Almost from the second Amazon announced it would be opening a new campus on the Long Island City waterfront, talk began that this could be just the thing to revive Mayor Bill de Blasio's long-stalled Brooklyn-Queens Connector streetcar project. Friends of the BQX, the developer-funded nonprofit set up to promote the light rail line, issued an immediate press release declaring that Amazon's arrival meant it was time to "fast-track" the project. Word of a city-backed "infrastructure fund" for the project's environs sparked speculation that some of that cash could be dedicated to helping revive the streetcar. And last week, Queens Borough President Melinda Katz threw in a demand that Jeff Bezos should pay out of his own pocket for the streetcar — which Katz redubbed "QBX" in a bit of pandering to borough pride.
A look at the numbers, though, shows that even if Amazon's arrival has perked up interest in BQX, it won't do much to solve the project's biggest problem: money. Nearly three years after it was first announced, the streetcar plan is still saddled with a budget hole in the billions, and no easy way to fill that gap.
To recap briefly: When de Blasio first announced the BQX in his 2016 State of the City address, he declared that the project would pay for its own construction cost, then estimated at $2.5 billion, via a method called "value capture." The city would sell bonds to pay for construction, then pay them off with the increased property taxes that would pour in as people flocked to a newly streetcar-bedecked waterfront.
Immediately, though, experts in transit and value capture began questioning whether the city's plan would pencil out. “To get the value gains they’re talking about, you need major changes in intensity use,” Columbia University Ph.D. candidate Lauren Fischer, who's extensively researched transit and property values, told the Village Voice in February 2017. “Not just taking a four-story building where one story is not used as efficiently — you need that four-story building to become a fifteen-story building.”
And for value capture to work, and not just cannibalize tax money the city would get regardless, any new development would need to occur thanks solely to the streetcar: If the BQX didn't single-handedly boost property values in waterfront neighborhoods by 17%, the city would have to dip into its general fund to pay the difference.
De Blasio's Economic Development Corporation replied that it would soon issue a detailed financial plan for how value capture would work, and how much of the revenue would be "net new" as a result of the streetcar. The scheduled release date came and went, and no study appeared; this August, EDC finally issued a brief notice buried in a design report that included no specifics on methodology, but that did estimate that only about half of the projected $2.7 billion price tag would be covered by value capture funds. By then, de Blasio had already moved on to hoping that Donald Trump would bail out BQX with federal funds. (The mayor’s office confirms that this remains its plan, but did not provide details about what federal funding sources might be available.)
While Amazon's presence may heighten interest in adding more Long Island City transit options, it won't do much to feed the value capture kitty. If anything, Amazon-spawned development may boost waterfront property values to the point where no amount of scenic trolleys can increase tax revenues any further. “There’s not a whole lot of value to be ‘created’ in these areas where land is already very expensive, near its maximum value the market will pay,” Fischer tells Gothamist.
The one potential pool of cash that the Amazon deal would provide is that "infrastructure fund," which according to the city's Memorandum of Understanding with the company can be used for "streets, sidewalks, utility relocations, environmental remediation, public open space, transportation, schools and signage" elsewhere in the neighborhood. As Amazon won't pay property taxes on its state-owned land, the company will instead make payments in lieu of property taxes, or PILOTs, to the city; half of these, in turn, will be siphoned off and placed in the infrastructure fund.
How much will this amount to? City Hall estimates $650 million over the next 40 years, according to figures the mayor's office provided to Gothamist's Jake Offenhartz. Much of that will be backloaded, though — Amazon doesn't even project having most of its 25,000 employees in place until 2024 — and streetcar contractors tend to look at you funny if you ask to put off paying their invoices for several decades. The actual amount of present-day infrastructure work that the PILOT money could fund would be more on the order of $200 million to $300 million, depending on interest rates; that's nowhere near enough to make BQX viable on its own, even if none of this money were used for other items like streets and sidewalks.
Amazon officials did not respond to a Gothamist request for comment.
In the weeks since the Amazon announcement, there's been tons of debate about how much of a strain the new headquarters will put on the transit infrastructure. City councilmember Jimmy Van Bramer has been at the forefront of complaints that Queens subway trains are already stuffed to the gills, while Gothamist contributor Aaron Gordon wrote in his transit newsletter Signal Problems that a few thousand Amazon workers probably won't make the subways significantly more unbearable than they already are.
Either way, though, the BQX will remain mythical until somebody finds a couple billion dollars in cash lying around for public projects — and right now, the Amazon cash flow is going in the opposite direction. Asked about Katz’s idea to try to soak Bezos for BQX cash, Van Bramer says he “completely disagrees”: “If Amazon has $2.7 billion they’d like to throw around, they should spend it on our public housing, crumbling subways, or overcrowded schools. The BQX is the least of my concerns. I don’t understand the fixation on this overpriced proposal that might not even put a dent in our community’s transportation deficit.”
In the meantime, Fischer suggests that the city might want to focus on less expensive solutions for getting Amazonians to work: “Amazon should represent an opportunity to throw out the streetcar line and go for a mode — bus rapid transit? rail with a dedicated right of way? — that does a better job of moving people.”