News that Amazon.com is reconsidering putting a second headquarters in New York City has dealmakers wobbling their heads. According to the news, a wave of public outcry and political maneuvering may well force the company to look elsewhere.
Amazon's highly publicized search for a second headquarters appeared to be over as billionaire Jeff Bezos' company seemed all set to create 25,000 jobs at a new campus in New York City. Real estate professionals close to the potential deal were anticipating new life being breathed into the stagnant NY market. Then a 29-year old congresswoman named Alexandria Ocasio-Cortez (above) pointed out what should have been obvious from the start. The subsidies and sweet offers New York offered Amazon were just too sweet. A political firestorm ensued, and the community lashed out at local politicians and dealmakers.
Governor Andrew M. Cuomo (D) and Mayor Bill de Blasio (D) have been singing the praises of the Amazon deal, calling it an economic triumph. At the end of the day, citizens of the state do not feel like giving giant subsidies to the world’s most valuable company at this moment in time is a good idea. Amazon has now hired an independent PR firm to try and sooth the deal over, but Ocasio-Cortez's support base is solid. Sen. Michael N. Gianaris (D-Queens), appointed recently to the Public Authorities Control Board that will decide on the deal, has accused Amazon of extortion the past. The deputy senior majority leader was cited by the Washington Post commenting:
“Amazon has extorted New York from the start, and this seems to be their next effort to do just that. If their view is, ‘We won’t come unless we get three billion of your dollars,’ then they shouldn’t come.”
Many see this Amazon-NY struggle as one of populism versus the corporate elites, some calling the deal a "tipping point" in a kind of class struggle.
Back in November Amazon dangled a huge carrot in front of New Yorkers and Long Island City residents by promising salaries of $150,000 a year to as many as 50,000 workers. The Jeff Bezos run company had originally planned a single headquarters but instead split the new development in two in between New York and Long Island. Now Amazon is threatening to pull out.
At the end of the
Under the tax overhaul signed into effect by President Donald Trump last year, investors in opportunity zones can defer payments of capital gains taxes until
Alexandria Ocasio-Cortez and her constituents are bringing to light much of the hyperbole the Amazon PR teams have set in motion to create this deal. This Good Jobs First report also reveals Amazon PR people shorting potential workers by almost $40,000 a year. The "rabbit hole" of Amazon's deal seems endless now that Freedom of Information Act disclosures
In conclusion, big companies taking huge subsidies for dangling the carrot of more jobs has cost Americans untold billions in potential revenue. Companies like Apple, Amazon, Facebook, Google, and Foxconn promise jobs, but those jobs end up costing taxpayers more than they are worth. This The Guardian story peels back the veil on this aspect of corporate dealmaking. The companies typically overstate the positive impacts like the number of jobs and the overall community aspects, and they end up paying little or no tax at all. The Guardian report shows that local schools and other infrastructure in need of financial help, suffer an inestimable loss on account of the long tail of corporate subsidies. No wonder some experts are calling this high profile Amazon case a battle between populism and the corporate elites.