Real-estate development in New York City involves a lot of political back-scratching. Or, put more favorably, you could say it involves a consultative process between the public and private sectors.
Politicians make asks on behalf of constituencies and interest groups: please build a playground here, use labor from this union, agree to put the apartments you’ve built under rent stabilization. In return, politicians offer things of value to developers. The city can create that value out of thin air by changing the zoning on a piece of land, but sometimes, the value comes from tax abatements not terribly different from the ones Amazon was controversially offered to build a 4 million square-foot campus in Queens. Just ask Donald Trump, who started his real-estate development career with the tax-abated renovation of the Grand Hyatt in Midtown.
Crucially, the more value the city creates for developers, the more it can ask for in return. This has been one of the de Blasio administration’s policy strong-suits: maximizing the amount of affordable housing it claws back in exchange for the development permissions it has handed out for projects like the Domino Sugar redevelopment in Williamsburg.
A key objection to the now-scuttled $3 billion subsidy deal to bring Amazon to Queens was that the quid pro quo was imbalanced: Andrew Cuomo and Bill de Blasio had not negotiated well on behalf of the city, and we were giving Amazon too much for the 25,000 jobs they promised to create. But Amazon proved unwilling to enter into the sort of wide-ranging, permanent negotiation that real estate developers accustomed to dealing with New York politics and politicians routinely do. Instead, the company withdrew; it will continue to lease additional space in the city, as it needs more room for staff here, but it won’t put 25,000 new employees into a new headquarters.
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