Announcements From The Mayor: Fill & Download for Free

Well, the game is over, so there’s no longer an active controversy, just recriminations. But here’s what happened:Two years ago Amazon announced that it was going to create a second global headquarters in North America and solicited proposals from any city that believed it would be a good home for them. Because this new project, named Amazon HQ2, would come with tens of thousands of new, mega-high-paying jobs and lots of other benefits, there were many, many, many cities that tried to woo Amazon. As of October 23, 2017, more than 235 proposals had been received by the company, representing cities and regions from 54 states, provinces, districts, and territories. Most of these were obviously non-starters, and from the very beginning most knowledgeable observers figured that despite the hype of a Great National Search the obvious location was going to be somewhere between “a little south of Washington, DC” and “a little north of New York City”.For two years, this “competition” was the single biggest thing in the field of economic development, roughly akin to cities bidding to host the Olympics…but with potentially many more long-lasting consequences. Halfway through—just over a year ago—Amazon released the list of 20 finalists:Then, on November 13, 2018, Amazon announced its decision: rather than a single HQ2 it was going to divide the project into two, building one in Northern Virginia and the other in…New York City. The NYC site would be on a large parcel in the neighborhood known as Long Island City, in the borough of Queens along the East River, directly facing midtown Manhattan.While not completely unexpected (at least that HQ2 would be near NYC), the announcement was a bombshell. That was because—although many, many people, politicians, organizations and entities had joined in supporting letters welcoming Amazon—the entire actual negotiation process had been done in secret, by the Mayor and the Governor, respectively Progressive and Liberal Democrats who loathe each other but who worked together to land Amazon.When the location decision was announced, so were the terms of the deal that the City, State and Amazon had struck:The subsidies offered to Amazon in New York include performance-based direct incentives of $1.525 billion based on whether the company created 25,000 new jobs with an average wage upward of $150,000 a year. This included a refundable tax credit through the state’s Excelsior Program of up to $1.2 billion, calculated as a percentage of the salaries Amazon expected to pay employees over the following 10 years. Additionally, the Empire State Development Corporation would give Amazon a cash grant of $325 million based on the occupancy rates of HQ2 buildings over in the following 10 years.Under an agreement with New York City's government, half of the property taxes for the city's HQ2 campus would be waived and the exempt amount would go to the city's PILOT (payment in lieu of taxes) fund to pay for infrastructure improvements in the city. Amazon would get access to a new helipad on the river, and New York State would fund additional infrastructure improvements in the area.On the flip side, Amazon would invest $2.5 billion in the LIC HQ2 and projected it could generate $10 billion in tax revenue for New York over the next 20 years. Amazon would eventually employ up to 40,000 people in LIC once the company expanded to 8 million square feet of office space, and Amazon said it would donate a site to build a new primary or intermediate public school serving 600 students. It would also set aside space on its campus for a tech startup incubator, and promised investments for a new 3.5-acre waterfront esplanade and park and infrastructure upgrades in the area. There would also be "a lot of efforts" to help residents at the Queensbridge Houses, a large public housing development in the neighborhood.The combination of the jobs, incentives and promises was met with differing reactions:Economic development advocates saw 25,000–40,000 new, high-tech, $150k jobs as a Good Thing, along with 8 million feet of office space and lots of infrastructure improvements (plus the school, park, etc.)But many people on the Progressive end of the spectrum were outraged that New York was going to “spend” billions of dollars to “bribe” the world’s biggest company to come to the City and provide a “private heliport for the world’s richest man so that he could avoid the broken down subway.”Coupled with concerns about Gentrification of the surrounding neighborhood, many local politicians, including the currently high-profile congresswoman Alexandria Ocasio-Cortez whose district is nearby the LIC site, began to furiously attack the City, Amazon, the Mayor and the Governor for “stealing from the poor to give to the rich”. While polls consistently showed that over two-thirds of the people in New York wanted Amazon to locate here and bring its new, high-paying jobs, the rising chorus of opposition from the Left became a PR problem for Amazon. Already wounded from other PR issues (from Jeff Bezos’s personal life, to Amazon’s size and generally increasing scariness), the controversy kept getting louder, rather than going away.Even though the deal theoretically did not require a popular vote and was insulated from the local political process, the rising, vocal opposition led the Democratic-controlled New York State Senate to appoint the leading opponent of the deal (the local state senator from the area of the site) to chair a committee that could have interfered with the closing of the transaction.That was apparently the last straw for Amazon, and on February 14, 2019, the company announced without warning that it was canceling the project, and would just go with Northern Virginia, while continuing to expand its other locations around the country (including NYC.)“For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project.”Opponents of the project rejoiced, claiming it as a win for “the little people”. The governor blamed the opponents as self-interested politicians, and the mayor blamed everyone.Most New Yorkers saw it as a major or moderate loss, and blamed both sides.

Amazon did work with politicians, from the governor and the mayor on down. Amazon specifically laid out what it was looking for, and the team from New York City and State (like the teams from 235 other cities) responded with a specific list of what they were offering. Amazon negotiated with the elected officials making the offer (the mayor and the governor and the city and state economic development agencies), and when they all came to an agreement (that made a lot of sense for both Amazon and the City), they accepted New York’s offer and announced their move.The problem was that other local politicians, who had not been part of the negotiations (which for practical reasons could not have included every city council person, state assembly person, state senator, community board member, congressional representative, et al) decided to oppose it.For a few of them it was based on concerns around things like transit congestion, which were addressable.For others, opposition was based on the inevitable Gentrification that would occur, as an area improves, rents rise, more affluent people move in, and it becomes an expensive neighborhood to live in for the less affluent people who are currently there.Still others were outraged at the basic idea of any government offering any incentives to any private businesses for any purposes (a popular position on both the far Left and the far Right.)Finally, many—if not most—of them took what they assumed would be a popular position decrying the fact that “the world’s richest man was getting a private heliport while the subways were being shut down”. While that simply wasn't the case, it made for good press headlines, and everyone’s assumption was that Amazon would feel pressure and cough up more money for local projects controlled by the local politicians.Unfortunately, unlike a local player who would have had no alternative but to succumb to what was effectively blackmail, Amazon had many other choices (although NYC was actually the best for everyone.) So, already stung by the bad press that Amazon was getting because of both its general size and Jeff Bezos’ personal problems, the company simply said, “OK, since the local politicians (and a New York Times editorial) are saying they don’t want us, we simply won’t come. Bye.”Needless to say, that kind of reaction was quite unusual in New York, where local politicians and activists have turned opposition and shakedowns into an art form. So everyone was knocked for a loop as they watched 25,000 to 40,000 high-paying jobs go elsewhere.The recriminations were immediate: the governor blamed the local politicians for killing the biggest economic development project of the decade; the mayor (who is proud of being a Progressive) blamed Amazon for not being willing to be shaken down for more than the City and State had already agreed to; and the local politicians were left with no other option but to loudly declare victory that they had “beaten the man”, and that NYC was better off without 40,000 new jobs paying $150k annually, that would bring an additional $20 billion in taxes to the state and city.Meanwhile, the 70% of New York residents who had welcomed Amazon in with open arms were left sitting around looking at the whole lot of them, and saying “What a cluster*uck!”

No.But what it does mean is that perhaps “herd immunity” will happen quicker than we originally anticipated. That is good news. But we still don’t know 100% about the immunity generated by the infection.If herd immunity is strong, we can open up the economy faster. But we still need to minimize the “peak” of people getting sick to prevent hospitals from getting even more overloaded than they already are.