In New York City’s Long Island City neighborhood, down the road from where Amazon tried ( and failed ) to build a “second headquarters,” a bookstore owner is claiming that, despite solid business, he’ll have to close unless the local government steps in to help.
In his open letter to New York’s politicians, Book Culture owner Chris Doeblin says his four stores (there are three in Manhattan, in addition to the one in Long Island City) face annihilation “soon” unless the government intervenes. His argument for assistance is simple: The stores generate $650,000 in annual tax revenue for the city and state, and his 75 staffers (on a payroll of $1.7 million in 2018) spend “virtually all” their income in the city. In addition to its status as a small-but-mighty economic engine, he adds, “Book Culture contributes simply by being what we are, storefront businesses active in a community.”
If those arguments sound familiar, perhaps it’s because Amazon made similar claims about the benefits it would bring to New York City, albeit on a much larger scale.
Reached for comment via email, Doeblin tells Fast Company that the ideal long-term solution would be “either a private investment or a line of credit/load that is underwritten or provided by the city or state.” He also suggests that the challenges facing his business have accelerated recently, in particular the boosted minimum wage: “In January we hit a new level of payroll expense when $15/hour became NYC law.”
Of course, New York’s state and city governments have a history of offering incentives and other goodies to companies. When Amazon indicated interest in Long Island City as the home of its second headquarters, for instance, government incentives included $1.2 billion in refundable tax credits if the company created 25,000 net new jobs by a certain deadline; the state also offered grants that would ease Amazon’s construction costs. At the time, supporters claimed that the headquarters’ employees would spend lots of money with the community, more than justifying the tax breaks and other sweeteners.
It was a great deal for a huge company—or at least it was before Amazon decided to abandon its plans in the face of messy politics. But what’s on offer for small businesses that generate only a handful of jobs? What’s a company like Book Culture supposed to do in the face of considerable pressure from rising rents and e-commerce?
Will Baskin-Gerwitz, a spokesperson for New York City Mayor Bill de Blasio, declined to discuss any specific incentives or financial help the city might offer a company in Book Culture’s situation, but he told Fast Company that he hopes the store will take advantage of existing programs for small businesses.
Teacupfullofcherries on June 27th, 2019 at 00:00 UTC »
Thank god it wasn't strand books in Manhattan. I would have understood as they are so crazy cheap, but I wouldve been sad.
I bought a first edition copy of silence of the lambs for $5 and a first edition (1 of 2000) copies of Patricia Cornwell's Post Mortem for the same.
A book shop near me is selling the same book for £500
Da-shain_Aiel on June 26th, 2019 at 23:57 UTC »
Sounds like a fair deal. Give everyone the same deal: ~2 billion in tax discounts dispersed over 30 years, on the condition they generate 25,000 new jobs that pay at least $140,000/y
constantino2 on June 26th, 2019 at 22:49 UTC »
this is a bandaid as I see it. If the bookstore is losing money, a cash infusion will only delay the inevitable... (based on the articles premise) Unless there is some sort of business strategy to turn things around, and they only require some investment capital to execute on it... But that is not mentioned in the article.
This is every company ever. Just give us a tax break so we can keep doing business, employing americans, and let them repay you in income tax.
not saying its right or wrong, but you would certainly need to raise the income tax rate to compensate for the loss of corporate tax; and in turn, you'll get asked to raise wages to compensate for the increased income tax...
Theres no free lunch here, Everything has to add up to the sum of the parts, no matter how you dice it. You can manipulate some behaviors with your strategy, prevent outsourcing or whatever, but thats not really relevent to a retail bookstore.
Unfortunately, it sounds like their existing business is not viable, and thats a problem. They will get more sympathy as a book store on r/books; but I expect a very different response if this were a store that sold cell phones or computer printer ink. it would just be "welp, guess their business sucks".
Also, amazon is a bit of a non-sequitor, they offered incentives to amazon because they wanted to attract a thriving business to their city. right or wrong, its why companies offer discounts to new customers, but not existing.