Amazon reconsiders NYC headquarters as opposition builds
The future of Amazon’s planned New York City expansion could be in limbo, thanks to a brewing fight between Gov. Andrew Cuomo and the newly Democratic-controlled state Senate.
The e-commerce giant is reportedly reconsidering its plan to build a second headquarter in New York City, following a flood of opposition from some city and state officials, as first reported by The Washington Post.
Both Amazon and The Washington Post are owned by Jeff Bezos.
In a statement to FOX Business, an Amazon spokesperson said the company remains "focused on engaging with our new neighbors." And citing two people familiar with the matter, The New York Times reported the article had "gone too far" and that Amazon has no active plans to back out.
Whether it’s building a pipeline of local jobs through workforce training or funding computer science classes for thousands of New York City students, we are working hard to demonstrate what kind of neighbor we will be," the spokesperson said.
The company has yet to lease or purchase office space for the project, so it would be relatively easy for Amazon to withdraw from its commitment. The Post reported that internally, executives are weighing whether to "reassess" the situation and explore other options.
“The question is whether it’s worth it if the politicians in New York don’t want the project, especially with how people in Virginia and Nashville have been so welcoming,” said one person familiar with the company’s plans, according to the Post.
On Monday, the Democratic majority in the state Senate selected Sen. Michael Gianaris of Queens, a noted critic of the clandestine, $3 billion Amazon deal, to the Public Authorities Control Board, which could be the deciding force behind the development plan for Amazon -- and if it's presented with the plan, will have the power to veto it, as first reported by The New York Times.
"The deal that is before us would be horrible for New York and horrible for the country and set the precedent of giving $3 billion to the wealthiest corporation in the company to pay them to come here, especially when many of us believe they were likely to come anyway," Gianaris told FOX Business during an interview on Tuesday.
Cuomo, who helped to negotiate the deal, will have to decide whether to refuse Gianaris’ appointment; while it’s possible he could reject it, the Times reported that it could create a “protracted” standoff with the Senate leader, Andrew Stewart-Cousins, and the rest of the Democrats.
Gianaris also noted that if his nomination is approved, Cuomo will have to decide whether to present the project before the board -- and possibly risk its rejection.
"Up until now," he said, "the governor has been very intent on avoiding any approvals."
In November, after a year-long contest that left hundreds of cites around the country scrambling to pitch themselves to the e-commerce giant, Amazon said it would split its second headquarters evenly between the New York City community of Long Island City and Arlington, Virginia.
The decision was made public after closed-door meetings between Amazon officials and New York state and city officials, including Cuomo and Mayor Bill de Blasio. But several New York lawmakers and city council members have since criticized the $3 billion deal, which they say is not only bad for local residents, but sets a bad precedent of huge corporations taking advantage of cities.
"Look this is a project that would have a massive impact on my local community but on the entire state," Gianaris said. "It’s important that we get it right."
Amazon previously said that it will receive “performance-based direct incentives” of $1.525 billion based on its promise to create 25,000 high-paying jobs in the area. It also includes a tax credit of $1.2 billion over the next decade, in addition to another grant of $325 million tied to the square footage Amazon occupies at the time. (In return, Amazon has promised to invest at least $2.5 billion in the New York City area. It also has said HQ2 will create a plethora of high-paying jobs).
But during an interview with WAMC, Cuomo called the project the "greatest economic transaction in 50 years in this state," according to a spokesperson who sent a copy of the transcript. The Democratic governor defended the $3 billion incentives granted to Amazon, which he said were necessary because New York is the "highest-taxed city and state in the nation."
"If we did not give the $3 billion, we would not get the $30 billion," he added. "And that is a question of economics."
As far as Gianaris and the Public Authorities Control Board, Cuomo denied that the New York senator could legally put a stop to the deal. The board, he said, was created to make sure the public authority has the necessary funds to undertake certain projects and have a "fidicuiary duty" to make sure the entity has the financing available.
"If he were doing his fiduciary duty the only question would be does ESD have the money," Cuomo added. "And ESD has the money."
Gianaris -- who said his end goal is to see the deal "thrown in the garbage" -- isn't alone in his quest to stop the project, however. In the months since it was announced, New York City Council members have amped up their criticism of the deal for the new Queens campus -- which will supposedly bring significant economic perks -- in exchange for $3 billion in incentives.
Last week, city council members questioned whether Amazon -- which in September briefly hit $1 trillion in value -- or CEO Jeff Bezos -- the world’s richest living person -- really needed the tax incentives, during the second of three public council hearings regarding Amazon’s HQ2 deal.
“I asked this in the first hearing,” council member Corey Johnson said. “Why do you need our money? We have 63,000 people sleeping in homeless shelters tonight in New York City, we have subways that are falling apart, we have schools that aren’t getting the money they deserve, we have public housing that is crumbling around us….Don’t you think there’s a better way for us to spend $3 billion?”
Amazon, for its own part, has not taken the threats and criticisms silently. During the city council meeting, Amazon officials delivered their own slightly veiled counteroffensive. Amazon’s vice president for public policy, Brian Huseman, noted that the company still has a say in whether it expands in New York or not, according to the New York Times.
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“We were invited to come to New York, and we want to invest in a community that wants us,” he told the Council, as reported by the Times. He finished by saying that Amazon wanted to “be part of the growth of a community where our employees and our company are welcome.”
This story has been updated to reflect new developments.
