Amazon HQ2 RFP

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shmessy said:
+1.

I'm mixed about the whole Amazon thing for Boston. It would be a huge adrenaline shot, but it would also sap much recruiting strength from the NEXT Amazons that are springing up on both sides of the river.

That being said, the N-S Rail Link is a far better use of our resources at this time and will reap many multiples of the Amazon move per dollar over the next several decades.

If Boston takes care of these 3 fundamentals, there is no need for a behemoth to ransom billions from the city/commonwealth:

1) N-S Rail Link
2) Pay the ransom to move the US Post Office and Gillette out of Fort Point Channel
3) Count the money

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Any tax proposal from the state should be structured to provide a net positive to the state... even if it is indirect from income tax collected from salaries and sales tax. Really the tax package formula should take into account salaries paid to Massachusetts residents (perhaps also monies spent buying services from Massachusetts companies) minus revenue from sales made in Massachusetts.

So that way you can really tell what is the net inflow of money from out of state. Otherwise with such huge sales in Massachusetts you could end up with no net benefit... like paying Walmart to employ people to sell stuff here. Employing lots of people is not a net benefit unless the money comes from outside the state. And I would argue to be reasonable whatever formula is applied to Amazon should be applied to all employers with significant out of state revenue.

Subsidies should really be reserved for companies that bring money in from out of state... like the film credit is supposed to.

Unless you can show a net direct economic benefit, then you can make the argument on just about any program or project that the money would be better spent. N-S Rail link, schools, roads, bridges, reducing UMass tuition, first responders, police, parks etc etc all come out ahead of subsidizing jobs at just one private company.

Either way I think the state should have more than enough data to figure out what is a good subsidy for everyone's benefit.
 
I would like the state could add transit improvements and structure it as incentives.
 
I think you probably mean incremental revenue from sales made in MA? Like - they're going to have revenue in MA either way, and its hard to imagine that it would change that much whether they have an HQ here or not...(and all those sales pay sales tax too btw).

And your probably mean income tax, rather than gross salaries...otherwise these might as well be state employees.

Etc.
 
tangent said:
Any tax proposal from the state should be structured to provide a net positive to the state... even if it is indirect from income tax collected from salaries and sales tax. Really the tax package formula should take into account salaries paid to Massachusetts residents (perhaps also monies spent buying services from Massachusetts companies) minus revenue from sales made in Massachusetts.

So that way you can really tell what is the net inflow of money from out of state. Otherwise with such huge sales in Massachusetts you could end up with no net benefit... like paying Walmart to employ people to sell stuff here. Employing lots of people is not a net benefit unless the money comes from outside the state. And I would argue to be reasonable whatever formula is applied to Amazon should be applied to all employers with significant out of state revenue.

Subsidies should really be reserved for companies that bring money in from out of state... like the film credit is supposed to.

Unless you can show a net direct economic benefit, then you can make the argument on just about any program or project that the money would be better spent. N-S Rail link, schools, roads, bridges, reducing UMass tuition, first responders, police, parks etc etc all come out ahead of subsidizing jobs at just one private company.

Either way I think the state should have more than enough data to figure out what is a good subsidy for everyone's benefit.
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I agree on the overall point of subsidies need to result in a net benefit. I'm not sure what N-S Rail link or UMass tuition for example have to do with this. I would have to think 50,000 high paying jobs not to mention whatever taxes the company ends up paying is worth far more than any other project on the horizon. Its the scale of the Amazon presence that's the difference here.

50,000 employee (eventually) @ 100K average X 5.1% income tax = $255M in tax revenue per year. I don't know what else would have that kind of impact on the state's bottom line even before we get to corp taxes, sales taxes from employees, property taxes, etc.
 
Moving the Feds from JFK office park is 1 more under-rated thing left in Downtown.
You have another 115 Fed Tower (truss system over tracks thing) and nice companion.
 
shmessy said:
1) N-S Rail Link
2) Pay the ransom to move the US Post Office and Gillette out of Fort Point Channel
3) Count the money

.
Click to expand...

Confused by why anyone would consider moving Gillette.
If Gillette were going to move, it was a decade or more ago, and the move would have been to Ohio.

We're glad they're still here I thought. I am anyways.

The USPS I get 100%, but have no clue why anyone would want to or think we could move Gillette without just losing the bulk of those jobs.
 
^1+

Those are a great mix of jobs. They do some manufacturing and a lot of R&D in that facility, and I know a lot of students who have had engineering internships through that facility...
 
Rover said:
50,000 employee (eventually) @ 100K average X 5.1% income tax = $255M in tax revenue per year. I don't know what else would have that kind of impact on the state's bottom line even before we get to corp taxes, sales taxes from employees, property taxes, etc.
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You should be looking at the 'net profit' per new resident, not the gross revenue.

i.e. these people create costs for the state too. Lower than average, because they're working age and able bodied. But they ain't free.
 
CSTH said:
You should be looking at the 'net profit' per new resident, not the gross revenue.

i.e. these people create costs for the state too. Lower than average, because they're working age and able bodied. But they ain't free.
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Working age and able bodied people tend to create these expensive creatures called children. They require lots of tax revenue to educate.
 
SeamusMcFly said:
Confused by why anyone would consider moving Gillette.
If Gillette were going to move, it was a decade or more ago, and the move would have been to Ohio.

We're glad they're still here I thought. I am anyways.
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Yes. I think maybe it was the Gillette surface lots that were the concern. Would be good to see some infill there to mesh with the city streets.
 
CSTH said:
I think you probably mean incremental revenue from sales made in MA? Like - they're going to have revenue in MA either way, and its hard to imagine that it would change that much whether they have an HQ here or not...(and all those sales pay sales tax too btw).

And your probably mean income tax, rather than gross salaries...otherwise these might as well be state employees.

Etc.
Click to expand...

So the point would be to come up with a simple equation that could be codified and applied to other companies that took into account the net inflow of money into the state, not for a 1-1 tax credit for net inflow but some percentage as either a tax deduction or credit.

Say Amazon makes $1 Billion in gross revenue in the state of Massachusetts and pays $5 Billion in salaries to Massachusetts residents. That means a net influx of $4 Billion (not counting other capital investments). Those are all numbers that Massachusetts already has or could have from sales tax payments (pending agreement on third party sellers) and from payroll numbers through the income tax and withholding.

Versus a company which has revenue of $1 Billion in the state, and pays just $500 million in salaries. At first pass that would be seen as a great employer providing a lot of jobs. But that is a company that is taking money out of the Massachusetts economy (not counting capital investments) so it shouldn't be given any tax breaks except maybe on those capital investments. Maybe they are providing a valuable product or service, so they shouldn't be penalized. But if you are looking out for the long term growth of the local economy then you need money coming in and not going out.
 
CSTH said:
You should be looking at the 'net profit' per new resident, not the gross revenue.

i.e. these people create costs for the state too. Lower than average, because they're working age and able bodied. But they ain't free.
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Not really. If you're keeping existing residents or college students from leaving, that counts. If people are getting higher paying jobs than they had previously, that counts. If you're able to get more federal funds as a result of greater population growth and infrastructure needs, hypothetically that counts too. There's also the ancillary effect on other businesses perhaps increasing their profits.
 
SeamusMcFly said:
Confused by why anyone would consider moving Gillette.
If Gillette were going to move, it was a decade or more ago, and the move would have been to Ohio.

We're glad they're still here I thought. I am anyways.

The USPS I get 100%, but have no clue why anyone would want to or think we could move Gillette without just losing the bulk of those jobs.
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Seamus, I did not make myself perfectly clear. My bad.

Not out of BOSTON. Out of Fort Point Channel. Those low slung acre-eaters are a huge opportunity cost to the city/commonwealth.

Forget about Suffolk Downs for Amazon. Suffolk Downs for GILLETTE/US POST OFFICE. Or, I heard Gillette needs a body of water for their manufacturing process - - put it on Chelsea Creek or the Mystic River. Just FREE up Fort Point Channel for the billions and billions of dollars of development that is currently wasting.


.
 
If there are "billions and billions" in opportunity then someone can make a billion dollar offer to move them out. Even then it might be a wash if it costs a billion to tool up a new facility and they end up taking up real estate wherever they go.
 
So it seems Marty is going with Suffolk Downs?

That not only sounds depressing, it's a head shaker if you know what i mean.

Should we begin to prepare for Amazon choosing DC, Philly or

(gulp) Baltimore....
 
odurandina said:
So it seems Marty is going with Suffolk Downs?

That not only sounds depressing, it's a head shaker if you know what i mean.

Should we begin to prepare for Amazon choosing DC, Philly or

(gulp) Baltimore....
Click to expand...

I've come around to the conclusion that not getting Amazon wouldn't be the tragedy for Boston that it would be for other cities.

Boston will be getting the 50K high paying tech jobs over the next 15 years anyway. It will be in a multitude of companies - - not just one behemoth. Relying on one behemoth and becoming a "company town" isn't long-term healthy for a city's ecosystem. Of course, if Amazon were to beg and plead for Boston and come here without extracting megabucks from the taxpayers, I wouldn't look the gift horse in the mouth. But is it worth a mega-ransom? Not for Boston, it isn't.

A Baltimore or Cleveland, etc. need the lottery win. Boston already is on track to grow its 21st century jobs.

I'd much rather have the deeper bench than the one diva.

Now, in the words of Bill Belichick - - "Do Your Job" and build the freakin' N-S Rail Link and clear out Fort Point Channel from the low slung warehouses. Let's get on with it..
 
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shmessy said:
I've come around to the conclusion that not getting Amazon wouldn't be the tragedy for Boston that it would be for other cities.

Boston will be getting the 50K high paying tech jobs over the next 15 years anyway. It will be in a multitude of companies - - not just one behemoth. Relying on one behemoth and becoming a "company town" isn't long-term healthy for a city's ecosystem. Of course, if Amazon were to beg and plead for Boston and come here without extracting megabucks from the taxpayers, I wouldn't look the gift horse in the mouth. But is it worth a mega-ransom? Not for Boston, it isn't.

A Baltimore or Cleveland, etc. need the lottery win. Boston already is on track to grow its 21st century jobs.

I'd much rather have the deeper bench than the one diva.

Now, in the words of Bill Belichick - - "Do Your Job" and build the freakin' N-S Rail Link and clear out Fort Point Channel from the low slung warehouses. Let's get on with it..
Click to expand...

Boston is a big enough city that it will never be a "company town" so I think the entire premise of this post is off-base. As you pointed out, we already have a healthy and diverse economy so Amazon's leverage would be diminished (though still large - no getting around that).

While also true that Boston doesn't need Amazon as much as other cities, it would still have a massive positive impact on our local economy. Having a huge pool of tech talent in the local area would lead to more tech companies moving to Boston. There would also be more potential for Boston-based startups fed by the larger pool of talent.
 
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