A modest proposal to get Amazon back into NYC
Posted by John T. Reed on
I have an idea for how Amazon can move to NYC as planned.
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The problem is NYC unions and politicians are sleazy scum. NY State are the same but not as bad.
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The basic deal is the same only Amazon will be able to leave on six months notice.
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Amazon will buy or lease or build as before.
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However, this time, the NY State government will be required to buy the owned buildings from Amazon at Amazon paid for them. This will cost NY state nothing because it is simply moving an asset on the NY state balance sheet from cash to building.
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With regard to leased space, NY state will lease it at fair market value and sublease it to Amazon. Amazon will pay whatever rent Amazon negotiated.
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Here are the new features of the deal:
With regard to buildings owned by the state, Amazon will have the right to terminate the lease on six months notice. Amazon will also have an assignable, renewable call option to buy the building back for whatever they originally paid for it. So in other words, If the scum politicians in NYC start up with the crap again—which they will—Amazon bails out of one or more buildings and gets a sort of golden parachute for doing so in the form of the appreciation of the building since they moved in. That will reduce or eliminate the crap. The basic reason they get away with crap like rent control is the building owners cannot escape. Get Amazon back by making it easy for them to leave if they start getting badly treated.
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Similarly, Amazon can get out of the subleases on six months notice, but they have an option to sub-sublease if that is advantageous to Amazon.
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Can the State of NY get the landlords they lease from to agree to the same deal that Amazon will insist on? No. The landlords will not lease on such terms. Not Amazon’s problem. The State of NY needs to get the best deal they can from the lessor then the State will have to get from the new sublessee who replaces Amazon if Amazon leaves. And if that is not profitable for the State of New York, tough. They should have kept the original deal with Amazon together.
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The basic principle is this new deal would be about the same as the old—as long as Amazon were kept happy. But when NYC restarts the crap, Amazon can again leave NYC with minimal real estate cost.
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Leaving NYC after you hire 25,000 people is not painless. Human employees have roots. But I think this new deal would restrain the NYC political scum from trying to extort more money out of Amazon because of barriers to exit.
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Amazon needs to say, “Okay, we’ll come back, but only on the grounds that we have next to zero structural barriers to exit so if the New Yawkuhs start up with the crap again, we are again out of here.”
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And this could be done partially. If the tough guy politicians start trying to extort again, maybe Amazon moves 5,000 of the 25,000 jobs back out of town to see if that sobers up the political scum. If not, see ya. Wouldn’t want to be ya.
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This is a deal that Trump could not only understand but probably make better. The man knows a little about NYC office space.
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