Just a few minutes ago, Amazon announced that they were telling the local politicians around NYC to take a flying leap. Actually, that is not what they said exactly but nevertheless, Amazon announced that :
“For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. A number of state & local politicians have made it clear that 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.”
In case you did not know, Amazon:
Would bring 25,000 high paying jobs which could be as many as 40,000.
Invest more than $2.5 billion.
Construct 4 million square feet of space which could rise to 8 million square feet.
Officials expected the online retailer to generate $27.5 billion in revenue for the city and state over the next 25 years, with the city hoping to net roughly $13.5 billion. This according to the mayor and the governor said yesterday. A separate study commissioned by the state predicted that Amazon would generate $186 billion for the state economy over the next 25 years.
The complaint from politicians was that they were giving the company too much in subsidies to make the move. The same politicians that inefficiently and ineffectively deployed money to boondoggles have a magnificent opportunity put in their hands and what do they do? The usual.
This past Monday, one of those politicians appeared on Fox Business Network’s (if your cable company does not have it, demand it) Bulls and Bears show hosted by the brilliant David Asman. As a guest, I got to ask the man a question. I went last. After listening to him call Amazon an extortionist, I was taken aback. I asked the gentleman if he realized he was accusing Amazon and Jeff Bezos was committing a felony. I then asked if he was worried about missing on a magnificent opportunity. He could care less.
This is what the gentleman and the rest that opposed Amazon do not understand. It is not just the hard dollars but what those hard dollars would do…and for the long term. Imagine:
Amazon moves in. 25,000-40,000 people earning 6 figures moving into your area. Because of this, construction starts. Because construction starts, those jobs are created. Because construction starts, materials need to be bought. Because of this, companies that supply all those materials are doing more business…which increases their profits and potentially they hire more people. Because of this construction, new roads, new access, sewers and infrastructure start up. You remember how important infrastructure is? Because of all this, even more jobs are created. All those jobs created increase the customer base. Because of the increased customer base, retail and restaurants do better. Because they are doing better, maybe they expand, creating even more jobs. Those new jobs at retail and restaurants also expand the customer base. As more and more companies see how well those retail and restaurants are doing, they now decide to open up in Long Island City. Because they open in Long Island City, they now have to hire more and more people. On and on and on. But we are not done.
Because so many more people and businesses see the success of Amazon and the success of all these businesses opening up, Long Island City becomes a magnet for even more businesses. Doctors, dentists, accountants, real estate brokers, stock brokers, emergency clinics, gyms, spas, flower shops, gas stations, proctologists (that’s for the politicians) and dozens of more professions start opening up to serve the tens of thousands of people flocking to Long Island City. Because all these places open up and so many families move there, new schools, nurseries, churches, synagogues, day care and everything under the sun have to be built. Because all those new places need to hire new people, once again the customer base expands creating a virtuous cycle…all because of what Amazon started.
But no! Even though a good part of Amazon’s deal was performance based, screw you Bezos. Even though a gargantuan long term opportunity for Long Island City was at hand, screw you Jeff Bezos. Even though the longer term tax base would expand (and we know how much NYC politicians love a new tax base), screw you Jeff Bezos. But it now ends up the other way around. Jeff Bezos just told the local politicians to go screw themselves and rightfully so.
But don’t worry Mr. and Mrs. local politician, you always have AOC’s (who was loudly against Amazon) New Green Deal. Maybe the high speed rail from Coney Island to Long Island City will create those 40,ooo jobs.