. The company will separately apply for as-of-right incentives including New York City’s Industrial & Commercial Abatement Program (ICAP) and New York City’s Relocation and Employment Assistance Program (REAP).
  • Amazon will receive performance-based direct incentives of $573 million based on the company creating 25,000 jobs with an average wage of over $150,000 in Arlington. This includes a workforce cash grant from the Commonwealth of Virginia of up to $550 million based on $22,000 for each job created over the next 12 years. Amazon will only receive this incentive if it creates the forecasted high-paying jobs. The company will also receive a cash grant from Arlington of $23 million over 15 years based on the incremental growth of the existing local Transient Occupancy Tax, a tax on hotel rooms.
  • Amazon will receive performance-based direct incentives of up to $102 million based on the company creating 5,000 jobs with an average wage of over $150,000 in Nashville. This includes a cash grant for capital expenditures from the state of Tennessee of $65 million based on the company creating 5,000 jobs over the next 7 years, which is equivalent to $13,000 per job; a cash grant from the city of Nashville of up to $15 million based on $500 for each job created over the next 7 years; and a job tax credit to offset franchise and excise taxes from the state of Tennessee of $21.7 million based on $4,500 per new job over the next 7 years.
 

TerryP

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I saw bits and pieces of this in the news these last few days. I've avoided it under the suspicion I'm going to stumble across Ocasio-Cortez opinions. I know, once again, there's some truth into the old adage "got looks but no brains."

OK. That's a little judgmental considering I don't know her. That said, I'm left with the impression her brain starts working as soon as she gets up in the morning and doesn't stop until she gets to her office.
 

It Takes Eleven

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Many competitors spent millions to develop plans to woo Amazon. Most will just expense them, file away the plans in case they have another big fish opportunity. Atlanta, however, has decided to plunge ahead with a development of "The Gulch", an area on the west side of Mercedes Benz Stadium and Phillips Arena that has a several major rail lines, crisscrossed by viaducts. This was to be their site for Amazon. The city is kicking $1.9 billion into a project without an anchor. The area will have to be raised about 40 feet to street level with concrete and steel underpinning, and then development will go up from there. If you are familiar with Atlantic Station in Midtown Atlanta, this will be a similar project on a much larger scale. Atlantic Station was built on concrete pilings off the ground because of the old steel mill site was a brown field. In this case, the infrastructure will get to surrounding street levels and allow railroads to continue unimpeded.

I think it's going to be a colossal failure, as planned. Atlantic Station had its share of bankruptcies and foreclosures, and its success now is largely due to the second owners getting in cheap on the backs of lender losses. There is too much retail space planned in The Gulch (who knows what brick and mortar retail will look like in ten years), and I question whether development will occur at pace to maintain momentum through whatever downturn will be experienced during build-out. The corruption that will occur during this project will make ATL airport operations look like a monastery.

RTR,

Tim
 

planomateo

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Amazon HQ2's 50,000 jobs will cost New York and Virginia $4.2 billion

New York will have to issue bonds because it is already more than $100 billion in debt ($116 billion as of fiscal year 2017). For just the city, debt service costs totaled about 11 percent of tax revenues last year. Debt for New York City has grown from $4,923 per person in 2000 to $10,113 in 2017, an increase of 105 percent, the comptroller’s office reports.
New York added $3.15 billion of debt to its $116 billion budget shortfall in an effort to add 3% more jobs annually. Virginia will add around $1.05 billion to its debt in exchange for 25,000 to 40,000 jobs. At some point that money will need to be paid back and will result in the need for either higher taxes or reduced services or both.
 

planomateo

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What would voters say to these incentives?

Calgary voters said no to the Olympic bid...

 

rocknthefreeworld

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What would voters say to these incentives?

Calgary voters said no to the Olympic bid...
Someone has been paying attention in Calgary. The Olympics are always sold (like all sports team related items) as some huge financial boon for the economy. Then you realize years later the only folks who really made anything on it are long gone and your butt is still stuck paying the taxes on the original construction as well as maintenance on the things that sit empty years later. Atlanta was a little smarter than most because they made the games regional so each city only had so much to pay for but there are still things just sitting around now.
 

planomateo

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No doubt, I was impressed that they voted no. It's a not binding vote, so the council can still vote yes.

Will be interesting to see how the IOC handles this and future bids, as many cities are getting smart.

Too bad cities aren't voting for Amazon incentives. I'd vote no if they wanted to build that in Collin County (North Texas).

Tokyo 2020 numbers have doubled. There needs to be a vote for these spends.
 

It Takes Eleven

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What would voters say to these incentives?

Calgary voters said no to the Olympic bid...
Someone has been paying attention in Calgary. The Olympics are always sold (like all sports team related items) as some huge financial boon for the economy. Then you realize years later the only folks who really made anything on it are long gone and your butt is still stuck paying the taxes on the original construction as well as maintenance on the things that sit empty years later. Atlanta was a little smarter than most because they made the games regional so each city only had so much to pay for but there are still things just sitting around now.
Atlanta's growth helped it get past the typical post-Olympic slowdown, and you're right using facilities from Birmingham to Athens to Washington, DC helped immensely; however, the biggest part of the financial piece was having meaningful uses for the major construction projects, such as converting the Olympic stadium to the Braves Stadium (it kept the Braves downtown for another 20 years) and the athlete housing converting to Georgia Tech and Georgia State dorms. We watched volleyball in the old Omni.
 

rocknthefreeworld

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We still have the softball facilities down in Columbus. I think the NCAA used them for a few tournaments over the years but lately they are mostly empty.
 

planomateo

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Amazon ($860B company) essentially got hundreds of cities across the US to provide information about their cities, their plans, and incentives for nothing. They didn't have to do anything except look at the data to figure out what they wanted. That's some power...

These cities never had a legit shot, the election was rigged from the beginning.


Amazon’s HQ2 Spectacle Should Be Illegal - The Atlantic

Was this national auction nothing more than a scripted drama to raise the value of the inevitable winning bid? And did the retailer miss an opportunity to revitalize a midwestern city by choosing to enrich the already-rich East Coast?

All good questions. But here’s the big one: Why the hell are U.S. cities spending tens of billions of dollars to steal jobs from one another in the first place?


Every year, American cities and states spend up to $90 billion in tax breaks and cash grants to urge companies to move among states. That’s more than the federal government spends on housing, education, or infrastructure. And since cities and states can’t print money or run steep deficits, these deals take scarce resources from everything local governments would otherwise pay for, such as schools, roads, police, and prisons.

In the past 10 years, Boeing, Nike, Intel, Royal Dutch Shell, Tesla, Nissan, Ford, and General Motors have each received subsidy packages worth more than $1 billion to either move their corporate headquarters within the U.S. or, quite often, to keep their headquarters right where they are.

New Jersey and Maryland reportedly offered $7 billion for HQ2, which would be the biggest corporate giveaway in American history.

You might think, Don’t blame the companies. These businesses have a fiduciary obligation to make money, and it’s negligent to leave cash piles on the table while their competitors are raking it in. And you might even think, Don’t blame the local governments. Not bidding on an exciting new project feels akin to unilateral disarmament in a war for talent and business. Sometimes a big new firm can revitalize a downtown area and become a magnet for new firms.

Read: I delivered packages for Amazon and it was a nightmare.

But there are three major problems with America’s system of corporate giveaways.

First, they’re redundant. One recent study by Nathan Jensen, then an economist at George Washington University, found that these incentives “have no discernible impact on firm expansion, measured by job creation.” Companies often decide where they want to go and then find ways to get their dream city, or hometown, to pay them to do what they were going to do anyway. For example, Amazon is a multinational company with large media and advertising divisions. The drama of the past 13 months probably wasn’t crucial to its (probable) decision to expand to New York City, the unambiguous capital of media and advertising.

Second, companies don’t always hold up their end of the deal. Consider the saga of Wisconsin and the Chinese manufacturing giant Foxconn. Several years ago, Wisconsin Governor Scott Walker lured Foxconn with a subsidy plan totaling more than $3 billion. (For the same amount, you could give every household in Wisconsin about $1,700.) Foxconn said it would build a large manufacturing plant that would create about 13,000 jobs near Racine. Now it seems the company is building a much smaller factory with just one quarter of its initial promised investment, and much of the assembly work may be done by robots. Meanwhile, the expected value of Wisconsin’s subsidy has grown to more than $4 billion. Thus a state with declining wages for many public-school teachers could wind up paying more than $500,000 per net new Foxconn job—about 10 times the average salary of a Wisconsin teacher.

Third, even when the incentives aren’t redundant, and even when companies do hold up their end of the bargain, it’s still ludicrous for Americans to collectively pay tens of billions of dollars for huge corporations to relocate within the United States.

No story illuminates this absurdity more than the so-called Border War, in which the Kansas and Missouri sides of Kansas City have spent zillions of dollars dragging companies back and forth across state lines, within the same metro area. Several years ago, Kansas lured AMC Entertainment with tens of millions of dollars in incentives. Then Missouri responded by stealing Applebee’s headquarters from Kansas with another incentive package. Back and forth they went, until both states had spent half a billion dollars creating no net new jobs but changing the commutes of 10,000 Kansas City workers who got caught up in an interstate duel.


“We need a national truce, both within states and between states,” said Amy Liu, the director of the Metropolitan Policy Program at the Brookings Institution. “There should be no more poaching of private companies with public funds.” But how would the United States ban states and local governments from poaching jobs from one another, or from giving tax dollars to private corporations?

First, Congress could pass a national law banning this sort of corporate bribery. Mark Funkhouser, a former mayor of Kansas City, Missouri, envisions the law as the domestic version of the Foreign Corrupt Practices Act, which makes it illegal for Americans to bribe foreign officials.
Read: The history of Sears predicts nearly everything Amazon is doing.

It’s not entirely clear whether that would pass constitutional muster. The Supreme Court hasn’t ruled decisively on whether the Commerce Clause gives Washington the authority to ban interstate bidding wars. In the 2006 Supreme Court case DaimlerChrysler Corp. v. Cuno, Ohio taxpayers sued the state after it paid the automaker DaimlerChrysler about $280 million in tax exemptions and tax credits. The Sixth Circuit Court sided with the taxpayers, striking down Ohio’s subsidy as a violation of the Commerce Clause. But the Supreme Court avoided a final judgment on the matter by finding unanimously that the plaintiffs did not have standing to bring the suit.

Second, Congress could make corporate subsidies less valuable by threatening to tax state or local incentives as a special kind of income. “Congress should institute a federal tax of 100 percent” on corporate subsidies, Jack Markell, a former governor of Delaware, wrote in The New York Times. “This would not include investments in public infrastructure, work force development or other investments that can attract employers while also providing a significant long-term benefit to taxpayers.” Taxing subsidies would hopefully force cities to change their economic-development strategies, from importing other states’ companies to building their own—through investing in research universities, building more housing, and welcoming immigrants, since foreign-born Americans have the highest rates of entrepreneurship.


Finally, the federal government could actively discourage the culture of corporate subsidies by yelling, screaming, and penny-pinching. As Meagan Day wrote in Jacobin, “The federal government could withhold funds from governors and mayors who threaten to poach jobs from other states, or who won’t disclose their incentive packages.” Washington tends to look on quietly when cash-strapped states break the bank to welcome glitzy tech firms. But an attitude change at the top could trickle down to the local level. Donald Trump, or another president, could have made a national address after the HQ2 announcement slamming Amazon for soliciting taxpayer funds in a silent auction. He could have called a summit to encourage the nation’s mayors and governors to offer the same tax subsidy for HQ2—zero dollars and zero cents. Even a tweet could suffice: “7 BILLION FOR BEZOS?? Trillion-dollar companies in America don’t need our welfare! Bad!”

But no one is yelling and screaming. Instead, in a starkly divided country, corporate pandering is the last bastion of bipartisanship, an activity enjoyed by both Democrats and Republicans at every level of government. New Jersey and Maryland, both blue states, insisted that Amazon take $7 billion in tax savings just months after congressional Republicans passed a corporate income-tax cut that some analysts project will save Amazon nearly $1 billion over the next decade.

Corporate America is getting all the help it doesn’t need. You and I may not like it. But executives such as Jeff Bezos have no reason to care. They are winning by the rules of a broken game.
 

sk33tr

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they're (amazon) building a new distribution center not far from me...~11 minutes according to google maps.

when i first heard about it, i thought about applying there and even looked into when they were going to start allowing you to do that and what the website was and all that stuff. but after reading some of the stories from people who have worked for amazon, i think i'll stay right where i'm at.

*the distribution center would be MUCH closer than my current job...by about 22 miles

*but my current job offers health/dental/vision insurance, 401k, and incentives.....even though i'm only part-time (for now). amazon wouldn't offer that unless i was full-time; which there would be no guarantee i'd start at full-time

*not sure how i'd like working in a distribution center vs customer service (of which i have over 2 decades of experience)

the benefits of working closer would not outweigh the issues i'd have if i really didn't like the job and was as stressful as what former workers have said. i refuse to work in a high-stress job no matter how good the money or benefits are. i value happiness and sanity over both of those.
 

planomateo

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Bezos shakedown of NYC appears to be ending in the most epic swan dive.
 

Sgt. Lincoln Osiris

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The saddest part of the whole ordeal is how AOC's dumb ass celebrated Amazon's pullout, and said "we can spend the 3 billion we were giving them elsewhere"

This part-time bartender has no fucking clue how economics or TAX BREAKS work, yet she was appointed to the House Financial Services Committee?

10848


 

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I know AOC isn't the driving force behind Amazon leaving, but damn...Celebrating the loss of all those jobs. "We'll find somewhere else to spend the money." Yeah, what about all those jobs?

She's an idiot (understatement), but what about those who elected her? The same flock who have elected Pelosi since the 80s...
 

planomateo

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I didn't care for how Amazon handled this from the get go.

I'm not a fan of these massive incentive packages for businesses.
 

rocknthefreeworld

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Not a fan of huge incentive packages for business either, but it isn't like her complaint is that the government shouldn't be giving money away or buying votes. She is fine with both but prefers to route of making everyone equal (read poor) and making herself the hero for everything.
 

It Takes Eleven

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I didn't care for how Amazon handled this from the get go.

I'm not a fan of these massive incentive packages for businesses.
I'm not, either, particularly for a project like Amazon. The long-term benefits of most packages do make some financial sense, IF the company is successful and upholds its intent to employ at the projected volume and rate. Looking at Alabama, the Mercedes deal was decried as a corporate giveaway, saying Alabama could only get a Mercedes if they gave away the farm. Without Mercedes, Alabama wouldn't have landed Honda. Both employ over 4,000 each, I believe. However, the average salary for workers at both locations are far below what was billed. Over half of the workers at both plants are temps or contractors, not Honda or Mercedes employees. At Honda, there is one very large temp company that every line worker must work for for a year before they can apply for a Honda job. I'm not sure of the process at Honda, but I do know over half are not Mercedes employees.

Despite the temp issue, Mercedes and Honda are success stories (much like SC's BMW and Michelin deals). The ThyssenKrupp steel mill near Mobile got major incentives. At the time of its construction, it was the largest private sector construction project in the country. ThyssenKrupp got squeezed because of their reliance on their Brazilian operation and ended up selling the mill, losing over $3 billion of its $5 billion investment. The plant is open and operating, and hopefully the new operators who got in on the cheap can keep going. It's reliant on the Alabama auto industry, as well as (to some degree) ThyssenKrupp's Brazilian facility. Time will tell on that project.

All of the new industry increases the cyclicality of Bama's economy. When you're a slow- or no-grower, there are fewer peaks and valleys.

I'll tell you what bothers me, tremendously, is how much of our food supply leaves our shores, is processed overseas, and returns labeled as a U.S. product. Major players in the U.S. food industry take wild gulf shrimp and ship them to China, where they are processed and returned. We don't have the controls to confirm Asian-sourced shrimp aren't commingled. Yeah, processing plant jobs aren't the most glamorous, but they have their place in our economy, and with our national security. And don't get me started on the false labeling on vitamins and supplements.

RTR,

Tim
 

planomateo

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I'll tell you what bothers me, tremendously, is how much of our food supply leaves our shores, is processed overseas, and returns labeled as a U.S. product. Major players in the U.S. food industry take wild gulf shrimp and ship them to China, where they are processed and returned. We don't have the controls to confirm Asian-sourced shrimp aren't commingled. Yeah, processing plant jobs aren't the most glamorous, but they have their place in our economy, and with our national security. And don't get me started on the false labeling on vitamins and supplements.
Do you have any links to articles you can share? I'd love to read more about this.
 

It Takes Eleven

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Do you have any links to articles you can share? I'd love to read more about this.
The gulf shrimp fact is from an exec with a food company. I have no link for that. The Wall Street Journal hits on how the tariffs hit U.S. seafood.


This article is dated, but touches on how things travel:

Again, this organization has an agenda, but I had read about vitamins before:
 

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