Special Briefing: Amazon’s New York Exit Isn’t Politics as Usual

Special Briefing: Amazon’s New York Exit Isn’t Politics as Usual

Amazon and Blue Origin founder Jeff Bezos provides the keynote address at the Air Force Association's Annual Air, Space & Cyber Conference in Oxen Hill, MD.

SourceJIM WATSON/AFP/Getty

Why you should care

Because what happens in New York doesn’t stay in New York.

This is an OZY Special Briefing, an extension of the Presidential Daily Brief. The Special Briefing tells you what you need to know about an important issue, individual or story that is making news. Each one serves up an interesting selection of facts, opinions, images and videos in order to catch you up and vault you ahead.

WHAT TO KNOW

What happened? The online retail giant stunned observers yesterday by announcing that it’s pulling the plug on its planned $2.5 billion second headquarters in New York’s Long Island City. Citing strong political opposition to the $3 billion in tax breaks it was set to receive — one of many concerns critics had raised — Amazon said it’ll focus instead on plans to develop its other HQ2 location in northern Virginia and an operations hub in Nashville.

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Alexandria Ocasio-Cortez, State Sen. Michael Gianaris, several city councilors and an army of grassroots activists who warned local residents, door-to-door, of the crippling rent hikes they’d soon face.

Source Drew Angerer/Getty

Why does it matter? Progressive politicians, including star rookie Rep. Alexandria Ocasio-Cortez, were quick to claim victory after a hard-fought campaign against the cushy treatment of corporate giants (especially ones accused of having poor working conditions). But as the dust settles around a reversal that some believe could potentially cost New York City dearly, observers will undoubtedly wonder: Who really wins? And as Amazon presses on toward retail domination, others will contemplate what this move might mean for future battles between big business and local politics.

HOW TO THINK ABOUT IT

Playing the game. Amazon first unveiled its plans to pick a second headquarters through a national competition in 2017, promising 50,000 jobs and $5 billion worth of investment to the winner. It lured 238 proposals, which it later shortlisted to 20 before announcing it would evenly split HQ2 between New York and northern Virginia. But as local governments scrambled to compete, critics complained that Amazon was gaming the system by pitting cities against one another for the spoils. However, as OZY reported at the time, localities also learned a thing or two while pitching the tech giant: Ontario, for one, realized that its plan to boost STEM graduates by 25 percent over five years could have long-term benefits even without winning Amazon’s bid.

Pushing back. Championed by Gov. Andrew Cuomo and Mayor Bill de Blasio, Amazon’s choice of uber-expensive but pro-labor New York quickly attracted vocal opposition from a key coterie of local officials and advocacy groups. Besides Ocasio-Cortez, that group included State Sen. Michael Gianaris, several city councilors and an army of grassroots activists who warned local residents, door-to-door, of the crippling rent hikes they’d soon face. Together, those critics accused the company and its political supporters of ignoring community interests and failing to consult local experts. The overarching goal? To stage a high-profile challenge against corporate welfare. And in the end, it worked: “They killed Amazon,” city politics specialist and Baruch College professor Douglas Muzzio told Reuters, “the biggest beast around.”

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Activists and community members who opposed Amazon’s plan to move into Queens rally in celebration of Amazon’s decision to pull out of the deal, in the Long Island City neighborhood, February 14, 2019 in the Queens borough of New York City. Amazon said on Thursday that they are cancelling plans to build a corporate headquarters in Long Island City, Queens after coming under harsh opposition from some local lawmakers and residents.

Source Drew Angerer/Getty

Who’s winning? While progressives are hailing Amazon’s about-face, supporters of a New York HQ2 lament what they say could be a major long-term economic loss for their city. Besides the 25,000 jobs with annual salaries topping $150,000, that also means a dearth of more than $27 billion in tax revenue over the next quarter-century. One union chief suggested that politics had taken a front seat to “a once-in-a-generation investment” in the local economy, while ex-Goldman Sachs CEO Lloyd Blankfein accused progressive Democrats of both derailing progress and — citing poll data that showed the majority of New Yorkers actually supported HQ2 — acting undemocratically. “Victory lap for them,” he tweeted, “not for NYC.” Others, meanwhile, claim Amazon’s sudden departure amounts to a PR disaster that casts the company as rigid and unresponsive to local resistance.

The bigger picture. As impassioned supporters of either side continue their tussle, Amazon’s New York reversal will likely leave observers pondering several important takeaways. First, that while Jeff Bezos giveth, he can also taketh away: Some say local governments have learned just how little Amazon is apparently willing to compromise with local actors. But it’s also a victory for campaigners, signaling that tech giants may not be as mighty as they once seemed. Scott Galloway, a professor at NYU’s Stern Business School, told CNN: “The idolatry of tech innovators — and their firms — has peaked.”

WHAT TO READ

‘Amazon Isn’t Bigger Than New York’: Meet the Man Who Killed the Deal, by Erin Durkin in The Guardian

“The politician fought the project on multiple fronts, holding rallies, gathering petition signatures and introducing bills that would bar New York from participating in nondisclosure agreements (NDAs) like the one used to lure Amazon, and prohibit real estate sales based on inside information.”

Amazon Calls the Socialists’ Bluff, by the Washington Examiner

“The total package negotiated for Amazon, as unfair as it was to other companies and to hardworking, less affluent taxpayers living upstate and not benefiting from the deal, would have still given New York a net tax revenue increase that could have been spent on a progressive wish list.”

WHAT TO WATCH

Alexandria Ocasio-Cortez on Amazon Canceling NYC Campus: ‘I Think It’s Incredible’

“It shows that everyday Americans still have the power to organize and fight for their communities, and they can have more say in this country than the richest man in the world.”

Watch on NBC News on YouTube:

Exposed: Undercover Reporter at Amazon Warehouse Found Abusive Conditions and No Bathroom Breaks

“The atmosphere of the Amazon warehouse I worked in was what I imagine the atmosphere of a low-security prison would feel like.”

Watch on Democracy Now! on YouTube:

WHAT TO SAY AT THE WATERCOOLER

What a deal. Despite banking more than $11 billion last year, Amazon reportedly won’t pay any federal income taxes for the second year in a row, thanks to undisclosed tax credits. In fact, it’ll claim $129 million in tax rebates — giving it an effective tax rate of -1 percent.

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