Laughter erupted at Tuesday's Amazon's Long Island City announcement when Streetsblog asked Gov. Cuomo to promise Queens's already-miserable straphangers that the sweetheart deal with the retail giant won't make the subway system he controls even more miserable.
Amazon's impending move to the East River end of 44th Drive is expected to bring at least 25,000 new jobs — and more of a crunch on the subway and buses — to the neighborhood. The influx terrifies Queens residents — one of whom made her opinion known after Streetsblog raised the issue at Cuomo's Midtown office.
"Subway rides are already miserable!" April Simpson, president of the Queensbridge Houses Tenants Association, shouted from her seat.
Cuomo didn't bother to respond to Streetsblog or to Simpson, tossing the issue to Long Island City Assembly Member Cathy Nolan, who argued that commutes won't get worse because many of Amazon's employees will live in either Manhattan or Long Island City itself.
"You're going to have a certain amount of reverse commuting," said Nolan.
And with that, Cuomo ditched the press conference, leaving Mayor de Blasio to fend off reporters.
So what did we learn?
There's no doubt that Amazon's incursion into Long Island City will strain the transit system as the initial workforce of 25,000 — and the eventual staff of 40,000 — makes its way to the new complex, which is about four blocks from the E,G and 7 trains at Court Square.
The memo-of-understanding between Amazon and the city and state [PDF] requires that online retailer to contribute "payments in lieu of taxes," or PILOTs, for the land it will occupy.
PILOTs are supposed to be pegged to property taxes in the neighborhood, but rarely are. Half of the PILOT money will go into an infrastructure lockbox managed by the city's Economic Development Corporation. Deputy Mayor Alicia Glen said that the fund would grow to $600 to $650 million over 40 years.
At most, that's $16.25 million per year — a pittance compared to what the transit system needs. The MTA's construction wish list is currently $60 billion. Its annual operating budget is $16 billion — or 1,000 times bigger than Amazon's annual contribution will be.
Think about it: Thanks to the Amazon deal, the mayor is again hyping his Brooklyn-Queens streetcar, which would pass the Amazon corporate site on its way from Astoria to Gowanus. Its construction budget alone is $2.7 billion. That price represents 166 years of Amazon PILOT contributions.
"The PILOT program just isn't going to make much of a dent in transit," Tri-State Transportation Campaign Executive Director Nick Sifuentes told Streetsblog's Gersh Kuntzman. "Ferry services might see a boost in subsidies, but the subways aren't going to see this have much of an impact at all."
Wait, so PILOTs are bad?
Speaking to reporters after the press conference, Glen said the PILOTs would be pegged to area property taxes, which will be determined by the city's Department of Finance.
The city estimates that will provide $32 million per year over four decades. Glen insisted that Amazon would not be able to skirt its obligations to state and city coffers.
"There's no game. It is totally transparent," she said. "The pilot is literally instead of ... writing a tax check to the general fund. There's no ability to game the system."
More often than not, however, PILOTs don't reflect actual property tax rates. Across the city, powerful corporations have avoided paying tens of millions of dollars in annual tax revenues ‚ and it's been going on for years, as Juan Gonzalez described in the Daily News a decade ago. And when PILOTs were used to help Bruce Ratner build his Atlantic Yards project a decade ago, they benefitted the developer. Years later, when few people were paying attention, Ratner sued to get his PILOT obligations reduced.
So what do we get?
In the Long Island City deal, state and city subsidies will add up to $3 billion and, the city and state believe, will generate $10 billion in new tax revenues over the next two decades.
That's not good enough, some local officials say.
"It’s a very one-sided deal. I’d like to see Amazon subsidize Long Island City, instead of us subsidizing Amazon," said State Senator Mike Gianaris, who represents the neighborhood and is vehemently opposed to the Amazon deal. "Look, I’m not against the jobs. Jobs are good. But what I am against is basically paying Amazon’s salaries for them."
Sifuentes blasted Cuomo and de Blasio for letting Amazon off the hook on state and city taxes.
"Riders would be better served if Amazon paid taxes like everyone else, rather than ... funnel [its] tax revenues into nicer sidewalks and ferry services for [its] employees," he said.
Fortunately, nothing is set in stone, and the city and state will negotiate the final terms of the deal over the next 16 months. At Tuesday's MTA board committee meetings, Long Island City residents bemoaned the coming deluge — and called on board members to fight to ensure Amazon provides much-needed subway funding.
The closest train station to Amazon's new headquarters is at Court Square, which is also the location of one million square feet of office space Amazon just leased as a temporary home. The Court Square station serves nearly 24,000 daily riders, according to MTA data — a 15 percent increase over the last five years.
"Long Island City already faces unprecedented growth, even before Amazon," said Lisa Daglian, who lives in LIC and serves as executive director of the MTA's Permanent Citizens Advisory Committee. "We urge you to ensure that there is a requirement that Amazon fund investments in the transit system that will bring its employees to their new facility."
