Much of the New York City neighborhood selected by Amazon for one of its new headquarters is in a federal "opportunity zone", a designation created by President Donald Trump's tax overhaul that offers developers potentially millions of dollars in capital gains tax breaks to invest in high-poverty, low-income areas.
Officials in both Virginia and NY sought to point out that the tax benefits for Amazon were tied to job creation, and that they expected government coffers to see a positive return from Amazon's investments.
Matt Curtis, founder of Austin-based consulting firm Smart City Policy Group, says that over the past two months, he'd been led to believe that Austin and Dallas were among the five finalists for the HQ2 project.
But it isn't clear they are good investments, said Jay Shambaugh, director of the Hamilton Project at the Brookings Institution.
Still, on the surface, the deal appears to be better than most.
With more than 230 cities wooing Amazon to build it's next headquarters in their town, you'd think that the residents and local NYC politicians would be thrilled that the the world's largest retailer is coming to Long Island City, NY.
The announcement has roiled many, including Rep. -elect Alexandria Ocasio-Cortez, who is calling the deal an example of corporate cronyism. That consists of cash grants equivalent to $13,500 per job and a tax credit equivalent to $4,500 per job.More news: Here’s What Farah Khan Gifted Newly Weds Deepika & Ranveer
Despite the massive year-long bake-off that preceded this announcement and mundane results, many are wondering if the requests for HQ2 bids weren't a sly ploy to collect data on cities for other purposes.
In a press release, the organization suggested that some of the subsidies going to Amazon have not been disclosed by the company.
GeekWire has a correspondent in Arlington County monitoring local reactions. "Even the biggest subsidies you can imagine really don't sway these kinds of decisions". Grech asked. "How many of them will get the entrepreneurial itch and start up their own company in Queens County?" "I don't know how they calculated it, and what they actually calculated", Cuomo said. HQ2 is primed to make a major impact on local infrastructure as well as the housing market in Crystal City and the surrounding areas.
On a per-job basis, the packages offered to Amazon are smaller than some previous megadeals.
"It's really a no-brainer", Fuller said. "They'll have to find a place to live, which means they'll be paying property taxes, (and) they'll be buying things, hopefully not just to Amazon, so they'll pay being sales taxes".
The company said the new jobs will come with salaries that average $150,000 a year. "Most businesses today have evolved over the last 15 to 20 years to be more compassionate capitalists. It isn't as overwhelming as people think it's going to be".
A Fitch Ratings analysis notes that 25,000 Amazon jobs would amount to less than 1 percent of the labor force in either New York's or DC's metropolitan statistical area. The inflow of those workers could burden schools and transportation systems. Two sellers have just pulled listings from the market, he said, so the homes could be re-listed next year, presumably at higher prices, after the market adjusts to Amazon's arrival. Roughly one-third of residents in Washington, D.C., and 40 percent in NY pay more than 30 percent of their income on housing, the groups, which include LeRoy's Good Jobs First, pointed out.
But Long Island City also has been straining to handle its growth. The auto factories that once filled the Midwest have migrated to the South, where labor unions have held less sway. In conjunction with the Amazon expansion, Crystal City is being rebranded as National Landing.