Amazon's $3B Deal: What It Means For NYC

NEW YORK — Amazon will get nearly $3 billion in tax breaks and other incentives to open one of its new headquarters in Long Island City. The neighborhood will also get some benefits out of the deal, such as infrastructure investments and a new school — though some skeptics worry Amazon will further strain the area's already exploding population.

Officials are calling Amazon's project the biggest economic development initiative in city and state history, as it is expected to create at least 25,000 high-paying jobs and generate $27.5 billion in tax revenue for the city and state over 25 years.

Here's a look at what Amazon and Long Island City each stand to get out of the deal.

Big Tax Breaks For Amazon

Amazon will be eligible for up to $1.2 billion in state tax credits for its planned complex on a swath of public and private land along the East River, according to a joint memorandum of understanding between Amazon, the city, its Economic Development Corporation and Empire State Development, a state agency.

The firm can also claim up to $505 million in grants to subsidize construction of the massive $3.6 billion project, which will eventually comprise at least 4 million square feet, the memo says.

While New York City has not offered Amazon any direct subsidies, the company also plans to take advantage of two city tax breaks that will further sweeten the deal by nearly $1.3 billion.

One is the Relocation and Employment Assistance Program, which offers businesses moving to certain parts of the city a tax credit of up to $3,000 per employee for 12 years. The program will benefit Amazon to the tune of $897 million, Gov. Andrew Cuomo said.

The other is the Industrial & Commercial Abatement Program, which provides property tax abatements. It will be worth nearly $400 million to Amazon, Cuomo said.

New York's package is much more generous than the $573 million in incentives Amazon said it is getting for its other new location in the Washington, D.C. suburb of Arlington, Virginia. City and state officials defended the deal, with Cuomo saying the benefits would give New York a nine-to-one return on its investment.

"This is a big money-maker for us," Cuomo said. "Costs us nothing, nada, niente, goose egg. We make money doing this. And to get Amazon here, did we have to win the competition? Yes, we had to win the competition."

The memorandum also includes one non-monetary perk for Amazon: help in securing a helipad either on its development site or nearby. (The company would have to pay for any new construction itself.)

LIC's Benefits: Green Space, Job Training, Cash For Infrastructure

The Amazon deal holds a slew of community benefits for Long Island City, including efforts to help New Yorkers snap up some of the jobs the company is supposed to create.

Amazon will make payments in lieu of taxes stemming from the project, about $600 million of which will go to a dedicated fund for infrastructure improvements in the surrounding area, said Deputy Mayor Alicia Glen. How that money is spent will be determined in consultation with the local community, according to Mayor Bill de Blasio's office.

Amazon's project will leave room for a variety of facilities and amenities, some of which will be publicly accessible. Among them are:

• A new 600-seat public school.
• A 3.5-acre waterfront esplanade and park.
• About 25,000 zoning square feet set aside for a "community facility use/artist workspace."
• About 10,000 zoning square feet of space for an art and tech accelerator.
• More than 263,000 zoning square feet of light manufacturing space.
• About 10,000 zoning square feet of workforce development and training space.

The state, city and Amazon are committing $5 million each to establish technology training and recruitment programs that will target underrepresented groups such as residents of public housing, the memo says. Those efforts could include internships for high school students and programs with city and state colleges, according to the memo.

Amazon’s campus will be located just about half a mile from the Queensbridge Houses, the nation’s largest public housing development. The deal provides for a relationship between the massive company and the complex — starting in 2020, Amazon will host semi-annual events such as job fairs or resume workshops at Queensbridge for at least the first three years of the project, the memo says.

While Amazon's announcement is "exciting in its potential to create jobs for people who live in the Long Island City area, we also need to work closely together to ensure that residents in Queensbridge Houses will be guaranteed 100% access to these jobs and educational training in workforce development programs that will open the door to thousands of future jobs this partnership with Amazon will create," April Simpson, president of the Queensbridge Tenants Association, said in a statement.

Despite these goodies, some critics of Amazon's plan say the city has more pressing problems, such as its crumbling subways and public housing, that aren't helped by giving the company such huge tax breaks.

"Public resources should be invested in local communities and in public assets, not in a massive corporation like Amazon that will do more harm than good," Jonathan Westin, the executive director of the advocacy group New York Communities for Change, said in a statement. "Amazon will accelerate gentrification and lead to rising rents and the loss of small businesses."

(Lead image: A warehouse is seen in Long Island City with the Manhattan skyline in the background in November, 2018. Photo by Mark Lennihan/Associated Press)