PHILADELPHIA | Highrise Development Thread IX

[mcgrath618]

It’s been said before, and I am heavily inclined to agree, that this will cause New York and DC to just get more expensive, which will encourage more people to move to Philadelphia. Also, the article makes a very good point about how the money we were offering Amazon should be going to public funds like transportation and infrastructure.

[AbortedWalrus]

Originally Posted by mcgrath618

Also, the article makes a very good point about how the money we were offering Amazon should be going to public funds like transportation and infrastructure.

That's not how tax subsidies work. Cities weren't offering money to Amazon from funds they already had. They were offering to let Amazon keep more of the money they made. Without Amazon they have $0 of that money and none of the economic growth it would bring that could actually create any new revenue.

[UrbanRevival]

Originally Posted by AbortedWalrus

That's not how tax subsidies work. Cities weren't offering money to Amazon from funds they already had. They were offering to let Amazon keep more of the money they made. Without Amazon they have $0 of that money and none of the economic growth it would bring that could actually create any new revenue.

But it's even more nuanced than that. The initial construction and post-development impacts that Amazon will have in terms of infrastructure, public safety, disruptions to adjacent business, etc etc. are very real dollars and cents. And by allowing Amazon "keep more of its money," these cities will very much be forced to foot more of the bill than they otherwise would have had no subsidies been offered at all.

[mcgrath618]

Originally Posted by UrbanRevival

But it's even more nuanced than that. The initial construction and post-development impacts that Amazon will have in terms of infrastructure, public safety, disruptions to adjacent business, etc etc. are very real dollars and cents. And by allowing Amazon "keep more of its money," these cities will very much be forced to foot more of the bill than they otherwise would have had no subsidies been offered at all.

Exactly my point.

[3rd&Brown]

Originally Posted by mcgrath618

It’s been said before, and I am heavily inclined to agree, that this will cause New York and DC to just get more expensive, which will encourage more people to move to Philadelphia. Also, the article makes a very good point about how the money we were offering Amazon should be going to public funds like transportation and infrastructure.

Except they also announced they're opening a 5,000 person office in Nashville and Nashville hits literally ZERO of the requirements on the RFP.

Transportation: ZERO
Airport: ZERO
Universities: Literally 1 of note, Vanderbilt. And it is hardly known for it's research.

The entire thing was a charade.

[Busy Bee]

Carrot of goodwill to the south.

[jsbrook]

Originally Posted by 3rd&Brown

Except they also announced they're opening a 5,000 person office in Nashville and Nashville hits literally ZERO of the requirements on the RFP.

Transportation: ZERO
Airport: ZERO
Universities: Literally 1 of note, Vanderbilt. And it is hardly known for it's research.

The entire thing was a charade.

So what? Amazon has smaller outposts everywhere that don't meet the criteria of its HQ2. I still think it was probably a charade and Amazon had it narrowed down at the outset and went through the whole contest to drum up incentives and mine city data. But not because they have a Nashville office. The chosen locations do check a lot of the RFP boxes. Not the affordability ones...

[3rd&Brown]

Originally Posted by jsbrook

So what? Amazon has smaller outposts everywhere that don't meet the criteria of its HQ2. I still think it was probably a charade and Amazon had it narrowed down at the outset and went through the whole contest to drum up incentives and mine city data. But not because they have a Nashville office. The chosen locations do check a lot of the RFP boxes. Not the affordability ones...

What boxes does Nashville check?

[jjv007]

Originally Posted by 3rd&Brown

What boxes does Nashville check?

Nashville isn't really part of the HQ2 even if they got a satellite.

[Radio5]

Originally Posted by 3rd&Brown

What boxes does Nashville check?

Nothing, but that's why it didn't get a hq2/3

[Jayfar]

Originally Posted by 3rd&Brown

What boxes does Nashville check?

I would imagine there's some critical mass in Tennessee for the distribution logistics industry generally considering that Fedex is based in in Memphis, where they also have their global hub.

[BnaBreaker]

Originally Posted by 3rd&Brown

Except they also announced they're opening a 5,000 person office in Nashville and Nashville hits literally ZERO of the requirements on the RFP.

Transportation: ZERO
Airport: ZERO
Universities: Literally 1 of note, Vanderbilt. And it is hardly known for it's research.

The entire thing was a charade.

Wow... sour grapes much?

I also could have sworn I took an express bus from downtown to something called Nashville International Airport a few months ago... but apparently that was all an elaborate illusion! Yikes... I gotta cut down on the PCP!

[McBane]

Originally Posted by UrbanRevival

But it's even more nuanced than that. The initial construction and post-development impacts that Amazon will have in terms of infrastructure, public safety, disruptions to adjacent business, etc etc. are very real dollars and cents. And by allowing Amazon "keep more of its money," these cities will very much be forced to foot more of the bill than they otherwise would have had no subsidies been offered at all.

All true, but don't tell me you wouldn't be creaming your pants had Amazon selected Philadelphia.

[PHL10]

Originally Posted by UrbanRevival

But it's even more nuanced than that. The initial construction and post-development impacts that Amazon will have in terms of infrastructure, public safety, disruptions to adjacent business, etc etc. are very real dollars and cents. And by allowing Amazon "keep more of its money," these cities will very much be forced to foot more of the bill than they otherwise would have had no subsidies been offered at all.

OK but if Amazon creates/brings in 25,000 jobs with an average salary of $100k, that would be over $100,000,00/year in wage tax alone. That wouldn't include all the spin off jobs and all the money those people will spend paying other taxes like sales tax, hotel tax, parking tax, drink tax, and Philadelphia other dozen hidden consumer taxes.

[UrbanRevival]

Originally Posted by PHL10

OK but if Amazon creates/brings in 25,000 jobs with an average salary of $100k, that would be over $100,000,00/year in wage tax alone. That wouldn't include all the spin off jobs and all the money those people will spend paying other taxes like sales tax, hotel tax, parking tax, drink tax, and Philadelphia other dozen hidden consumer taxes.

That is true. My point wasn't to suggest that there's no net positive impact at all, but I think it tends to be overstated when factoring in the true cost of incentives and the fact that it will definitely take a number of years for the economic benefits to bear fruit (for example, not all 25,000 employees will be onsite in either NYC or NoVA immediately). This is aside from the real ethical dilemma of offering any tax reprieve to major corporations, but that's a whole other conversation.

There's also accountability in the long-term. Who's to say Amazon won't relocate or even lay-off many of these hired employees in, say, 10 years, or offer them a remote work option? They're obviously not chained to any city.

The underlying point is that it's never wise for cities/states to throw around tax incentives like a high roller in Vegas, as was done in this case, without fulling vetting all the potential outcomes and ESPECIALLY not without transparency.

In Philly and PA's case, why not break up the billions in would-be Amazon tax incentives to about 500 of the current most promising/high-growth companies in Pennsylvania? Would go MUCH farther to invigorate the local economy than a Seattle-based company every would.

[PHL10]

Originally Posted by UrbanRevival

That is true. My point wasn't to suggest that there's no net positive impact at all, but I think it tends to be overstated when factoring in the true cost of incentives and the fact that it will definitely take a number of years for the economic benefits to bear fruit (for example, not all 25,000 employees will be onsite in either NYC or NoVA immediately). This is aside from the real ethical dilemma of offering any tax reprieve to major corporations, but that's a whole other conversation.

There's also accountability in the long-term. Who's to say Amazon won't relocate or even lay-off many of these hired employees in, say, 10 years, or offer them a remote work option? They're obviously not chained to any city.

The underlying point is that it's never wise for cities/states to throw around tax incentives like a high roller in Vegas, as was done in this case, without fulling vetting all the potential outcomes and ESPECIALLY not without transparency.

In Philly and PA's case, why not break up the billions in would-be Amazon tax incentives to about 500 of the current most promising/high-growth companies in Pennsylvania? Would go MUCH farther to invigorate the local economy than a Seattle-based company every would.

Gotcha. I agree. I think we were just describing the opposite sides of the same coin.

[Knight Hospitaller]

Originally Posted by UrbanRevival

In Philly and PA's case, why not break up the billions in would-be Amazon tax incentives to about 500 of the current most promising/high-growth companies in Pennsylvania? Would go MUCH farther to invigorate the local economy than a Seattle-based company every would.

Indeed. It would also diversify the mix of companies thereby minimizing risk. They'd likely see a good and solid average return on investment.

[iheartphilly]

^
Wait one second. The above is pure conjecture whereas Amazon is a proven business that has expanded well beyond its hayday as a online book retailer. The company needed to expand and "used" the State's and/or City's tax credit for its expansion. Also, this is a behomoth company worth 780+ billion with annual revenues of over $220B dollars. One would assume these high paying jobs are tech related in cloud computing say for the military and other businesses and ventures. I wouldn't bet against Amazon. They are as skillful as they are ruthless in dominating industries once they get their arms around something.

[McBane]

Originally Posted by UrbanRevival

In Philly and PA's case, why not break up the billions in would-be Amazon tax incentives to about 500 of the current most promising/high-growth companies in Pennsylvania? Would go MUCH farther to invigorate the local economy than a Seattle-based company every would.

Agree 100%. Either this or use those tax incentives to lower business taxes across the board to make PA more competitive.

Except we can't expect our politicians to have that long term vision. Amazon was easy because it was such a big target with a mammoth, immediate payoff. Distributing funds to companies that people never heard of so that they can continue to grow is a more difficult sell. A no-name tech company doubling in size from 5 to 10 employees and committing itself to the city/state is not going to generate tantalizing headlines but is exactly the type of growth our city and state need to foster.

[Urbanthusiat]

Originally Posted by McBane

Agree 100%. Either this or use those tax incentives to lower business taxes across the board to make PA more competitive.

Except we can't expect our politicians to have that long term vision. Amazon was easy because it was such a big target with a mammoth, immediate payoff. Distributing funds to companies that people never heard of so that they can continue to grow is a more difficult sell. A no-name tech company doubling in size from 5 to 10 employees and committing itself to the city/state is not going to generate tantalizing headlines but is exactly the type of growth our city and state need to foster.

There's a very important difference between those two ideas. Tax breaks for Amazon would be forgoing tax revenue that you're not already collecting that you wouldn't otherwise have. Tax breaks for existing companies would be giving up tax revenue that we're already collecting. The former doesn't directly affect the state budget while the later does. Now I'm not against helping out our existing companies more, but those are two very different ideas with regards to state tax collections.