Amazon’s Threat
Amazon last week fired off a warning shot with “news” that top execs are reconsidering the deal to open half the company’s “HQ2” in Long Island City. Skeptical as we are about the deal, we can hardly blame them.
Of course, it may just be a negotiating ploy: The fact that the story broke in The Washington Post, which is owned by Amazon chief Jeff Bezos, makes it pretty obvious that this was more of a press release than an exposé. Adding to suspicions that the news was staged, Gov. Cuomo rapidly followed up with a finely crafted PowerPoint show reiterating what a good deal he’d struck.
The target is the politicians and special interests who’ve been fighting the deal: some outraged by the $3 billion in subsidies and tax breaks for so wealthy a company, others looking for more handouts or trying to use their leverage to push Amazon to unionize.
The company has used similar tactics in its hometown to fight against laws it sees as unfair — most notably, a special tax on large employers. The golden goose’s threat to go on strike worked: Seattle’s City Council repealed the tax after the company announced it was rethinking local expansion plans.
And Amazon has maximum room to push back now: It hasn’t yet bought any land or signed leases in Long Island City, just signed the odd letter of commitment. It could back out and restart talks with some of its jilted suitors in the recent competition. (But the conversations sure would be awkward.)
Since New Yorkers, including Queens residents, largely support the company coming here (yes, we like jobs in this town), the threat might beat back the more venal “critics”: At the very least, it’s a warning Amazon won’t pay protection money.
It’s less likely to move ideologues like Rep. Alexandria Ocasio-Cortez, but she has no power to stop the deal — only allied extremist outfits that are protesting loudly.
More important is state Sen. Mike Gianaris, who’s against it on pure principle (too many subsidies) and may well be in a position to block it now that Senate Majority Leader Andrea Stewart-Cousins has named him to a key oversight board.
Yet Amazon could satisfy Gianaris — by, say, forgoing some of the subsidies it’s now in line for. It has already announced it won’t take advantage of Opportunity Zone tax credits that it’s legally entitled to.
The question is: How much does Amazon want a major New York City presence? In retrospect, the whole competition looks like a cynical effort to get the best deals it could in the two metro areas it always wanted for its main East Coast offices: the nation’s political and financial capitals.
Like Gianaris, we thought Gov. Cuomo and Mayor de Blasio got suckered. We’d love to have Amazon here, but not at any price.
So here’s hoping the threat shuts down the extortionists so Amazon can get down to the business of settling on a final deal that looks more like free-market capitalism and less like corporate welfare.