Point At Issue: What The Amazon-NYC Deal Fallout Means For Activism

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On Nov. 13, 2018, technology giant and the most valuable public company in the world, Amazon announced its plans for new headquarters. New York City and Arlington were chosen are the two cities for the new headquarters. Amazon was supposed to invest $5 Billion and create more than 50,000 new jobs across the two headquarters, with more than 25,000 employees each in New York City and Arlington.

The specifics of the location were detailed in the press release. The headquarters in New York City was going to be in Long Island City, in a 4 million square feet energy-efficient office space with the provision of expansion to 8 million square feet. The headquarters were also supposed to generate an estimated incremental tax revenue of more than $10 billion over the next 20 years as a result of Amazon’s investment and job creation.

According to Amazon’s press release, the company was going to “receive performance-based direct incentives of $1.525 billion based on the company creating 25,000 jobs in Long Island City,” which also included a “refundable tax credit through New York State’s Excelsior Program of up to $1.2 billion calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to $48,000 per job for 25,000 jobs with an average wage of over $150,000; and a cash grant from Empire State Development of $325 million based on the square footage of buildings occupied in the next 10 years.”

Initially, it seemed definite. In a press conference on Nov. 13, 2018, Governor of New York State, Andrew Cuomo, with Mayor of New York City, Bill De Blasio, alongside him, announced: “This is the largest economic initiative that has ever been done by the city or the state or the city and the state together, believe it or not….This is up to $3.6 Billion investment by Amazon, 25,000 to 40,000 direct jobs, an average salary of over $150,000….The number that we focus on, is the number of direct and indirect jobs because you create that nucleus of direct jobs, but there are then indirect jobs that are always created, that’s estimated as 107,000 jobs. Total economic impact $186 Billion.” (More statistics of the deal can be found here)

At the time, Mayor de Blasio had said, “This is a giant step on our path to building an economy in New York City that leaves no one behind. We are thrilled that Amazon has selected New York City for its new headquarters,” said Mayor de Blasio. “New Yorkers will get tens of thousands of new, good-paying jobs, and Amazon will get the best talent in the world. We’re going to use this opportunity to open up good careers in tech to thousands of people looking for their foothold in the new economy, including those in City colleges and public housing. The City and State are working closely together to make sure Amazon’s expansion is planned smartly, and to ensure this fast-growing neighborhood has the transportation, schools, and infrastructure it needs.”

The announcement of the deal came with opposition from many groups. The main point of contention in this proposed deal was the tax cuts that Amazon was stated to receive. Amazon was slated to receive up to $2.2 Billion in performance-based incentives, based on the incremental jobs that the company would create each year. That number was actually found out to be around $3 Billion, which included $1.7 Billion from the state and $1.3 Billion from the city. 

The Association for Neighborhood and Housing Development (ANHD), said in a statement that “A deal created to fund one of the largest mega-projects in New York City’s history without any public process, input, or deliberation not only disempowers the very communities that will be most impacted but entirely erases their agency and their voices.” Even the location of the headquarters in Long Island City, next to the nation’s largest public housing project, where 60 percent of its residents relies on food stamps, would have made the headquarters a symbol of inequality.

In a joint statement, New York State Sen. Michael Gianaris and New York City Councilman Jimmy Van Bramer, Democrats who represent the Long Island City area, said in a joint statement, that “New Yorkers have real unmet needs from their government. Our subways are crumbling, our children lack school seats, and too many of our neighbors lack adequate health care. It is unfathomable that we would sign a $3 billion check to Amazon in the face of these challenges.”

The concern of most activists and organizations in their opposition to the deal was the lack of transparency and local community involvement in the deal. Lena Afridi, the director of economic development policy at ANHD, said, “Nobody checked in with frontline communities and whether they wanted these gigantic corporations in their community.”

The deal fell through. Amazon released a statement on 14 February, 2019, stating :“While polls show that 70% of New Yorkers support our plans and investment, 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 with the project we and many others envisioned in Long Island City.”

The statement does not mention any recognition of their own faults, nor does it have any mention of working with local communities. In his criticism of Amazon, Mayor de Blasio, said, “Amazon seemed unwilling to bend or even to talk in earnest with the community about ways to shape their project. They didn’t want to be in a city where they had to engage critics at all.”

In the case of a tech giant like Amazon, it didn’t make sense for the tech company to ask for subsidies when other tech giants like Google have called New York home, without the need for tax cuts. The fallout of the deal just goes to show how corporations can and should be held accountable. Income inequality is already a cause of concern in the world at the moment, and corporations like Amazon need to work with communities towards bridging that gap. 

It also means that grassroots activism and the voice of the local communities are factors that any corporation has to take in consideration before they work on deals that benefit their corporate machinery. The fallout of the deal just goes to show that with a unified voice, large corporations can be held accountable. And they should be.