City Council Grills Amazon On Runaway Subsidies And Anti-Union Stance

Protesters drop a banner during the City Council's hearing on Amazon's plan to build a massive campus in Long Island City on Wednesday

New York’s pro and anti-Amazon forces went at each other like cats in a bag at a City Council hearing on Wednesday. To which we’ll add, Amazon-style, that if you bought that simile, you might also like: they went at it like rabid weasels locked in a cardboard box trapped on a stoop all weekend.

It was the second hearing to discuss the company’s plans to build an enormous campus in Long Island City, and the political strategies the two sides will be pursuing came into focus.

The Council’s anti-Amazon forces, led by speaker Corey Johnson and Queens rep Jimmy Van Bremer, hammered the economic narrative promoted by Governor Andrew Cuomo (and to a lesser degree, Mayor Bill de Blasio) since the announcement of the deal. Cuomo has said repeatedly that Amazon will pay more than $27 billion in taxes to the city and state over 25 years, which makes the government’s investment of $3 billion dollars in subsidies more than worth it.

But Johnson questioned the governor's math.

When an Amazon executive said the commonly cited numbers came from an independent economic impact study, Johnson asked her, “Who paid for that study?” She didn’t know so he answered his own question: “The city and the state paid for that study and the city and state negotiated this deal. It's not an independent study.”

Johnson then cited a freshly-released study he had ordered up from the Council’s Committee on Finance. It said that if Amazon builds out all 8 million feet of its corporate campus in Long Island City in the next 15 years, the city could be on the hook for an additional $450 million in tax breaks. And if the company hires 40,000 instead of 25,000 workers, the city’s Relocation and Employment Assistance Program would need to shell out $47 million more than expected.

Amazon will be able to add those incentives to the roughly $1.7 billion in tax breaks and grants offered by Empire State Development, the state's economic development arm. Johnson pointedly started the hearing by noting that officials of the state agency had been invited to the hearing but had declined to attend.

James Patchett, president of the city’s Economic Development Corporation, which is leading the city’s efforts on Amazon, stressed that the company would pay market rate for the properties it will occupy, and that it would receive no special “discretionary” incentives besides those that are already on the books. Patchett also described the deal as an unalloyed win. “In addition to diversifying the economy, Amazon is the jobs and income generator New York needs to remain a model 21st century city,” he said.

Opponents also criticized Amazon for what they described as its anti-union policies.

Brian Huseman, the company’s vice president of public policy, told the Council that he could not support labor “neutrality” for Amazon’s workers in Long Island City. The term essentially means that a company does not aggressively fight employees who want to form a union.

Speaker Johnson then asked Patchett whether, during negotiations, he asked Amazon to practice labor neutrality. Patchett could not say that such a request had been made, which allowed Johnson to lash into the deal as anti-union.

At one point, protesters interrupted the proceedings by unfurling a banner that read, “Amazon delivers lies.” As a protester was removed, he cried out, “Oh c’mon, you don’t let your workers organize!”

Outside, members of New York's construction unions rallied in support of the Amazon deal, which they say will create jobs for their members.

Amazon, one of the largest companies in America, has no union and insists it doesn't need one. However, workers at the company's Staten Island warehouse have announced their intention to organize. A man who claimed be one of them stood outside City Hall protesting conditions at the warehouse. His sign read, "Amazon Doesn't Let Me Pee."

Amazon countered by trumpeting its rollout of local initiatives. Huseman told the Council, “I'm pleased to announce today that we've teamed up with LaGuardia Community College, the City University of New York and the State University of New York to create a pathway to employment in cloud computing jobs.” Another executive said Amazon would soon be hiring thirty people from the nearby Queensbridge Houses to work in customer service.

The state, city, and Amazon have until March 11 to conduct due diligence to finalize the deal. Speaker Johnson has said that there will be more City Council hearings on the matter.