February 14, 2019; New York Times
Amazon said that it just cannot work with those pesky New Yorkers who wanted the company to swear off union-busting in return for $3 billion in tax abatements and other sweeteners related to its choice of Long Island City in the borough of Queens as one of two new corporate headquarters.
“A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward,” Amazon said in a statement.
And good for you, New York, for worrying about the longer-term effects of these kinds of deals on communities and workers. Among the activists that came out to engage in posing the challenges that so irritated Amazon were unions and housing and transit advocates.
Mayor Bill de Blasio and Governor Andrew Cuomo, who had been what was a rare alliance for them around bringing the company to New York, had very different reactions. Cuomo blamed it on the newly emboldened left wing of the Democratic Party, though he conceded that Amazon has not done much to sell the deal. Mayor de Blasio said, “We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world. Instead of working with the community, Amazon threw away that opportunity.”
The New York Times reported that “some unions supported the deal, and even those who had been opposed appeared willing to work with Amazon if the company agreed to not actively work against the unionization of its employees in New York.” But, “an Amazon representative, during one City Council hearing, pointedly said the company would not agree to such terms.”
Locals noted the chutzpah on display. “Like a petulant child, Amazon insists on getting its way or takes its ball and leaves,” said Senator Michael Gianaris, a Democrat, whose district includes Long Island City and who started as a proponent of the plan, which was to have included 25,000 jobs. “The only thing that happened here is that a community that was going to be profoundly affected by their presence started asking questions.”
Councilman Jimmy Van Bramer of Queens, who also switched sides along the way, said, “I want the deal to be scrapped in its entirety…they want to crush unions. They want to work with ICE. They want to bypass community review. They want to take giant subsidies. I don’t see them changing one bit and so, yeah, they’re not welcome here.”
NPQ’s Steve Dubb has been warning about the quality of such corporate incentive-based community development strategies for some time. In “Do Corporate Tax Abatements Belong in Community Economic Development,” he references one report that finds the net benefits of such incentives on local incomes amount to only 22.3 percent of incentive costs. The end result is that the income of those in the lowest income quintiles actually drops as a result of incentive policies. We hope that New York’s response signals a wider shift in this miserable strategy.—Ruth McCambridge