Amazon Scraps Long Island City HQ Plans

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Amazon HQ2 Protesters at a City Council Hearing (Source here)

Amazon announced today that it is pulling out of a deal to build half of its second headquarters in Long Island City, Queens. Barely three months after Governor Andrew Cuomo and Mayor Bill de Blasio proudly announced the corporation’s plans to bring 25,000 jobs to the Queens waterfront, the project has been scrapped. This news amounts to victory for prominent and vocal opponents such as Congresswoman Alexandria Ocasio-Cortez, City Council President Corey Johnson and State Senator Michael Gianaris and at least momentary defeat for the Mayor, Governor and pro-business groups.

Amazon said in a statement:

“While polls show that 70% of New Yorkers support our plans and investment, a number of state and 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…”

It was the efforts of politicians like Gianaris in particular that turned Amazon off. His recent appointment to an obscure board, potentially with the power to sink HQ2, was likely the final straw that convinced Amazon to cancel their plans. According to the NY Times, Mayor de Blasio and Governor Cuomo led Amazon executives to believe that news of the company’s arrival in New York City would be met with near universal acceptance and praise. But, unlike the Mayor and Governor who rolled out the red carpet for Amazon and its CEO, the world’s richest man, other politicians and the citizens of the city would not be so easily wooed. Cuomo and de Blasio showered Amazon with $3 billion in taxpayer funded easements and with loopholes to circumvent normal land use processes in the city. It was the those tax breaks and who they were for that opponents used most effectively to fight Amazon’s seemingly unstoppable arrival.

Pro-business groups and other supporters of the deal to bring Amazon to Long Island City immediately decried the work of opposition, concerned that their attitude and behavior amounts to a “Not Welcome” sign for all companies trying to set up in the city. It is undeniable that for New York City to move forward, new infrastructure, new housing and new homes must be built. We cannot accept deterioration of our infrastructure and built environment as the only way to keep housing prices low as NIMBYs suggest. While it is true that the cries of NIMBYs who default to concerns about displacement when any project from a bike lane to a residential building to a massive corporate campus is proposed, Amazon backing out of this deal is not a referendum on them. Instead, it is a referendum on the use of corporate tax breaks to lure companies to cities and states, deals which use millions (and in this case billions) of taxpayer dollars to subsidize rich corporations in return for vague promises of future public benefit.

Amazon said themselves in their statement today:

“There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.”

This sentence left some asking, what was the point of offering tax breaks in the first place? Amazon will continue hiring hundreds if not thousands of people in New York City, without a dime of public money. As I wrote in a previous post upon announcement of the original HQ2 deal, Amazon was always going to come to New York City because the benefits of the agglomeration economy here are more powerful than just about anywhere else on the planet. But, instead of quietly accruing real estate and building their presence, Amazon executives embarked on a months long charade, pitting state against state, city against city in a bid to see who would bend over furthest. The search for HQ2 amounted to nothing more than a grotesque song and dance, which brought out the worst in public officials, most notably Bill de Blasio and Andrew “Amazon” Cuomo. The hubris with which Amazon executives operated is staggering. They expected a hero’s welcome and instead got what they deserved, full-throated opposition from concerned residents and politicians who would not accept the deal that had been foisted on them behind closed doors.

With that all being said, I hope Amazon continues to build its presence in New York City like any other corporation with no contests and no sideshows. It is important for the city’s technology sector to continue its ascent and maybe someday challenge Silicon Valley for primacy in the field. Google has built up a population of tens of thousands of employees in Chelsea and is planning to double its workforce with a new development on Manhattan’s west side. Though I am sure there are groups in New York City that are unhappy with Google’s growth, opposition has been nowhere near as strong as it was to Amazon. If Amazon had not pitted municipalities against each other for tax breaks and if our highest ranking representatives had not so willing joined the fray, few would have batted an eye about a few thousand employees moving into Hudson Yards every year. But instead, they chose the loudest and most inflammatory route and when New Yorkers stood up to oppose the vision they were selling, Amazon immediately retreated to lick their wounds in Crystal City, Virginia and Nashville, Tennessee.

Amazon Picks Queens for HQ2

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Long Island City

TL;DR – Amazon would have chosen New York City subsidies or not.

This week, Amazon formally announced that it would split its HQ2 between Crystal City, Virginia and Long Island City (LIC), Queens, confirming a leak reported previously by the Wall Street Journal. After a 14 month long courting process during which hundreds of American and Canadian cities vied for Amazon’s affections, HQ2 landed in two places that had been widely predicted. Amazon, which is headquartered in Seattle, was long expected to establish a presence on the opposite coast. Crystal City, located adjacent to Washington National airport, offers Amazon and Jeff Bezos close proximity to the Federal government and agencies such as the Department of Defense. LIC is of course located at the heart of the most economically powerful city in the world, New York City, with its large and well educated population.

Together, NY City and State proposed four landing spots for Amazon in their bid: Downtown Brooklyn, Hudson Yards, Lower Manhattan and the eventual winner LIC. The Queens neighborhood located at the borough’s southwest corner, which offers a one-stop subway ride to Midtown Manhattan, is the city’s fastest growing neighborhood. More residential units have been built there in recent years that in other development hotspots like Downtown Brooklyn and Williamsburg. However, the neighborhood remains transitional, an amalgam of gleaming high rises, older row houses, warehouses, transportation infrastructure and the largest public housing project in the United States. This housing project, the Queensboro Houses, sits just a half mile from Anable basin, the largest of the proposed sites of Amazon’s HQ2. This proximity highlights one of the main tensions and criticisms of the multi-billion dollar deal to bring the tech giant to New York City.

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Amazon CEO Jeff Bezos

The median income for a household in the 26 buildings that comprise the Queensbridge houses is $15,843. The advertised median income for jobs at Amazon’s new headquarters is $100,000. The New York City Housing Authority or NYCHA, which owns the Queensbridge Houses runs a $77 million deficit every year and is facing a $17 billion repairs backlog. Families all across New York City in NYCHA homes are forced to grapple with leaks, broken elevators, persistent crime, untreated asbestos and spotty heat in the winter. Rather than spend $3 billion of city and state money on taking a chunk out of the maintenance backlog, that money is instead headed to Amazon as part of the sweetheart incentive package agreed on to bring the company to LIC. Though Amazon has pledged to build a new school, a tech incubator, invest in infrastructure and run career training for Queensbridge residents, most of the benefit for New York City will come more from a more trickle down theory.

To be clear, I am in favor of Amazon setting up shop in New York City. 25,000 new jobs with salaries that can support the city’s expensive lifestyle, thousands of other related jobs for service workers and the establishment of New York City as the East Coast’s leading tech hub are all good things. But, even without huge subsidies from the state and city, its presence could be disruptive to the lives of millions. I do not mean to sound like a NIMBY here. Rather, I am supportive of Amazon’s HQ2 in general but with some important caveats. For one, they must provide money to improve transportation and other infrastructure in Queens that will be further taxed by thousands of new workers and residents. Amazon must also take mitigative measures to prevent rent hikes that lead to displacement, which are inevitable when thousands of new high income people move in. Other actions must be taken to blunt the impact of Amazon’s arrival, all of which would have been possible if the Governor, the Mayor and corporate officials had not gone behind local officials’ backs to shake on this deal.

Any demands on Amazon to improve LIC to mitigate any negative impacts of its arrival must adhere to two landmark pieces of legislation, Nollan and Dolan, which assert that there must be nexus and proportionality to any community benefits asked of a developer. If these demands are deemed to be unrelated to or disproportionate in scale to the impact of that development, then it could constitute an exaction. Reaching an agreement on a reasonable package of benefits for a community is possible under New York City’s land use statutes, which were evaded by Amazon.

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Anable Basin, site of Amazon’s HQ2

Under New York State’s General Project Plan (GPP), New York City’s extensive local review process for projects that trigger a rezoning known as the Uniform Land Use Review Procedure (ULURP) are effectively nullified. By design, there was no opportunity for the city council, community boards or for local residents to sound off on this proposal. There is the possibility that these groups would have moved to block Amazon’s arrival subsidies or not. But, it is unfair to New York City residents that their taxpayer dollars will go towards subsidizing the richest man in the world, while the package of goods they receive in return is small and not necessarily what they wanted or needed. Is there nexus and proportionality for New Yorkers whose tax dollars are subsidizing Amazon? Will what Amazon gives back be enough or what Queens residents need? So far there is not and it is not, therefore this action may constitute an exaction.

There are plenty of reasons why state and city leaders would want Amazon to set up shop in New York City. More than the tens of thousands of jobs it will create, it establishes New York City as the East Coast’s leading tech hub and highlights the economic and cultural prowess of America’s largest city. But, it is because of New York’s status as the “Greatest City in the World” that I would argue companies like Amazon should be competing to set up shop there, not the other way around as has occurred. Scholars and writers on the emergence of global superstar cities, which command the flow of capital, such as Saskia Sassen and Richard Florida posit that there are world cities that exist on a separate plane from their domestic and international peers. New York, along with London, Paris, Tokyo and Hong Kong are among those cities that attract the lion’s share of the smartest people, the biggest companies and the most renowned cultural institutions. New York will continue to get bigger, richer and smarter, while second tier cities scrum for whatever is left. Amazon, one of the world’s largest companies, run by the world’s richest man was always going to come to New York. The mistake of our elected officials was to believe that there was ever really a contest that could be won in part by forking over billions of dollars in taxpayer subsidies.

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One Court Square, where Amazon will rent 1 million square feet

New York City is not lucky to have been chosen by Amazon for its HQ2 location. Amazon should consider itself lucky that it will have them. Corporations should compete for land in New York, New York should not have to compete with corporations. According to Florida, rich and powerful cities like New York become more so, their gravitational pull of educated people and big companies growing stronger with each new addition. Amazon was always going to pick New York because it is New York, one of only a few super star cities, which positions the company at the control desk of global capital flows. Amazon already knew what a headquarters in New York could do for it. But, before New York City signs off on a deal, Amazon must show New York residents and business owners what it can do for them.

 

LaGuardia Airport and the Wrong Way AirTrain

New York City’s three major airports are notoriously difficult to reach by public transportation. While other global cities such as Paris, London and Tokyo all offer one seat rides to their respective airports, two or three seats is the norm for trips to JFK, Newark and LaGuardia Airports. No public transportation trip is more difficult than to LaGuardia in spite of its relative proximity to Midtown Manhattan.

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Rendering of LaGuardia AirTrain station. Source: Office of the Governor

LaGuardia’s inaccessibility owes in large part to a lack of a rail link. Though the AirTrains that provide service to Newark and JFK Airports are not without their own significant problems (Newark’s in particular), people that are airport bound can at least be certain that they will avoid automobile traffic on highways. To reach LaGuardia airport, travelers have a choice of five bus lines. The most viable of these bus lines is the Q70, which provides direct service from the Jackson Heights and Woodside Subway and LIRR stations. Though a fine service, it is still at the mercy of traffic on local roads and on the Brooklyn Queens Expressway, which at times has been so bad that departing passengers have ditched their vehicles and walked to the airport.

Enter New York Governor Andrew Cuomo who on June 25th signed legislation authorizing the initiation of a planning study for LaGuardia Airport’s very own AirTrain. According to the Daily News, Cuomo asked “How can you not have a rail train to the city from a New York airport?…It’s just incomprehensible.” The AirTrain is the ribbon on top of an $8 billion renovation of the airport, which Vice President Joe Biden called “third world” in 2016 and has become one of the Governor’s pet projects.

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Map of proposed AirTrain with transit connections. Source: Office of the Governor

In an effort to step on as few toes as possible, to avoid the wrath of NIMBYs and to move the project forward as quickly as possible (as is Cuomo’s style), the Governor and his team have picked a route that avoids any use of eminent domain. To achieve this, the new 1.5 mile long AirTrain will be routed above the Grand Central Parkway away from Manhattan to the Mets-Willets point 7 train and LIRR stations. Manhattan-bound tourists and business people will have to backtrack before eventually making their way west towards Midtown on a crowded 7 train or on a Port Washington line LIRR train, which runs infrequently and costs significantly more than a subway swipe. It is hard to imagine that an AirTrain to the LIRR connection to Penn Station or to Grand Central Terminal (when East Side Access is complete) will take less than 30-minutes as the Governor’s office advertises. Avoiding the LIRR’s $6.25-$8.75 fare means a ride on the at capacity 7 line, which runs local most of the day. A local ride from Mets-Willets Point station to Grand Central takes 30 minutes on its own.

Better alternatives to the wrong-way AirTrain that the Governor is pushing forward have been suggested for decades. In the late 1990’s, planners proposed extending the N train to the airport from its terminus at Ditmars Avenue in Astoria. This is likely the best option to be proposed because it offers what all New York airports lack, a one seat ride to Midtown Manhattan (and for the cost of a subway swipe). But Astoria NIMBYs and then city council representative Peter Vallone managed to sink it. Other rail links have been proposed over the years, as detailed here, but none gained serious traction until Cuomo began to champion the current AirTrain iteration.

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Three LaGuardia rail link options. Source: The Transport Politic

The MTA continues to be in a state of emergency as Cuomo declared last summer. Buses are slower than ever and hemorrhaging riders. The Subway is literally crumbling back into the earth that was dug to build it a hundred years ago. These services and their 8 million daily riders could make great use of the $1.5 billion that will be spent on the LaGuardia AirTrain. Improving airport transportation connections is undoubtedly a noble and necessary cause, but is it really a priority right now with the system as a whole in crisis? Unfortunately, in the name of building things as fast and easily as possible the AirTrain along a circuitous route is getting priority. If that money is destined to be spent on the AirTrain, the state should at least connect it to the Jackson Heights Subway station, which is served by five subway lines, two of them express. Most of the route to that station would be over highways, just like the current plan.

Perhaps the simplest and most cost effective option would be improving the humble bus lines that connect LaGuardia airport today. The city and state could work together to provide bus-only lanes and traffic signal priority for the Q70 and M60 Select Bus Lines, which would allow them to speed past passenger cars and trucks that currently block their way. Though improving buses is undoubtedly the least glamorous option, it is the most practical. Hopefully someday LaGuardia would get its rail link, in the form of an N/W trains extension. But, until the transportation system as a whole is saved from imminent collapse, simple bus improvements must suffice.

 

 

 

New York’s Transportation NIMBYs

Picture New York City bus line X. Bus line X is one of the busiest in the city, carrying 28,000 riders per day. It operates at an average speed of 6.7 mph and arrives late more than 50% of the time. If you think that it operates in Manhattan’s congested Central Business District (CBD) or another commonly gridlocked area like Downtown Brooklyn, you would be wrong. Bus line X is the B82, which operates along Flatlands Avenue and Kings Highway in southeastern Brooklyn far from a CBD. According to MTA statistics, the B82 is the 13th busiest bus line out of hundreds that operate in NYC. It is a vital transit link for neighborhoods like Flatlands and Canarsie, which are not well served by the subway. For all of these reasons, the NYC Department of Transportation and the MTA had decided to make it a Select Bus Service (SBS). That is until NIMBYs got in the way, pushing B82 SBS plans off the table.

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B82 Bus in service

SBS is a largely successful, if halfhearted, program to improve bus line performance in NYC. SBS buses like the M86 and the B44 employ off-board fare collection, some dedicated bus lanes and all-door boarding. Together these strategies have improved speeds on SBS lines by 10-30%. Giving the SBS treatment to the 13th busiest bus line in NYC and its 28,000 daily riders is a no brainer. However, a coordinated attack by elected officials and a small group of residents incensed by the loss of 130 parking spots along the bus’s route was enough to prevent it.

NIMBY residents, elected officials and business owners who say Not In My BackYard to new housing development, infrastructure and other projects are a powerful impediment to change and improvement in cities. They are obstinate and obstructionist even in the face of projects with clear benefits and few downsides. Transforming the B82 bus into an SBS line to improve the commutes of tens of thousands of beleaguered riders at the expense of only 130 parking spots is one of those projects. The benefits so clearly outweigh the costs by orders of magnitude: for every parking spot lost, 215 riders will get to work, home or to the subway faster and more reliably. And yet, State Senators and car-owning residents came out strongly in favor of parking spots, creating enough of a ruckus to force DOT and MTA to back down.

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B82 map with street treatments proposed by DOT (Source: NYC DOT)

“Arguments against better B82 service are not supported by reality,” writes Streetsblog. Drivers who will lose a handful of parking spots are clearly outnumbered by the 75-80 percent of residents along the Kings Highway corridor that do not own a car. Even NYC, where drivers are outnumbered citywide by bus and subway riders, constantly throws up barriers to improving the bus system in the name of parking. Attitudes by many residents and by elected officials like Marty Golden that privilege the rights of cars on our streets over pedestrians, bikers and public transportation are corrosive, regressive and powerful. MTA and DOT had the right idea for the B82. But, without the support of the Mayor who is at the head of the transportation NIMBY table, millions of daily bus riders will continued to be mired in slow and unreliable service.