The state of New York is keeping the incentives it used to woo Amazon under wraps, but even without those benefits, an existing tax program could work in Amazon’s favor — to the tune of almost $1 billion. After a highly publicized search, the tech giant is nearing a deal to locate half of its new headquarters in Long Island City. And as The Real Deal explains, that move means Amazon will qualify for the city’s Relocation and Employment Assistance Program (REAP), which offers employers a $3,000 credit per employee per year for 12 years if they move their business into the outer boroughs and certain parts of Upper Manhattan. With Amazon’s projected workforce of 25,000, that would mean a total credit of $900 million.
The program was designed to encourage outer borough growth and cost the city $32 million in foregone taxes in the last fiscal year, according to the Department of Finance. But Amazon alone will cost the city more than that once hiring begins. The company plans to hire over the course of 10 to 15 years, which could mean a peak of between $60 and $75 million in tax breaks over the course of consecutive 12-year periods. (At the moment, the program is approved through 2020.)
Amazon is facing criticism for forcing cities to compete for its business by offering billions of dollars in tax and other incentives. The pushback from politicians in Queens, in particular, has been vociferous. State senator Michael Gianaris and City Councilman Jimmy Van Bramer made a joint announcement on Sunday denouncing the planned expansion. They are concerned that the company’s move could tax the borough’s infrastructure and that it was planned without community input. “We were not elected to serve as Amazon drones,” Gianaris and Van Bramer said. “It is incumbent upon us to stand up on behalf of the people we represent and that is what we intend to do.” Even Facebook and Google have spoken out against Amazon, noting that their growth in New York City came without any tax incentives.
The tech giant is reportedly looking at the Anable Basin site in Long Island City for its new headquarters, where a proposed rezoning could open up 15 acres to mixed-use development, including 335,000 square feet for industrial spaces, nearly 5,000 housing units, and a new public school. Just a few weeks ago, the city announced that it will invest $180 million “to support sustainable growth” in Long Island City, a move that many now believed was done to tee up the Amazon move.
- Amazon looking at proposed Anable Basin mixed-use site for new home in Long Island City
- City plans to invest $180M in Long Island City infrastructure
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Lead photo: Photo of Long Island City via 6sqft; Photo of cash via Flickr cc
Neighborhoods : Long Island City