What about two parties negotiating a deal that benefits them both runs contrary to capitalism?
Well, in this case, one party is a faction of politicians, and the other is an outside corporation. If both benefit from the deal, who is left to pay the costs?
It could be customers, taxpayers, foriegners, or competitors. Did I miss anyone? Who pays in this case? Not foreigners, or competitors, or customers. So this was a deal hammered out to carve up taxpayers.
This isn't capitalism, it is the recipe for cronyism.
I think wonderful things about Amazon. They have done more to equalize material wealth to the poor in the last decade than everyone inspired by Marx in all of modern history.
The culture of Amazon is still a bit mind blowing to me today. I expect them to be bigger when all the rest of FAANG is dust.
But the Queens deal was bad for Amazon and Queens.
Amazon wants another HQ. They want it to be in a place that will help attract the talent. Seattle will not do for this, as they already have Seattle as an attractant. The next HQ city needs to be able to attract the talent currently graduating, and not be so bad that talent currently in Amazon would object to the transfer (so Detroit is out). I have never been to NYC, so I don't know Queens, but it seems like the kind of choice an HR and corporate RE committee would make. The best of a list of mediocre possible cities. Wherever is chosen eventually, will benefit and suffer.
So let's talk about the benefits and drawbacks, because we are 5 pages in, and still talking about this like it's sports.
Corporate enconomic benefits package: typically, this is a relief of taxes and regulations the corporation negotiates with politicians. It happens all the time, and sacrifices the local interests to the corporate and political interests. Sometimes, this works out well.
My first job in cabling was working on building 4 in the DuPont, Wa Intel plant. When I did it in the nineties, Dupont was a freeway exit, a street, and the plant. 20 years later, Intel closed the plant, and I went back to bid on some of the building and plant that was auctioned off after the closure.
Now there's a retail district, other businesses, and the old plant is being converted into a giant trucking/warehouse operation. There's a few housing developments, and all the other makings of new suburbia.
What was sacrificed/gained? Intel spent a ton of money on facilities/infrastructure, but saved a ton in B&O taxes. They were thinking in short term the whole time. When we were building it, the story on site was that it was a short term project for Intel, and they would shut it down when the tax breaks went away. And they did. I assume it worked out well for Intel, as it seems to have followed their plans.
But what about the locals? Before, they were close to I-5 and pretty much had to go elsewhere (mainly the local military base(s) ) for employment. Now, there is a variety of opportunities they didn't have 20 years ago. Intel didn't pay B&O taxes for the whole time lthey were here. But they paid sales tax on everything they used, and all the employees they brought to the plant paid taxes, and the businesses around them paid all their taxes. The local schools had a very sudden influx of both students and revenues. I have no idea how that went. The area moved from a patch of woods and a few houses/farms, to a shiny new edge of the Seattle Sprawl. Is this better/worse/neutral? That's a value judgement. It's just different. I think it would have happened anyway, but in a far less organized, more organic, way.
But that's really the best case example. Because there was almost no infrastructure there, and we place little economic value on forest.
The workers weren't there. Intel imported them.
The roads weren't there. The Intel project built them.
The schools were there. In 2008, the elementary students needed to be split between 3 existing schools, but by then, local government had been collecting more revenue for a decade.
So, for the "You didn't build that!" crowd, eh hem. Check your facts. Government doesn't build infrastructure, as a rule. Government maintains infrastructure. So, cutting a tax break to megacorps to build a tax base can be a very good thing from a tax farming perspective. The costs can be imposed on a small number of citizens, who have options to avoid the costs by moving, (with extra cash in hand, because their property is worth more after the project than before), or they can profit from the changes.
But let's look at how this is different from the Amazon/Queens deal.
Queens is fully developed (I am assuming, again, never been there). If Amazon moved in a HQ, they would pay for construction, and all of the modification of infrastructure necessary to connect up.
But how much more traffic will need to move to and from the site, every day than used to? Where will the additional people live? How many locals will get opportunities at HQ2? How will their community change?
These aren't hard questions when a bulldozer can accidentally go 100 yards off course with no objections, but they are critical when everything one wants to build must destroy everything existing in the footprint, and often that footprint affects the infrastructure of one's neighbor.
Construction basically zeroes out the value of what is existing. Instant, complete depreciation. But construction builds new infrastructure in its place. Then, taxes are paid, and government continues to maintain the infrastructure.
But in a city, there isn't room to make anything new and better without destroying the old. Seriously, just look at the streets. They were laid out for horses. They were sorta reworked every time they absolutely had to be, but you couldn't lay out a few extra arterials and associated transportation infrastructure to move 25-50k people to and from a point in the city, every day. But I could build that in DuPont. And I could do it better and cheaper.
The citizens of Queens have jobs, and infrastructure. What can Amazon offer them? Richer neighbors? Worse traffic? Taller apartment buildings? How's that going to help? Currently income averages 70k. Bring in 25-50k people making on average twice what the locals make, what happens to housing for locals? Well, if one makes considerably more than average, not much. The rest will be displaced. They may still be in Queens, but the sharp rise in housing costs will force many to relocate to less expensive housing. And all that movement will distribute the former locals to worse housing for more money. Many of their jobs will go out of town, as higher RE costs and higher taxes drive out lower margin businesses.
But once Amazon starts building, there will be more jobs. And all those overpaid and overworked Amazon employees will be spreading the wealth. So entertaining and servicing those employees will be lucrative. And if all else fails, as Campitor keeps pointing out, there's always low income housing and Amazon Charity TM to look forward to.
This has been framed as a tax issue. It's not. It's a population density issue. Infrastructure costs go up at an expotential rate as population rises linearly. So adding 25k people to Queens is far far more expensive than 50k people to the periphery of a city. Not because Queens is super expensive, but because Queens was already built. Adding more people and more money won't help. If residents of Queens wanted more people and money, isn't that what Manhattan is for?