Mayor Announces Long Island City Chosen to House New Amazon Headquarters

The project will bring tens of thousands of new jobs, billions in tax revenue, and investment in infrastructure, City says. On November 13, 2018, Mayor Bill de Blasio and Governor Andrew M. Cuomo announced that Amazon has selected Long Island City, Queens for one of its two new corporate headquarters. The City has been steadily increasing investment into Long Island City, with more than $2.4 billion of planned infrastructure investments and a recently announced $180 million investment for new schools, open space, and transportation. Long Island City is located across the East River from Midtown Manhattan and the Upper East Side, at the western tip of Queens.

The addition of Amazon’s headquarters to Long Island City is expected to bring at least 25,000 jobs by 2029 and up to 40,000 by 2034, with salaries averaging $150,000 a year. The project is also expected to bring an average of 1,300 construction jobs annually through 2033. Over the initial 25 years, the project is estimated to generate over $186 billion in Gross State Product, as well as a total of $14 billion in new tax revenue for the State, and $13.5 billion for the City. Overall, the project is estimated to create more than 107,000 direct and indirect jobs.

The win over the other 230 metropolitan areas was the result of a collaboration between New York State and City economic development officials, who submitted a proposal highlighting New York’s unmatched talent, academic institutions, public schools, and workforce training programs. These attributes make the City well-equipped to respond to Amazon’s rapid growth.

Amazon is set to occupy up to 500,000 square-feet of space at One Court Square starting in 2019. Amazon also plans to construct an additional four million square-feet of commercial space on Long Island City’s waterfront over the next ten years, with the possibility of expanding up to eight million square-feet over the next 15 years.

As part of this process, an agreement between the City, State, and Amazon has been entered into which has several key components.

First, the parties agreed to build a jointly-funded 10,000 square foot onsite employment center to connect local residents with jobs and training. With a $15 million investment, the agreement calls for the expansion of the JobsPlus program to Queensbridge Houses and tuition-free tech training to its residents, roughly 1,800 residents over the next 10 years.

Second, the agreement secures a new, approximately 600-seat intermediate public school, a 3.5 acre waterfront esplanade and park, and the establishment of a Long Island City Infrastructure Fund through which 50 percent of the project’s PILOT proceeds will go to transportation and other neighborhood priorities as they are identified in collaboration with the local community.

Third, Amazon has received a performance-based incentive package from the State totaling $1.795 billion, which includes a $1.2 billion in tax credits through the Excelsior Jobs Program. These tax credits will be directly tied to Amazon’s commitment to creating 25,000 new jobs and no less than $2.3 billion of investments over 10 years. The State also offered a $505 million capital grant that is directly tied to Amazon’s commitment to invest $3.6 billion and create up to 40,000 new jobs over 15 years.

Fourth, the City, State, and Amazon will commit $5 million each to the creation of workforce development programs focused on technology training and recruitment that is specific to New York City and targeted towards underrepresented segments of the workforce. The development programs may include community-based accelerated technology training programs, internships, and work-based learning opportunities for high school students.

Amazon, along with the State, City, and local community will collaborate in conducting an environmental review and developing a General Project Plan. State, City, and local elected officials will also form a Community Advisory Committee for the project.

In return for constructing its new headquarters and introducing new jobs to Long Island City, Amazon will be eligible for a partial tax abatement through the Industrial and Commercial Abatement Program which is expected to total $386 million, as well as an annual credit of $3,000 per eligible employee under the Relocation and Employment Assistance Program, for 12 years, expected to total $897 million through 2038.

The addition of Amazon’s headquarters is a big mark on the company’s existing presence throughout the five boroughs. The company has corporate offices, distribution and fulfillment centers in Staten Island, a retail space in SoHo, leased a 360,000 square-foot office in Manhattan this year, and recently purchased an 83,000 square-foot building in Woodside to serve as a second fulfillment center.

Despite having strong support from many City officials, there are some who have spoken out against the Amazon deal, including State Senator Michael Gianaris and Council Member Jimmy Van Bramer. In a joint statement, the officials stated that “offering massive corporate welfare from scarce public resources to one of the wealthiest corporations in the world at a time of great need in our state is just wrong. We cannot support a giveaway of this magnitude, a process that circumvents community review through the use of a General Project Plan or the inevitable stress on the infrastructure of a community already stretched to its limits.”

Mayor Bill de Blasio is amongst the supporters of the project stating, “This is a giant step on our path to building an economy in New York City that leaves no one behind. New Yorkers will get tens of thousands of new, good-paying jobs, and Amazon will get the best talent in the world. We’re going to use this opportunity to open up good careers in tech to… people looking for their foothold in the new economy, including those in City colleges and public housing. The City and State are working closely together to make sure Amazon’s expansion is planned smartly, and to ensure this fast growing neighborhood has the transportation, schools, and infrastructure it needs.”

Governor Andrew M. Cuomo also expressed his support stating, “When I took office, I said we would build a new New York State – one that is fiscally responsible and fosters a business climate that is attractive to growing companies and the industries of tomorrow. We’ve delivered on those promises and more, and today, with Amazon committing to expand its headquarters in Long Island City, New York can proudly say that we have attracted one of the largest, most competitive economic development investments in U.S. history.”

U.S. Senator Charles E. Schumer stated, “The number one thing we can do for New Yorkers at every rung of the economic ladder is create jobs, and the number one way to do that is to bring companies like Amazon to New York… We must make sure there are commensurate infrastructure and housing improvements to the neighborhoods to which Amazon is moving, and make sure community residents are hired when Amazon lands.”

Queens Borough President Melinda Katz stated, “Long Island City – New York’s emerging tech hub – is ‘primed’ for Amazon. Amazon is a timely fit for the borough, given the Tech Plan we commissioned years ago funded by Governor Cuomo to create the City’s leading tech ecosystem, coupled with Mayor de Blasio’s $180 million in new investments for infrastructure improvements…for schools, transportation, and open space…Queens offers a dynamic mixed-use community where workers can live, ideas can synergize, and businesses can flourish. New companies should take note, however, that New York is a union town. I have full faith that the City and State will be able to resolve all outstanding issues including organized labor, infrastructure and capacity concerns.”

 

By: Viktoriya Gray (Viktoriya is the CityLaw Fellow and New York Law School Graduate, Class of 2018).