Gothamist
A non-profit newsroom, powered by WNYC.
Gothamist
Listen Live
News
Wait, There Are Even More Tax Breaks Possible For Amazon's Queens HQ
By
Anjali Kamat
Published Nov 16, 2018
Modified Nov 16, 2018
Share
FacebookTwitterRedditEmail
Never miss a story
Email address
By submitting your information, you're agreeing to receive communications from New York Public Radio in accordance with our Terms .
Mark Lennihan/AP/Shutterstock
By
Anjali Kamat
Published Nov 16, 2018
Modified Nov 16, 2018
Share
FacebookTwitterRedditEmail
We rely on your support to make local news available to all
Make your contribution now and help Gothamist thrive in 2026. Donate today
Gothamist is funded by sponsors and member donations
Amazon’s expansion into Queens and the location [pdf] of its proposed new headquarters in Long Island City make it eligible for a lucrative new federal tax break included in the Tax Cuts and Jobs Act signed by President Trump in December 2017. The tax incentive was intended to bring economic development and jobs to selected low-income communities across the country, called “Opportunity Zones.”
The waterfront site known as Anable Basin in Long Island City, where Amazon’s new headquarters are to be built, is one of 306 census tracts in New York City recommended by Governor Andrew Cuomo in April and then certified as Opportunity Zones by the Treasury Department.
Yet the median income in Anable Basin is $138,000, and a study by the Urban Institute rates it as one of the most rapidly gentrifying areas in the country.
“This hardly seems like an area that is in need of federal incentives to grow economically,” Brett Theodos, senior researcher at the Urban Institute and one of the authors of the study said.
Less than a mile away is the country’s largest public housing project, the Queensbridge Houses, which has a median income of just over $15,000 and a poverty rate of nearly 50 percent. The Opportunity Zone program required states to select a quarter of eligible low-income areas, but also gave them the flexibility to choose up to 5 percent [pdf] of their recommendations from wealthier areas that are “contiguous to a low-income community.” The site of Amazon’s proposed new headquarters is one of 14 “contiguous” tracts selected in the city.
The list of eligible Opportunity Zones across the state was developed by Empire State Development Corporation earlier this year, in consultation with city and state agencies responsible for economic development and affordable housing. The ESDC did not respond to queries about the criteria for selecting this particular area as an opportunity zone, but in September Eric Clement, senior vice president at NYC’s Economic Development Corporation, said it recommended areas based on an assessment of both “need and growth potential,” adding that the agency was “very pleased” with the final zone designations.
The idea behind creating these tax-advantaged zones, promoted by Silicon Valley billionaire and Napster founder Sean Parker, is to incentivize wealthy Americans who have substantial capital gains to invest some of those profits in poor communities. In return, they can defer paying taxes until 2026 and even get a reduction on the taxes they owe. If they hold that investment for at least ten years, any profits from selling an opportunity zone investment will be entirely-tax free.
The deal bringing Amazon to Queens has already been met with widespread criticism from New Yorkers, primarily for the cost to local taxpayers. Together, the city and state have offered nearly $3 billion in tax incentives to lure the world’s third-largest company to New York, according to figures announced by Cuomo at a joint press conference Tuesday with Mayor Bill de Blasio. But these numbers do not include the potential federal benefits that Amazon could reap from locating its secondary headquarters in an Opportunity Zone.
It’s hard to quantify how much Amazon could save from being in one of these zones, but as the company builds its new headquarters (estimated at four million square feet, according to the Memorandum of Understanding with New York state and city officials), tax lawyers say they could access significantly cheaper financing by setting up an Opportunity Fund for the project. Amazon could, for example, invite investors to put their capital gains into the fund to finance the new project, similar to what several real estate developers are already doing for dozens of other Opportunity Zone projects.
“It would be kind of silly not to take advantage of being in an opportunity zone,” said one tax attorney, who declined to be named because the details of how Amazon might structure its financing are yet to be finalized.
If Amazon were to use its own capital gains in the fund, it could defer paying taxes on those gains until 2026. As for using investors, they could theoretically be anyone with capital gains, including Amazon CEO Jeff Bezos, who could get a significant tax break if he invests in the new headquarters using his personal gains, which might simply involve selling some of his Amazon stock.
Amazon did not respond to requests for comment.
Tagged
amazon
jeff bezos
long island city
opportunity zones
queens
Anjali Kamat
Read more
Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
MORE news
After Trump defunding, thousands losing rental assistance in NYC may finally have relief
The Trump administration issued new guidance outlining a plan to replace expiring rental assistance vouchers with a new program.
By
David Brand
Published Oct 6, 2026 at 6:30 a.m. ET
Blind man dismissed from grand jury duty can sue NY for discrimination, judge rules
Albert Elia accused officials of "systemic discrimination" against blind people looking to serve on juries.
By
Samantha Max
News
Blind man dismissed from grand jury duty can sue NY for discrimination, judge rules
Albert Elia accused officials of "systemic discrimination" against blind people looking to serve on juries.
By
Samantha Max
Gatorade recall affects drinks sold in New York and New Jersey
By
Giulia Heyward
Gov. Hochul declares upstate NY measles outbreak a ‘disaster emergency’
By
Caroline Lewis
NYPD detective forced to retire after false statements in Brooklyn investigation
By
Charles Lane
Never miss a story
Catch up on the most important headlines with a roundup of essential NYC stories, delivered to your inbox daily.
Sign upEmail address
By submitting your information, you're agreeing to receive communications from New York Public Radio in accordance with our Terms .