NEW YORK—When Amazon announced that Long Island City had beat out over 200 other cities to win the prize of (co-)hosting Amazon’s second U.S. headquarters (together with Crystal City in Virginia), it was hailed as huge coup and a guaranteed boon to the local economy. But not everyone is celebrating the arrival of Amazon’s 4,000,000 square foot campus and 25,000 promised jobs.
On Jan. 3, New York City Comptroller Scott M. Stringer, and residents of the CityLights co-op, which will be Amazon’s neighbor, gathered to make it known that there may be big losers in this deal.
Initially promised affordable housing—the residents say they’re now being pushed out of their homes by the arrival of the tech giant.
“Now, we love people who come here … but there’s a covenant that must be kept; and that covenant says very clearly: Yes, change comes, and skylines change, but people who built our communities—our pioneers—they must stay, and they must be celebrated for building our city,” said Stringer at the rally.
In 1996, the 42-story doorman building with 522 units, was the first residential high-rise in the waterfront neighborhood. It boasted unobstructed views of Manhattan, Queens, and the East River, tennis courts, a roof deck, and a free fitness center.
The average selling price was relatively low at $35,000 or $43.27 per square foot, according to Curbed New York. But maintenance fees were high since residents needed to carry an $86 million mortgage and a $500,000 ground lease to Empire State Development (ESD). To ease the burden, the city gave residents a tax abatement for 20 years. That abatement has now run out.
The Heavy Burden on CityLights
HAPPENING NOW: Comptroller Stringer speaks in Queens calling for relief to tenants of the CityLights co-op in Long Island City. pic.twitter.com/k9jHToduPq
— Scott M. Stringer (@NYCComptroller) January 3, 2019
On Jan. 2, Stringer sent a letter sent to Mayor Bill de Blasio expressing concern for the plight of CityLight residents. Not only did the tax abatement run out, but the Department of Finance nearly doubled the building’s assessment from $51 million in 2017 to $101 million in fiscal year 2019.
Today, the average unit in the building sells for about $589,000 or $760 per square foot.
The higher assessment means that monthly carrying charges for residents may increase by 60 percent over the next five years, says Stringer.
This puts many long-time residents “in a position where they can no longer afford to remain in their homes,” he wrote to de Blasio.
For over 20 years, CityLights was considered to provide affordable housing for the middle-class. And since the building opened, the neighborhood has seen a lot of positive changes—changes that have attracted large corporations like Amazon.
But Amazon’s arrival in the neighborhood will add to the financial burden, says Shelley Cohen, a CityLights resident.
“The city determines assessed value based on the value of the properties around us; so as the properties around us increase in value, the value of our taxes goes up,” said Cohen.
Tax relief is what the residents want. As Stringer put it, “all we’re asking for is some mitigation to keep the people who made this land so valuable in the first place.”
Priced Out Residents
Part of the residents’ argument is the billion dollars of tax breaks that Amazon will receive for building the new headquarters in Long Island. According to Stringer, currently there is no benefit, no abatement, and no recognition for the efforts CityLights residents have put into the community. And now they’re being priced out, he added.
“When my family and I moved to long Island City decades ago, there wasn’t even a supermarket, let alone a Duane Reade,” said Cohen in a press release.
“If the City and the State can work together to lure Amazon, they can find a way to relieve us of our ground lease,” she added.
According to Stringer’s letter, by the end 2023, residents will “face a property tax bill of $5.8 million at the current valuation—or an additional average monthly cost of neatly $1,000 per unit.”
The first step to resolving this issue, Stringer said is to get Empire State Development and the Department of Finance to come together and make a plan.
