AMZN - Amazon.com Inc.

[rkbabang]

The funny thing is: AMZN/GOOGL already have a lot of workers in NYC and will keep adding even without the whole 2nd headquarters hoopla. So, no, NYC is not killing itself like a lot of people claim.

 

No one is saying NYC is killing itself. You can't kill NYC by keeping one company out (and as you said Amazon already employs people in the city), but NYC would have benefited from the HQ2 being there. The opponents were making it out to be a complete negative and treating this outcome as some kind of victory. Sure it isn't the end of the world, but a victory it isn't.

[Dalal.Holdings]

The funny thing is: AMZN/GOOGL already have a lot of workers in NYC and will keep adding even without the whole 2nd headquarters hoopla. So, no, NYC is not killing itself like a lot of people claim.

 

No one is saying NYC is killing itself. You can't kill NYC by keeping one company out (and as you said Amazon already employs people in the city), but NYC would have benefited from the HQ2 being there. The opponents were making it out to be a complete negative and treating this outcome as some kind of victory. Sure it isn't the end of the world, but a victory it isn't.

 

It's a victory for those who don't want government favoring large, established businesses with backroom deals. It's a victory for NYC residents who would suffer if JPM and all other co's based in NYC suddenly decided they wanted the same tax break deal as Amazon (as Dimon said he would). No one is "keeping one company out". Amazon is and always has been free to build HQ2 in NYC. They can just go about doing so the same way any business, large or small, would.

 

Corporations have bilked America too far, and on top of cutting corporate taxes to the bone just recently with exploding deficits and crumbling infrastructure. Now they want sweetheart deals? The richest person on the planet and one of the most valuable companies in the world should be able to afford to build an HQ in NYC just like the thousands of lesser companies based there. If they are unwilling, too bad. No one in NYC will miss them. No more giveaways to corporations.

[DTEJD1997]

The funny thing is: AMZN/GOOGL already have a lot of workers in NYC and will keep adding even without the whole 2nd headquarters hoopla. So, no, NYC is not killing itself like a lot of people claim.

 

No one is saying NYC is killing itself. You can't kill NYC by keeping one company out (and as you said Amazon already employs people in the city), but NYC would have benefited from the HQ2 being there. The opponents were making it out to be a complete negative and treating this outcome as some kind of victory. Sure it isn't the end of the world, but a victory it isn't.

 

It's a victory for those who don't want government favoring large, established businesses with backroom deals. It's a victory for NYC residents who would suffer if JPM and all other co's based in NYC suddenly decided they wanted the same tax break deal as Amazon (as Dimon said he would). No one is "keeping one company out". Amazon is and always has been free to build HQ2 in NYC. They can just go about doing so the same way any business, large or small, would.

 

Corporations have bilked America too far, and on top of cutting corporate taxes to the bone just recently with exploding deficits and crumbling infrastructure. Now they want sweetheart deals? The richest person on the planet and one of the most valuable companies in the world should be able to afford to build an HQ in NYC just like the thousands of lesser companies based there. If they are unwilling, too bad. No one in NYC will miss them. No more giveaways to corporations.

 

We don't often agree, but I've got to concur here.

 

Why should AMZN get ANY special help from the government?  If I were "big man in charge" the only special help that I would give to companies looking to move in would be with filling out appropriate forms, getting utilities & such run into their property, and showing/offering places in my district that are available for development.

 

NO CRAZY TAX DEALS!

 

Why is AMZN a more betterer business than JPM?  Why are they better than anybody else?  What about all the small & medium businesses that PAY plenty in taxes that are going to subsidize AMZN who is going to do their best to put those smaller businesses OUT OF BUSINESS?

 

I could even argue that there is a constitutional problem with that.  Not everybody is getting equal protection/treatment from the government.

[Spekulatius]

The US is kind of unique in the way that a new customer will always get a better deal than an existing customer (everyone who dealt with wireless/cable companies knows this) and likewise, a company that will move will get a better deal than companies that are already there. I guess it is the concept of customer acquisition cost and expecting inertia from existing customers or companies.

 

I have seen likewise in Europe as well, but not as pronounced than in the US.

[Dalal.Holdings]

*1) New customer bonus only eligible for large, public corporations. Small/medium sized businesses need not apply. 2) Current customers, if threatening to change providers (cities), may be eligible to negotiate as long as #1 applies.

 

These deals and their announcements remind me of large M&A deals. The benefits (“synergies”) are always touted and emphasized, the downsides brushed aside. And the dealmakers rarely stick around long enough for the good things to happen. I always approach such proclamations with a huge dose of skepticism.

[Liberty]

Why should Walmart or Costco get a better deal from its suppliers when they buy a billion dollar worth of some widget over some other customer who buys a million worth?

 

Maybe because to the supplier, it's the absolute dollar amount that matters most, not the percentages.

 

Maybe NYC would rather have had 25,000 jobs at 95% of its usual tax take (plus all the tax it would get at 100% take on all the second and third order jobs) than 0 jobs at 100% tax take.

[Dalal.Holdings]

We’re not disputing the benefits of scale here. What’s up for discussion is government favoritism of large corporations which will always occur to some degree (ie. Lobbying). However, in a democracy, citizens, esp taxpayers should have a say, no? Free market libertarian types should be against such deals, no?

 

The people of NYC spoke and, amusingly, many “free market”, “don’t want government interfering with business” types mocked NYC for rejecting a deal that was essentially government favoritism for a large corporation (as it fits the anti-AOC/anti-left talking points). Only in America are all politics neatly divided into two parties...

 

Maybe NYC would rather have had 25,000 jobs at 95% of its usual tax take (plus all the tax it would get at 100% take on all the second and third order jobs) than 0 jobs at 100% tax take.

 

And again, only looking at the obvious benefits of the deal while ignoring the hidden (but very real) downsides.

[Liberty]

We’re not disputing the benefits of scale here. What’s up for discussion is government favoritism of large corporations which will always occur to some degree (ie. Lobbying). However, in a democracy, citizens, esp taxpayers should have a say, no? Free market libertarian types should be against such deals, no?

 

The people of NYC spoke and, amusingly, many “free market”, “don’t want government interfering with business” types mocked NYC for rejecting a deal that was essentially government favoritism for a large corporation (as it fits the anti-AOC/anti-left talking points). Only in America are all politics neatly divided into two parties...

 

Favoritism? NYC wasn't doing that out of the goodness of its heart. It was doing it because it saw a benefit for itself. Cities are competing against each other to attract capital and jobs, as they always do. You can compete on various basis... Lower tax, or if you have higher tax, more tax breaks (it's what the US did vs other countries before the corporate tax rate went down), nicer weather, better schools, better night life, better infrastructure, less corruption, better housing, etc. None of those things are fair either, some cities have more of one and less of the other, many are historical accidents or things that nobody can change.

 

As for "the people have spoken", what I saw was that a majority of locals were in favor of the deal, and most elected politicians too (since they offered the deal in the first place). It's a minority of people who killed the deal, which is kind of undemocratic, and seemed more about scoring points in politics than any rational cost-analysis case.

[Dalal.Holdings]

What is the precise, “rational cost analysis” if JPM (with hundreds of thousands, not measly 25k employees in NYC) and the others who employ millions collectively want the same deal? What was the cost analysis of Foxconn deal for WI until the terms kept changing (favorably for Foxconn)?

 

If you really believe in such analyses for these things, I’m an investment bank and I have a large M&A deal to sell you.

 

Also, NYC doesn’t need to compete with most other places bc it’s NYC. It’s doing well even with higher taxes and real estate prices than most other places.

[Liberty]

What is the precise, “rational cost analysis” if JPM (with hundreds of thousands, not measly 25k employees in NYC) and the others who employ millions collectively want the same deal? What was the cost analysis of Foxconn deal for WI until the terms kept changing (favorably for Foxconn)?

 

If you really believe in such analyses for these things, I’m an investment bank and I have a large M&A deal to sell you.

 

Also, NYC doesn’t need to compete with most other places bc it’s NYC. It’s doing well even with higher taxes and real estate prices than most other places.

 

You are distorting what I said and tearing down strawmen, as well as ignoring most of what I said. I have no interest in playing this game with you.

 

And if you don't think the financial industry hasn't already been given a sweet deal by the city....

[dwy000]

All things being equal NYC should not have to pay for companies to come. But all things are not equal.  If others are willing to offer $bns of incentives the natural advantages dissipate. Apparently the either states offered up to $7-8bn of incentives. NYC by offering only $3bn shows that advantage right there. But if you offer zero you are out of the game.  NYC isnt offering things because they're so friendly and sweet. They know they need to do it to stay competitive.

 

The JPM thing is not a relevant comparison

[Liberty]

Video of Jeff Bezos presentation at Startup School 2008:

 

[rkbabang]

We’re not disputing the benefits of scale here. What’s up for discussion is government favoritism of large corporations which will always occur to some degree (ie. Lobbying). However, in a democracy, citizens, esp taxpayers should have a say, no? Free market libertarian types should be against such deals, no?

 

I am for anything that saves anyone from paying taxes.  I'm for anything that reduces the amount in taxes that any government collects.  I don't mind that churches pay no taxes, because everyone should pay no taxes.  I don't mind that Amazon was going to pay a reduced amount of taxes in NYC, because everyone should pay a reduced amount of taxes in NYC.  Everyone being equal isn't good if that means that everyone is being equally fleeced.  Would you rather live in a city where every man gets pick-pocketed every time they go out, or one where just some people do?  A city where every woman gets her purse stolen every time she goes out, or just some women do?  Equality isn't always better.

 

If you can't eliminate theft entirely then reducing it is the next best thing.

 

 

[HJ]

1) NYC has higher local tax rate than anywhere else.  It is how it choses to run itself.  2) As part of how it choses to run itself, NYC also consistently give tax breaks to big businesses to stay in the city.  Firms like Goldman Sachs, JPM, even iconic entities like NYSE have received plenty of tax breaks over the years to keep jobs in Manhattan rather than move across the river to New Jersey or CT.  3) Local small businesses, who by and large are full tax payers, support giving such tax breaks to these firms. 

 

Governing is complicated, and shouldn't be driven by ideology.  The practical decision in this instance is for all to see.  Too bad for Long Island City.  But we all get the government we deserve. 

 

[DTEJD1997]

1) NYC has higher local tax rate than anywhere else.  It is how it choses to run itself.  2) As part of how it choses to run itself, NYC also consistently give tax breaks to big businesses to stay in the city.  Firms like Goldman Sachs, JPM, even iconic entities like NYSE have received plenty of tax breaks over the years to keep jobs in Manhattan rather than move across the river to New Jersey or CT.  3) Local small businesses, who by and large are full tax payers, support giving such tax breaks to these firms. 

 

Governing is complicated, and shouldn't be driven by ideology.  The practical decision in this instance is for all to see.  Too bad for Long Island City.  But we all get the government we deserve.

 

The NYSE is not competing against local "Mom & Pop" operators or even medium sized operators.  AMZN is aggressively competing against such to put them out of business. 

 

Perhaps the same thing can be said of the investment banking houses?  I don't know of too many Ma & Pa investment bankers.

 

Here in Detroit, our politicians were wooing AMZN.  I made sure I let them know that I had a BIG problem full rate on my taxes, while a competitor of mine was going to get a big break...

 

[Spekulatius]

Isn’t it possible that AMZN pulled back from LIC for reasons that have little to do with local oppositions? Second thoughts maybe that they don’t need a 2nd split headquarter (whatever that might be). Have they mentioned a replacement for the LIC headquarters or another location for the 25k to be created jobs? All of a sudden, this is no longer needed and doesn’t even need a backup plan?

[Liberty]

Estimates of Amazon ad growth for 2019:

 

https://www.emarketer.com/content/us-digital-ad-spending-will-surpass-traditional-in-2019

 

The big winner this year will be No. 3 player Amazon, which continues to take share from just about everyone. Its US ad business will grow more than 50% this year and its share of the US digital ad market will swell to 8.8% this year.

[walkie518]

Galloway w/a lot of AMZN commentary:

[Guest cherzeca]

NYS budget director on amazon/nyc fiasco:  https://www.governor.ny.gov/news/open-letter-new-york-state-budget-director-robert-mujica-regarding-amazon

[Liberty]

NYS budget director on amazon/nyc fiasco:  https://www.governor.ny.gov/news/open-letter-new-york-state-budget-director-robert-mujica-regarding-amazon

 

Worth reading.

 

Incredibly, I have heard city and state elected officials who were opponents of the project claim that Amazon was getting $3 billion in government subsidies that could have been better spent on housing or transportation. This is either a blatant untruth or fundamental ignorance of basic math by a group of elected officials. The city and state 'gave' Amazon nothing. Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits - a program approved by the same legislators railing against it - would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner. ...

 

Make no mistake, at the end of the day we lost $27 billion, 25,000-40,000 jobs and a blow to our reputation of being 'open for business.' The union that opposed the project gained nothing and cost other union members 11,000 good, high-paying jobs. The local politicians that catered to the hyper-political opposition hurt their own government colleagues and the economic interest of every constituent in their district. The true local residents who actually supported the project and its benefits for their community are badly hurt. Nothing was gained and much was lost. This should never happen again."

 

much of the visible 'local' opposition, which was happy to appear at press conferences and protest at City Council hearings during work hours, were actual organizers paid by one union: RWDSU. (If you are wondering if that is even legal, probably not).

[Liberty]

https://www.bloomberg.com/news/articles/2019-02-25/new-amazon-bias-charge-likely-to-delay-pentagon-s-cloud-contract

 

Oracle’s lawsuit alleges that Ubhi helped design the contract to favor Amazon while negotiating to sell his company to the e-commerce giant. [...]

 

Ubhi, who had worked at Amazon before joining the government -- and rejoined the online retailer once he left the Pentagon -- did disclose some Amazon contacts to his Pentagon superiors. As a result, Ubhi had to recuse himself from working on the agency’s cloud-computing procurement.

 

A Pentagon contracting officer determined in July that Ubhi’s potential conflicts didn’t compromise the integrity of the procurement, according to the government’s filing.

[Liberty]

https://www.cnbc.com/2019/02/27/amazon-tapped-nader-kabbani-to-run-its-phamacy-business.html

[rkbabang]

Amazon backs out of massive Seattle office tower as questions swirl about growth plans

https://www.geekwire.com/2019/amazon-backs-massive-seattle-office-tower-questions-swirl-growth-plans/

 

"Amazon has placed a high-profile Seattle office project on the sublease market, signaling plans to scale down its growth in its hometown.

 

A marketing flier obtained by GeekWire confirms that the tech giant is seeking new tenants for its office space in Rainier Square, a building under construction that will one day be the city’s second-tallest skyscraper. Amazon had leased all 30 floors of office space in the building. After weeks of rumors, the listing was made official over the weekend, according to real estate brokers familiar with the marketing efforts. Amazon will make all of the office space it leased in Rainier Square available to other companies.

 

The skyscraper project, once an emblem of Amazon’s ambitions in Seattle’s urban core, now becomes a symbol of its uncertain future in its hometown. The move follows Amazon’s decision to back out of its HQ2 project in New York City after opposition there, amid signs that the company will focus its Seattle-area growth in nearby Bellevue, Wash."

[Spekulatius]

Isn’t it strange that AMZN backs out of Long Island City and Seattle at the same time? Maybe they don’t need all that office space and overestimated their near term demands.

[Liberty]

Isn’t it strange that AMZN backs out of Long Island City and Seattle at the same time? Maybe they don’t need all that office space and overestimated their near term demands.

 

Or they're just juggling things around because the HQ2 process gave them a ton of good data on other places where it might be better to grow rather than Seattle.