Bill would ban Amazon-type deals in the future

Feb 21, 2019

A week after the Amazon deal in Queens died, New York lawmakers want states to agree to stop using taxpayer money to lure big businesses.The legislators are proposing a measure that would form an interstate compact to end what they call excessive “corporate welfare” for large companies.

Credit amazon.com

Among the sponsors is Senate Deputy Majority Leader Mike Gianaris, a leading opponent of the Amazon deal. It would have located part of a second headquarters for the giant online retailer in his district, in exchange for $3 billion in government subsidies.

Gianaris admitted there are differences of opinion whether Amazon would have been a good addition to New York. But he said there’s growing agreement that the competition among states — which included private meetings between the company, Gov. Andrew Cuomo and New York City Mayor Bill de Blasio to finalize the deal — was the wrong way to go.

“The process that pitted cities and states against each other to acquire Amazon’s good graces was flawed and should not have been permitted,” Gianaris said.

Among those who criticized the process are former New York City Mayor Michael Bloomberg and Microsoft chief Bill Gates.

Amazon is also building a new headquarters in suburban Virginia, outside Washington, D.C., and is receiving around a quarter of the subsidies offered by New York state and New York City.

Gianaris said European nations prevent companies from conducting similar competitions there, and he said in the U.S., states could agree not to participate, either, in a “non-aggression pact.”

So far, 11 states have expressed interest in joining, including neighboring Connecticut and Massachusetts.

The Amazon deal fell apart on Feb. 14 after local opposition from some community leaders and lawmakers who represent the district threatened to delay the project. The area, which is bordered by Congresswoman Alexandria Ocasio-Cortez’s district, has increasingly leaned left in recent election cycles. Ocasio-Cortez, who won an upset victory last June, also was against the deal.

Opponents wanted the company to receive fewer government subsidies and do more to alleviate crowded schools and subways and rising housing costs that they said the move would have created.

Gianaris also was appointed by Senate Leader Andrea Stewart-Cousins to a key oversight board that could approve or reject part of the Amazon deal, an action that was said to have rattled the company.

Other supporters of the interstate compact to ban large corporate subsidies include Queens Assemblyman Ron Kim and state Sen. Julia Salazar, who is the bill’s original sponsor. Salazar won her Brooklyn seat in a primary against a member of the former Independent Democratic Conference, a group of breakaway Democrats who often sided with the Republicans then in power in the state Senate.

Salazar, a democratic socialist, said there’s been a “disturbing trend” in the past few decades of governments pulling away from investment in affordable housing, infrastructure and even financial aid for college in favor of aiding big businesses.

“It’s about taking back power for those who have had it taken from them,” Salazar said. “We’re no longer going to compete in a race to the bottom.”

When Amazon backed out, Cuomo blamed Democratic state senators, including Gianaris and Salazar, saying their opposition prevented the city from gaining 25,000 high-paying jobs and potentially billions of dollars in new tax revenue.  

De Blasio, who partnered with Cuomo on the deal, blamed Amazon for the failure, saying the company was inflexible. 

A senior adviser to Cuomo, when asked for reaction to the measure, did not address the substance of the bill, but called the Democratic senators’ actions “theatrics.” Rich Azzopardi said the governor remains focused on increasing New York’s competitive edge by “cutting taxes, creating jobs and making New York more affordable.”