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Comment by ciamac | Hacker News Reader

NYC resident here. If Amazon wants to come to NYC, great, but why do they need corporate welfare including $500M in cash? We do not need them here, and they should pay full freight like everyone else (including Google, which is buying whole city blocks without second thought and with no handouts). This is a terrible back room deal and crony capitalism.

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The commentary on this kills me.

This isn't some check to Bezos. This is a rebate off their tax bill. These are taxes that you will not get unless the business moves to New York.

Taxes incentives are incredibly common, so common that the deals that NY offered Amazon work within existing programs like Excelsior.

Finally, it's not a backroom deal. Part of Amazon's competition was for each city to sign an NDA in the process so cities can't see the bids of other cities. This would have created a bidding war that, surprisingly, Amazon didn't want.

> Finally, it's not a backroom deal. Part of Amazon's competition was for each city to sign an NDA in the process so cities can't see the bids of other cities.

Who benefits from this information asymmetry?

It meant that there wasn't an escalating bidding war between cities. So in this case, the taxpayer.

That's not necesarily true. The NDA means that Amazon has more information than the cities as was pointed out, so the cities are absolutely at a disadvantage. There's really no circumstance where information asymmetry is a positive thing, since the party with more information could always potentially exploit it. At best, you are no worse off than under information symmetry.

The NDA would have easily allowed Amazon to give the impression that other cities are offering more than they actually are willing to offer. This could have driven up bidding even more than if it were in the open.

You also have to think about incentives here. Why would Amazon want an NDA if it wasn't for their benefit? Are they just trying to avoid bidding wars out of the goodness of their heard?

> The NDA would have easily allowed Amazon to give the impression that other cities are offering more than they actually are willing to offer.

That's a good point.

My impression was that Amazon wanted to avoid a bidding war because of bad press.

>The NDA would have easily allowed Amazon to give the impression that other cities are offering more than they actually are willing to offer. This could have driven up bidding even more than if it were in the open.

Have you ever actually participated in an RFP? Its not a two way conversation. Basically (A) gives a list of requirements and then (B) and (C) submit their "bids" to (A). (A) reviews the bids and picks one.

And yes the NDA does benefit Amazon, just like any business benefits from RFP. But non-blind bidding would benefit them a lot more if their desire was to maximize incentives offered.

Blind Example: (A) sends out a RFP for a service. (B) Bids to do the service for $5,000. (C) Bids to do the service for $6,000. Neither (B) or (C) know each others bids so they bid the lowest they can and still turn a profit.

Non-Blind Example: (A) sends out a RFP for a service. (B) Bids to do the service for $5,000. (C) Bids to do the service for $4,000 since they can see what (B) bid. (B) then bids $3,000. Both (B) and (C) are in a worse position than if they couldn't see each others bids.

Having more information isn't always helpful. Looks at what happened when regulation made CEO compensation in publicly traded companies public knowledge. CEO compensation rose exponentially.

$500M is literally a check to Bezos.

And it is a backroom deal in that there was no competitive process to redevelop LIC, which would allow other companies and developers to compete with Amazon, as well as no input from city residents and those affected. The NDA is for Amazon's benefit and was clearly done at Amazon's behest.

> Taxes incentives are incredibly common

Yes, because our society is corrupt by design.

> This isn't some check to Bezos. This is a rebate off their tax bill. These are taxes that you will not get unless the business moves to New York.

At which point he gets to earn an extra 3 billion that should be going to the state.

> Finally, it's not a backroom deal. Part of Amazon's competition was for each city to sign an NDA in the process so cities can't see the bids of other cities. This would have created a bidding war that, surprisingly, Amazon didn't want.

That's a backroom deal. Giving it a (flimsy) reason for being a backroom deal doesn't change the way it was done.

So, it's a backroom deal. Opacity in this process benefits Amazon and hurts the cities, so people got pissed off and rejected it. This isn't hard to understand.

> they should pay full freight like everyone else

"Everyone else" would have received the same breaks for that location and scale of project (less the $500MM you already mentioned).

> including Google, which is buying whole city blocks without second thought and with no handouts

Is there evidence for this, or is it just speculation based on silence (because Google is smart enough to keep their mouth shut and not start patronizing national dog-and-pony shows)?

> "Everyone else" would have received the same breaks for that location and scale of project (less the $500MM you already mentioned).

Amazon left the impression with their year long spectacle they were getting a special deal. They really have nobody to blame but themselves.

Both that and Amazon not actually needing any assistance do not excuse the constant misinformation being repeated about this situation.

It would be public information if they did receive any tax incentives. As far as I understand, Google, Facebook, and Amazon's already existing 5,000 NYC jobs have been achieved the good old fashioned way, sans bribery.

> It would be public information if they did receive any tax incentives.

Sure, if you dig for it. New York is notorious for burying records under obscure bureaucracy.

> As far as I understand, Google, Facebook, and Amazon's already existing 5,000 NYC jobs have been achieved the good old fashioned way, sans bribery.

Just because a reporter hasn't decided to go digging for evidence (and succeeded) doesn't mean these companies didn't get breaks and subsidies. There are programs that cover certain areas of Lower Manhattan, though generally south of 96th St. there are not many city incentives. The state incentives that Amazon qualified for in LIC they certainly already qualify for, at least in part, as do Facebook and Google.

We can't prove a negative. If you want to convince us that Google and Facebook were motivated to hire in NYC because of tax incentives, provide some evidence. Otherwise, I don't think it's a compelling point.

Google has a history of using shell companies to hide its tax breaks.

>""Everyone else" would have received the same breaks for that location and scale of project (less the $500MM you already mentioned)."

And this 500 million dollars is kind of a really big deal. To the average NYC resident who has watched their transit system languish in a perpetual state crisis and disrepair this is 500 million dollars in "real" tax dollars woefully misspent.

First, the MTA has plenty of money. They need to stop wasting it.

Second, the $500MM was coming from the state. It would not, and will never, see the coffers of the MTA.

Third, if $500MM is such a big deal then the $2.5B in non-special incentives are a much bigger deal, and are getting completely lost in the misinformation that the entire $3B was a special deal for Amazon and that they would have got $0 without the dog-and-pony show.

>"First, the MTA has plenty of money. They need to stop wasting it."

No they don't. Albany has repeatedly diverted tax revenues earmarked for the subways. This goes all the way back to Governor Pataki. State then forced them the agency to borrow and spend obscene sum on debt servicing. This is well-known and has been well-discussed.[1] The state currently contributes well over 500 million to the MTA.[2] So clearly money from the state does "see the coffers of the MTA."

For 2019 the MTA has deficits of just over 500 million dollars. This information is public and readily available.[3] It's worth noting this is the same amount the state was going to give to Amazon via a grant.

Despite whatever waste and inefficiencies at the MTA it most certainly does not have anywhere near the 19 billion dollars needed for Andy Byford's Fast Forward plan.[4]

>"Second, the $500MM was coming from the state. It would not, and will never, see the coffers of the MTA."

Wrong. The MTA already receives direct financial contributions from NY State via its' Metropolitan Mass Transportation Operating Assistance Fund.[5] This is not new either.

The actual facts refute your assertions.

[1] https://www.nytimes.com/2017/11/18/nyregion/new-york-subway-...

[2] http://web.mta.info/mta/news/books/docs/MTA-2019-Adopted-Bud...

[3] http://interactive.nydailynews.com/project/mta-funding/#subs...

[4] https://ny.curbed.com/2018/5/23/17383870/nyc-subway-mta-over...

[5] https://www.budget.ny.gov/pubs/archive/fy18archive/exec/agen...

Google in NYC shares a building with the FBI, shares the other one across the street with Internap (and is part of a fiber loop out to all of the big datacenters in New Jersey) and the entire building across the street from the first one belongs to the DEA.

I'm sure that the government chose Google as an occupant for those buildings just as much as Google's money did.

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