The Amazon debacle didn't have to end this way for New York. A different outcome, however, necessitates a different approach.
My thoughts on Amazon eschewing Long Island City:
I understand the concerns of many regarding the “giveaway” of too many incentives to well-funded corporations. That said, each case must be looked at as to the specific benefits, potential downsides and overall ROI. In this case, I believe it's a huge loss for NYC and the region (and my home, Long Island, although I was concerned that without new approaches to land use and infrastructure, many communities on LI would not have leveraged the opportunity in a manner to expand their tax base, induce economic development and achieve outcomes such as attainably priced housing and reduction of tax burden).
NYC is a unique case, because it has such an economy of scale. From the sheer size of its overall workforce, to expansive supportive infrastructure, to governmental mechanisms (and yes, we can argue their efficacy and efficiency). If the same incentive package were provided in a smaller market, one that did not have such substantive existing infrastructure - financially strained and physically challenged as it may be - I don't believe such incentives would have resulted in such a positive ROI. But NYC is a unique animal.
In the end, this is a loss of a tremendous new engine of growth for one of the few areas of NYC – and the nation - that could not only absorb the growth, but harness it into positive transformation of place and improved economic and social outcomes for millions of residents. Had Amazon moved forward, new revenues could have been directed to attain community priorities such as affordable housing, improved connectivity and transportation systems, better designed and more well-funded infrastructure.
POINT OF EMPHASIS: I preach integration all the time. Of land use, public policy (i.e. affordable housing), infrastructure, finance. If this were not such a top down initiative to "get Amazon and win" but rather a co-creative effort where the State, the City, the surrounding counties and their respective COMMUNITIES determined what outcomes they all would desire and require to be supportive, I believe we would have seen a far different result.
It would look something like this:
1. Amazon needs a location that helps drive their bottom line. They are a business, after all, and we are a capitalist society (mostly).
In the end, some combination of incentives; ability to attract their targeted workforce through items such as quality of place, mobility and housing needs; provision needed infrastructure; and ongoing tax liabilities and cost of business would all figure into the equation. NYC would never have been their lowest cost option, but there is still a greater return on investment for Amazon to have relocated to LIC, even with the higher costs associated with NYC and the state’s regulatory environment, because of those aforementioned needs.
Especially in light of all those attributes NYC brings to the table that simply don’t exist elsewhere, Amazon’s bottom line and profitability would be reliant on far more than the incentive package itself. In my opinion, a more thought-out and comprehensive approach to finding a way to boost Amazon’s bottom line (with considerations to affected communities taken into consideration, as discussed below) could have gotten Amazon what they needed as a business in terms of bottom line ROI, and provided a package that was not only amenable, but desired by, a far greater range of constituents.
Takeaway: Amazon needed a place where they could maximize their ROI and result in greater long term profitability. Nothing wrong with that, they are a business after all, and we are still a (mostly) capitalist society. There are tools and levers in addition to the incentive package that could have achieved these goals, had the process been conducted in a more thoughtful and engaging manner.
2. Local communities have a range of desired needs and outcomes, and Amazon COULD have been leveraged to help obtain those objectives.
Perhaps instead of an incentive package that was viewed to line Amazon’s pockets, there were joint investments in infrastructure to ensure the new growth would both not be a burden to existing and future residents and workers in the region, but actually have improved quality of life through enhancements to transit that are considered in tandem with land use policy and issues such as affordable housing. Perhaps employer housing programs could have been employed while setting aside a portion of future revenues to preserve and expand attainable and affordable housing both in those local communities and throughout the region. Job and career training, investments in education that align with providing necessary work skills.
The list could go on and on. An investment of this size holds the capability to transform so many lives – all the while providing corporate ROI and corporate stewardship that too often are viewed as mutually exclusive. They are not. Determine desired community outcomes and work backward to align those outcomes with the new revenue and economic growth opportunities, all the while remaining sensitive to the need for Amazon to meet their bottom line needs as a business.
Takeaway: Work in concert with the affected communities to determine their needs and desires through an engaging, community centric and co-creative process. How could we use the billions in ongoing investment and new revenue creation to meet those goals by harnessing new revenues in concert with policy choices to reach those goals.
3. Regional needs and impacts (and those State-wide) should be considered, much in the same way as those directly affected.
The fact is the size and scope of Amazon’s planned investment would extend far beyond LIC, Queens and NYC. As such, the ‘co-creative’ process described above, used to determine desired outcomes such as better transit, infrastructure and housing policy, should be extended to neighboring counties. However, those communities and municipalities would need be willing to take a fresh look at their policies, as doing business the old way simply won’t produce the necessary results. Finally, the State’s investment in incentives and supportive infrastructure necessitate SOME consideration for those counties and communities that might never be directly affected by Amazon’s now unplanned move. Let’s not forget there are means to provide benefits to communities’ state-wide with such an influx of investment and new talent to NYC.
Now, there must be a balance here between regional needs and those of local communities. That is why I suggest a “carrot” approach whereby local communities determine how (and if) they choose to grow. Those which look to undertake responsible land use, mobility and housing policies get more State dollars. Those which do not are not punished, and can choose their own path, but shouldn’t expect the state nor region to support “the old way” of doing things, including the increasing cost of suburban, low density built environments and infrastructure. It’s about balance: balance between local, regional and state needs on one hand, and balance between retaining and enhancing existing community character, while allowing for and directing growth in a responsible manner that benefits both locals, and the region as a whole.
Takeway: The effects of Amazon would be felt beyond NYC. Take a truly comprehensive and regional approach by providing tools and funding to local municipalities and communities willing to take a fresh look at land use, zoning, housing policy and transportation. Provide carrots to those willing to provide density and mixed-use neighborhoods near transit, to help disperse the direct impact of such a large new center of employment.
ABOUT THE AUTHOR: Brandon A. Palanker is a developer, land use strategist and a revitalizer of downtown and suburban communities. With nearly 20 years experience in mixed-use development, place-based economics, community engagement and public policy, he believes an integrated approach that considers land use, public policy, innovative finance, infrastructure and economic development is necessary to successfully overcome the hurdles often associated with community-driven, transformative redevelopment. Brandon is a renowned public speaker and advisor for public and private sector clients through his consultancy 3BL Strategies and is co-founder of the Downtown Collaborative.