Amazon's arrival in NYC, D.C. area stokes worries among leaders, locals

Nov. 14 (UPI) -- Amazon's plan to split its second headquarters between New York City and the Washington, D.C. area has been met with healthy skepticism by some who wonder how much of its benefits will trickle down to locals.

Tuesday's announcement praised the Long Island City neighborhood of Queens as one that is ready for expansion, has nearby academic institutions and tech sector businesses. Crystal City, Va., called National Landing by Amazon, is near the Pentagon and is one of the nation's major governmental tech hubs. It sits next to Reagan National Airport and is three miles from downtown Washington, D.C.

The online retailer hailed 50,000 new jobs split between the new campuses and, as a result, a lot more cash for the local economies -- promises some feel Amazon might be overselling.

Some experts and executives in locations under Amazon consideration, like Boston and Dallas, in fact, breathed a sigh of relief when their city wasn't chosen Tuesday.

Ari Ginsberg, professor of entrepreneurship and management at New York University, acknowledged that while he understands the skepticism, he said worries about overcrowding and rising rent might be an overreaction.

"Long Island City was chosen because it was prepared to absorb such changes," Ginsberg told UPI, adding it will be several years before the first Amazon workers start in New York. "It's not like you're going to get 25,000 move in all at once. That will be phased and for the foreseeable future, the capacity will be there."

For now, he said, the benefits clearly outstrip the costs. He added that Long Island City was once mainly industrial and the city already was building new housing stock and infrastructure before Amazon started looking there.

"It is not an absolute thing and it won't go on forever. I do see a positive flow to the economy as opposed to the cost."

Other ancillary benefits, like spinoff and support businesses, should also help the area, Ginsberg said.

Still, some of the concerns are valid. Renters will see an increase and it may be harder for some to stay where they are, he said, adding that the area was already pricey and serving a well-heeled population.

Stephen Fuller, director of the Stephen Fuller Institute for Research at Virginia's George Mason University, said the local worries from such situations have often proved to be unfounded.

"Amazon has long coattails," he said, pointing to Amazon's current headquarters in the Northwest. "Seattle was still one of the fastest growing large metropolitan areas last year because of Amazon."

Some residents in the Crystal City area have howled about coming traffic, crowded Metro commuter train stops and other infrastructure problems, Fuller, though, said the area has supported the arrival of about 50,000 new jobs in each of the past three years.

"This is a giant step on our path to building an economy in New York City that leaves no one behind," New York Mayor Bill de Blasio said in Amazon's announcement, joined by Gov. Andrew Cuomo.

"When I took office, I said we would build a new New York State -- one that is fiscally responsible and fosters a business climate that is attractive to growing companies and the industries of tomorrow," Cuomo said.

Other New York City politicians, like Rep.-elect Alexandria Ocasio-Cortez, bristled at Amazon choosing Queens.

"Amazon is a billion-dollar company," Ocasio-Cortez tweeted Tuesday, warning of the $1.53 billion in tax breaks the e-commerce giant gets in return. "The idea that [Amazon] will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here."

The lawmaker, the youngest woman ever elected to Congress to represent New York's 14th District, said her concerns don't stop there.

"Has the company promised to hire in the existing community? What's the quality of jobs + how many are promised? Are these jobs low-wage or high wage? Are there benefits? Can people collectively bargain?" she asked.

Other states that will not house a new Amazon campus are nonetheless eyeing potential spinoff and regional advantages. Some officials in New Jersey, which nominated Newark for HQ2, believe they will see spillover benefits from Queens.

"The fact that Newark was one of the finalists is a reflection of the city's growing appeal and economic strength," said New Jersey State Senate President Steve Sweeney in a statement. "Our close proximity to Queens will generate economic activity.

"We have a regional economy that easily crosses state and municipal boundaries. This underscores the importance of promoting infrastructure improvements that provide vital links between New York and New Jersey."

Fuller said suburban D.C., which once had one of the fastest growing economies in the nation, stagnated because the federal government began to shrink over the last decade.

"The area was highly dependent on federal spending," he said. "Amazon will help with that enormously."

One of the primary concerns in New York and Virginia is that the best-paying new jobs will likely be filled by candidates from out of state, or by present Amazon employees who will relocate to the new campuses. Fuller, though, said there's a larger picture to consider.

"Some of those Amazon jobs will be filled by people already here as they switch employers," Fuller noted. "Amazon hired 2,000 jobs for the web services here last year."

Fuller said the high-paying positions will go to support service industry jobs the Crystal City area is known for.

"Many of those workers will be getting paid two to three times more than other people," he said. "[They] will then spend money that will support other workers in this economy."

Fuller said a study performed by his institute expects roughly 15 percent of the new workers will live in Arlington County, and others will live in D.C. and Maryland -- and they'll be aided by one of the best public transportation systems in the country.

For now, he said he expects people will soon move on from the hoopla of Amazon's announcement and the subsequent phases will have to proceed before the full impact in Queens and Crystal City becomes clearer.