New York City to Amazon: Maybe Reconsider?

When Amazon pulled out of its selection of Long Island City as one of two “co-HQ2” sites in the eastern United States, some of the most vocal people in New York (read: the notorious AOC or Alexandria Ocasio-Cortez) treated the withdrawal as an absolute triumph. Amazon spokesperson Jodi Seth described the company's decision to withdraw from the area as based on[1] the “number of state and local politicians [who] have made it clear 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 we and many others envisioned in Long Island City.” AOC, on the other hand, responded triumphantly[2], tweeting, “Today was the day a group of dedicated, everyday New Yorkers and their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world.”

Now, it appears those “everyday New Yorkers” are joining many of their local politicians in the sentiment that reviving the Amazon deal would be a good thing for the city. Since Amazon withdrew the co-HQ2, governor Andrew Cuomo has reportedly been trying to convince Amazon executives to recommit to the Big Apple. Cuomo reportedly connected personally with Amazon CEO Jeff Bezos and may have promised support for the project, should it return[3]. AOC, whose district did not receive the award although it is located in close proximity, has faced harsh criticism from her own constituents and just about everyone else in the wake of the company’s decision to depart.

“This Was a Disgrace”

“This was a disgrace,” said Tracy Maitland, president and CIO of Advent Capital Management, during a panel discussion of the Black Economic Agenda at an Al Sharpton-sponsored event in New York last week. “I partially blame AOC for the loss of Amazon,” Maitland continued. “She doesn’t know what she doesn’t know. That’s scary. We have to make sure she is better educated or vote her out of office.” One issue Maitland and many others have with AOC’s vocal protests against the co-HQ2 is that she portrayed the incentive package, which included a potential $3 billion tax credits contingent on meeting job-creation milestones, as New York City writing a “blank check” to Amazon. She also questioned the validity of giving tax breaks to “corporations that contribute nothing to the pot” in light of a report from the Institute on Taxation and Economic Policy (ITEP) indicating Amazon will pay no federal income taxes despite making $11.2 billion in profit in 2018.

Most New Yorkers in districts affected by the withdrawal now say they think it was “bad for the state” that Amazon reneged on the deal and they would like the deal “revived.” Even in AOC’s district, 54 percent say they would like the deal “revived.” Interestingly, most of AOC’s constituents continue to give her favorable ratings, according to the Sienna Institute, which also conducted the sentiment poll on the Amazon issue[4].

AOC Would “Not Completely Rule Out” a Do-Over

The congresswomen herself does not appear to fully comprehend what Amazon meant when it rescinded its offer. As recently as March, her chief of staff, Saikat Chakrabarti, suggested during an interview on Bloomberg Television she would “not completely rule out Amazon coming back to New York if the process is done with community input.” She added, “Amazon is the company that chose to step away from the negotiating table”[5].

Tell us what you think:

  • Should Amazon offer Long Island City a “do-over?”
  • Was it a triumph or a tragedy the co-HQ2 in Long Island City was scrapped?
  • Do you think Amazon should pay more taxes?

Thank you for reading the Bryan Ellis Investing Letter!

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[1] https://www.6sqft.com/amazon-will-not-move-to-long-island-city/

[2] http://time.com/5530386/aoc-amazon-new-york-hq2/

[3] https://www.foxbusiness.com/economy/cuomo-new-yorkers-amazon-hq2-pleas-too-little-too-late

[4] https://www.foxbusiness.com/economy/new-yorkers-want-amazon-hq2-pullout

[5] https://www.crainsnewyork.com/politics/ocasio-cortez-aide-floats-amazon-path-city-right-process

Discussion

  1. Bob Latham

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