Quick Takes (v46): A Victory Lap?

There's MATH, the Andrew Yang tag for Make American Think Harder, and then there's math, the kind that says that getting 6% of something is just as good as getting 100% of the same thing., which is the kind of math Alexandria Ocasio-Cortez is proudly trying to sell us.

AOC is tweeting about a "victory lap" because Amazon, which is not building its 25,000-job second headquarters in Queens in part because of her efforts, is instead is adding 1,500 employees in leased space in Hudson Yards. In the article linked above, we learn that

"The giant online retailer said it has signed a new lease for 335,000 square feet on the city’s west side in the new Hudson Yards neighborhood, where it will have more than 1,500 employees,” The Wall Street Journal reported. "Amazon is taking the space without any of the special tax credits and other inducements the company had been offered to build a new headquarters in the Queens neighborhood of Long Island City, the company said."

That's right: 1,500 jobs instead of 25,000; leased space instead of new construction, and no incentives - well, none that we no of for Amazon anyway.

The developers of the Hudson Yards project, however, are getting nearly twice what Amazon would have had for their HQ2, according to this piece in the New York Times.

But with far less public attention, the city government has for more than a decade been funneling even more aid to Hudson Yards, a 28-acre complex of gleaming office buildings and luxury residential towers that is one of the nation's' biggest real estate projects in recent years. 

In all, the tax breaks and other government assistance for Hudson Yards have reached nearly $6 billion, according to public records and a recent analysis by the New School.

And Amazon may still be able to get some breaks here if they qualify for a "discretionary tax credit" that three other companies mentioned in the article are eligible for; the credits, if fully realized, would be worth over $40M for those companies alone.

Also happy about this bullet-dodging announcement? State Senator Michael Gianaris, the guy who was put on a team that could kill the Amazon project, and when they pulled out, was abruptly removed from the group. From a NY Times article yesterday here's what he said in a statement.

Amazon is coming to New York, just as they always planned. Fortunately, we dodged a $3B bullet by not agreeing to their subsidy shakedown earlier this year. 

Gianaris and AOC seem convinced that the $3B would have gone to Amazon whether they had created 1 job or 1 million jobs, but that doesn't jive with multiple published reports, including this one in the Rochester Democrat and Chronicle.

As part of the deal, New York state taxpayers will be on the hook for up to $1.525 billion should Amazon meet its 25,000-job pledge, pay an average salary of $150,000 and occupy at least 4 million square feet of space within the next 10 years, as promised. That number would increase to $1.7 billion if Amazon exceeds its goal and gets to 40,000 jobs by 2032.

The D&C report is consistent with the Agreement which shows the job creation incentives are entirely dependent on the jobs actually being created within the specified timeframes.

And yet, even today, AOC was tweeting something completely different. Take a look.

While we’re here, let’s clear up some GOP disinfo: - “It’s 1500 jobs vs 25,000”: The 25,000 jobs figure was a 10-20 year fantasy # from Amazon, not a promise or agreement. In exchange for that lack of commitment, they wanted billions of public $. Their Y1 jobs projection was 700.

Those subsidies are a "10-20 year fantasy" if Amazon doesn't deliver the jobs, as far as I can tell. And of course I'm not an expert on how to read these things, but the table in the agreement seems pretty clear. 

And I get that economic development deals are messy and that there are always opposing viewpoints on them. I get that I live upstate not in Queens or in Hudson Yards, and so wouldn't have felt the pain of the HQ2 deal, even though I would have felt the benefits. But as a New Yorker, I'd like to see politicians doing less patting themselves on the back for killing a deal the size of Amazon's HQ2, and see them be a little more honest in their communications. 

There'll be plenty of time for patting themselves on the back when, for example, they fix the corporate tax code so that companies like Amazon don't get to pay $0 in federal taxes. 

Just a thought.