clock menu more-arrow no yes

Filed under:

Amazon HQ2 tax breaks scrutinized by city comptroller

New, 2 comments

Comptroller Scott Stringer has issued a request to the EDC for information that would help him fact check the numbers behind the deal

NYC Economic Development Corporation

City Comptroller Scott Stringer has publicly decried Amazon’s deal with the city, calling it a “taxpayer-funded entitlement program” in an early December op-ed in the Gotham Gazette. Now, Stringer has issued a firm request to the city’s Economic Development Corporation for the detailed information behind the numbers that sealed the Amazon deal behind closed doors.

On Friday the comptroller requested the EDC return specific information that would help him fact check the assertion that Amazon’s Long Island City development would provide a 9-to-1 return on investment, as well as breakdowns on the refundable tax credits Amazon stands to gain through the Relocation and Employment Assistance Program (REAP) and the Industrial and Commercial Abatement Program (ICAP), the New York Daily News reports.

REAP is a tax credit program originally designed to help attract employees outside of Manhattan’s business core. In his Gotham Gazette op-ed, Stringer says Amazon stands to receive some $900 million in tax credits from the program. By comparison, last year 205 firms shared $32 million in tax credits under the program; but because there’s no cap on REAP, Amazon can accrue $75 million in tax credits from the program in a single year.

The program as it stands also does not require its recipients to meet performance goals, so if Amazon does not deliver on its promise to hire 25,000 employees at an average pay rate of $150,000—and instead hires 25 employees at an average pay rate of $30,000, for example—it can still receive the tax credit.

In the op-ed predating the EDC request, Stringer called for a reevaluation of the program, considering that “our economy is already doing the work of REAP. Indeed, from 2007 to 2017, 83 percent of new jobs in New York City were outside of Manhattan, raising the question of whether the REAP program is needed in a city where businesses are already spreading across the five boroughs on their own.”

ICAP is a tax credit that offers incentives to companies that renovate or build outside of Manhattan to spur economic development. Amazon stands to gain $400 million in property tax abatements from this program, Stringer says.

When an ICAP tax break exceeds $1.5 million, it requires the receiving group to seek at least three bids for construction from city-certified minority- and women-businesses enterprises (MWBE). Because Amazon’s tax break could be nearly 267 times that minimum threshold, Stringer has inquired whether Amazon will be seeking more than three MWBE bids for the project.

Stringer has also requested of the Economic Development Corporation information on its agreement to lease Amazon public buildings, including buildings used by the departments of transportation and education.

The comptroller has requested that the EDC return the information by January 11.