When Amazon announced last year that it was searching for a location for its second headquarters, cities around the country swarmed the retail giant with proposals. Well over 200 municipalities, as a matter of fact, asked the company to grace them with its presence.
Surely Amazon would have a difficult decision to make, with so many parties interested in the promise of high-paying job creation and long-term economic benefits. But the 20 finalist cities were a predictable list of the country’s largest metropolises, and the final decision was the most obvious of all: New York City.
Dozens of New York lawmakers from all levels of government previously signed onto a letter in support of the “HQ2” opening in the city. They got what they wanted, but not a single one of them had any say in the deal that was made, and many are now withdrawing their support.
The deal — which will split the secondary headquarters between Long Island City in Queens and Crystal City, Virginia – illustrates Amazon’s true power. According to several reports, the company expressed concerns about the City of New York’s planning process and the amount of time it could take for the City Council to review and potentially vote against the project. That concern was enough for Governor Andrew Cuomo and Mayor Bill De Blasio to bend over backwards to cater to Amazon.
By agreeing on a General Project Proposal (GPP), the city effectively handed over its control of the Long Island City plot to the state, circumventing the Council and its potential veto. Of the $3.4 billion in tax incentives Amazon will receive, New York will be responsible for more than triple the amount that Virginia will contribute. To give such a generous benefit package to one of the most valuable companies in the world is outrageous, no matter how many jobs and economic benefits are promised.
To side-step the Council, which could have negotiated a more fair deal for taxpaying members of the community, is down right insulting.
Amazon will now avoid paying the taxes that it can certainly afford as the company hovers near a trillion-dollar net value. Those billions that the city will swallow could have been used to bolster the local infrastructure or address the severely overcrowded schools, but instead the Amazon headquarters will be the cherry on top of the overdevelopment and gentrification of Long Island City.
Its contributions to the local congestion won’t be felt by company executives, however, as reports note that the deal even includes a helipad.
But consider for a moment the broader effects of this deal that will spread far beyond the city limits. One reporter suggested that by receiving more than 200 proposals Amazon was able to use them as leverage while negotiating with New York, Virginia and other contenders. Another reporter pointed out that the company now has valuable financial information about all of those cities that it can use to make retail decisions.
In Wisconsin, a similar deal was recently made with tech giant Foxconn which will receive more than $4.5 billion in incentives to build a facility in the state. Aside from tax breaks, Governor Scott Walker even proposed diverting federal funding for ongoing highway projects to fund a new expressway near the Foxconn facility. Walker lost his bid for re-election last week, and many people see that deal as a reason why.
Now, it’s quite convenient that the Amazon deal wasn’t finalized until the week after the elections, isn’t it?
City Council Member Robert Holden represents Glendale, Maspeth, Middle Village, Ridgewood, Woodhaven, Woodside in Queens’ 30th Council District.
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