Amazon’s Selection of Long Island City Not Tied to Opportunity Zone Program, But Amazon Still Expected to Receive New York Incentives
When Amazon announced, back in November 2018, that its second headquarter location would be partially located in Long Island City (Queens), many speculated that its selection of Long Island City might have been related to the site’s designation as a Qualified Opportunity Zone under the Tax Cuts and Jobs Act of 2017 (TCJA). The TCJA provides significant tax and economic benefits for investors, real estate developers and fund sponsors through the Opportunity Zone Program. Qualified Opportunity Zones (QOZs) were designed to spur long-term growth and economic development in economically distressed neighborhoods through tax incentives. Since enactment, Qualified Opportunity Funds (QOFs), the instrument to invest in these zones, have become a very hot topic.
Turns out, the selection of Long Island City was not related to the Opportunity Zone Program. A spokesman from Amazon said that “We will not be using the opportunity zone on this project.” See Amazon Says It Won’t Use Opportunity Zone Tax Break in Queens. While Amazon may not be benefiting from this program, it is expected to receive a number of significant benefits from various New York State and local incentives, including up to $1.2 billion from the New York State Excelsior Jobs Program and $325 million from the Empire State Development program based on the square footage of buildings occupied over the next ten years. Amazon also expects to receive significant benefits from New York City’s Industrial & Commercial Abatement Program (ICAP) and New York City’s Relocation and Employment Assistance Program (REAP). Details regarding these benefits are available from Amazon and the New York State Empire State Development website.