New York City Council Holds Hearing to Discuss Amazon Deal

On Wednesday, December 12, the New York City Council Committee on Economic Development held the first of three hearings to discuss Amazon’s decision to locate part of its second headquarters in Long Island City, Queens. The level of public subsidies offered by New York City and New York State to Amazon has raised questions and concerns among some elected officials and city residents. During the hearing, city councilors questioned Brian Huseman, Amazon’s vice president of public policy; Holly Sullivan, Amazon’s head of worldwide economic development; and James Patchett, president and CEO of New York City’s Economic Development Corp.

The announcement in November that Amazon had decided to split its second headquarters between Long Island City and Crystal City, Virginia, concluded a highly publicized search that began in September 2017 with 238 candidate cities and states bidding against each other. The company plans to split operations evenly between the two chosen sites, with more than 25,000 employees in each city. Amazon could receive up to $3 billion in city and state incentives for the Long Island City site.

The deal between Amazon and New York has been met with criticism from local residents, business owners, and elected officials, who cite the lack of transparency of the closed-door negotiations and the state’s decision to avoid the Uniform Land-Use Review Procedure (ULURP) in favor of a General Project Plan (GPP), which will allow Amazon to circumvent public approval of the planned campus.

The subsidies also prompted a critical letter to Governor Cuomo from the American Booksellers Association on behalf of independent businesses in New York, criticizing the use of taxpayer funds to entice an out-of-state mega-corporation. “Rather than using public funds to lure Amazon to open its second headquarters here...we urge you to find ways to support in-state businesses like ours, which are the real engine of the state’s economy,” booksellers and fellow business owners wrote in the letter.

At last week’s hearing, City Council Speaker Corey Johnson questioned Huseman and Sullivan on the decision to “avoid the land use process,” asking whether Amazon would have rejected New York’s proposal if it was required to submit plans for approval through the ULURP process. In response, the Amazon representatives pointed to the Community Advisory Committee formed to facilitate community input on the project, which, as Johnson pointed out, is non-binding and will not have the weight of the law behind it, as community review through ULURP does.

While Huseman contended several times during the hearing that Amazon would bring $9 billion to New York City for $1 billion of subsidies, Council Member Jimmy van Bramer questioned how much the Amazon campus will really cost New York City, as the influx of new people to Long Island City will require investment in the transportation infrastructure, construction of new schools and housing, and hiring more police and firefighters. He asked Huseman if Amazon would be willing to forego the $500 million capital grant “to the richest man in the world” and instead redirect those funds to public housing in Queens. Huseman did not answer the question.

Several of the council members highlighted Amazon’s interference in public policy. Council Member Brad Lander discussed how the company has intervened in governance in Seattle, the site of its current headquarters, including a successful threat to halt new development if the city approved a proposed tax aimed at addressing homelessness, and its lobbying efforts to prevent the passage of gender pay equity laws in Washington. Lander and Johnson both criticized Amazon’s contract to provide facial recognition software to Immigration and Customs Enforcement (ICE).

The next council hearing on the Amazon deal will be held in January.