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City Council spars with Amazon, EDC over HQ2 cost concerns

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“This seems like vulture, monopolistic capitalism at its worst,” the City Council speaker said

Protestors held “caution: Amazon lies” signs throughout a three hour City Council hearing on Amazon HQ2 coming to Queens.
Courtesy of New York City Council/John McCarten

Lawmakers and protestors launched a volley of criticism Wednesday at the $3 billion deal that will bring Amazon’s second North American headquarters to Queens, during one in a series of charged City Council hearings scrutinizing the plan.

“Why do you need our money?” Council Speaker Corey Johnson asked one city official and a pair of Amazon executives, referring to the hefty incentive package the e-commerce giant is set to receive from the city and state. “We have 63,000 people sleeping in homeless shelters in New York City, we have subways that are falling apart, we have schools that aren’t getting the money they deserve … This seems like vulture, monopolistic capitalism at its worst.”

Opponents crammed into the packed hearing and silently held highlighter-orange signs printed with “Caution: Amazon lies,” as council members took turns sparring with James Patchett, the head of the NYC Economic Development Cooperation, and Brian Huseman, an Amazon executive, over the deal. Amazon says it could generate $27 billion in tax revenue over 25 years and create 25,000 jobs by 2029—up to 40,000 by 2034.

Council members blasted the officials with a laundry list of concerns including Amazon’s union opposition, its investment in the city, and accusations that city and state officials failed to accurately calculate the costs of bringing the conglomerate to Long Island City.

When officials initially unveiled the HQ2 plan, Amazon was expected to receive some $1.28 billion in tax subsidies through city programs for the new Queens campus. But that figure could actually be $987 million more than anticipated because officials only accounted for the minimum investment that the online retailer is expected to make, according to a report released by the City Council’s Finance Committee Wednesday. Those benefits are on top of the $1.7 billion in tax breaks Amazon would receive through the state.

Council member Daniel Dromm, the head of the finance committee, charged the city with keeping its “head in the sand on the issue” by failing to conduct a thorough review of the credits. He said that “Amazon is reaping the benefit of [the city] not having done that review.” An incredulous Johnson slammed city and state officials for falling short in its review of the project’s costs.

“We announced a deal and we’re celebrating a deal before the city looked at the costs of the deal,” Johnson told the head of the NYCEDC. Patchett pushed back on those claims and disputed the council’s estimates.

A chorus of outraged protesters interrupted Amazon’s testimony and unfurled a pair of banners painted with “Amazon delivers lies” and “Amazon fuels ICE deportations,” referring to the retailer’s work with the federal U.S. Immigration and Customs Enforcement agency. Another protestor used the clamor as a chance to shout down Huseman as he began discussing Amazon’s new shipping facility on Staten Island.

“You’re against unionizing the damn facility, you’re against unionizing the motherfucking facility,” the man shouted from the council chamber’s balcony before Johnson asked he be escorted out.

Huseman went on to indicate that Amazon will oppose attempts to unionize its workers in New York City, flatly answering “no” when Johnson asked if the company would agree to neutrality if the new workers wanted to unionize.

“You are in a union city,” Johnson shot back. “That is not a way to come to our city, a city where 20 percent of our people live at or below the poverty line.”

In an attempt to sweeten the deal for skeptics, Amazon announced that it will fund computer science classes at more than 130 city high schools, establish a certificate program at LaGuardia Community College to help students gain a foot hold in the tech industry, and hire public housing residents to work at a new 30-person customer service center.

Long Island City Council member Jimmy Van Bramer was not impressed.

“Crumbs off the table for a trillion dollar company with the principal owner living with a net worth of over $160 billion,” he told Curbed Wednesday. “[We have] the largest housing development in the United States of America with at least 7,000 residents—to come to 30 jobs—are you fucking kidding me? 30 jobs? I would be embarrassed.”