Tag Archives: public schools

Amazonian Rage in NYC

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photo by Theeditor93

Vice quoted me in Amazon Is Bringing in Elite Lobbyists Amid Seething Rage Over HQ2. It opens,

Amazon might be too big to tax, but it’s not too big to freak out.

As the company tries to erect a massive headquarters in America’s largest city, it has come up against staunch opposition from residents, politicians and unions—all concerned the powerful monopoly will serve to inflate rent and strain local infrastructure, especially the housing supply and subway system. And while it might seem like a trillion-dollar company could easily quash protesting naysayers, turns out CEO Jeff Bezos might actually have good reason to try and win the haters over.

On Wednesday, the Wall Street Journal reported Amazon hired high-powered Democratic consulting firm SKD Knickerbocker, and a lobbying shop called Greenberg Traurig, to help smooth the way forward for its new HQ. While Amazon remained relatively tight-lipped, the company has sought to make inroads into affected communities—planning meetings with public-housing residents and reaching out to members of the city council. But some elected officials, including Senator Mike Gianaris and NYC Councilman Jimmy Van Bramer, whose districts include the HQ’s proposed turf in Long Island City, have refused to serve on its advisory board, indicating instead a desire to kill the project entirely. Meanwhile, a Quinnipiac poll that dropped this week showed the majority of NYC residents backed the HQ2 plan, but activists groups and community board members have continued to organize, spurred on by Congresswoman-elect Alexandria Ocasio-Cortez—or at least her Twitter account.

In fact, the new Amazon influence operation, which emerged a few weeks after HQ2 plan was made official, suggested there were still concrete ways locals could thwart or at least put a dent in the company’s expansion scheme. If nothing else, an extremely-powerful company that has experience in the DC lobbying game is finding out it won’t get a new home in NYC without a fight that cuts at the core of the Democratic Party’s identity.

According to Richard Brodsky, a lawyer and veteran Democratic politician who served in the state assembly, if city officials or other activists took Amazon or the politicians who supported the plan to court, they could employ legislative subpoenas to demand more documentation of the project, and investigate compliance issues. Brodsky argued Amazon’s bid might provide the jobs promised, but that the company still had a long way to go in informing the public about how it would impact communities.

“Because the governor and the mayor have given this project to a set of soviet-style bureaucracies, there’s no one to ask the questions and no one to answer,” he told me, referring to the special fast-track process Mayor Bill de Blasio and Governor Andrew Cuomo, both Democrats, have tapped to push through the Amazon deal. “Who the hell do you ask?”

Litigation is a fairly common way of handling disputes over projects like this in the city, according to David Reiss, a law professor and expert on community development at Brooklyn Law School. “Not being a shy bunch, New Yorkers often file lawsuits that try to set up procedural roadblocks to the project,” he told me via email. “These suits can slow down or even stop projects—and can give community members leverage with the City, State and project developers.” Even if it isn’t stopped altogether, legal action could help modify the project and fund parks, schools or transit.

Under the current approach from on high, however, the Amazon HQ also had to be approved by the Public Authorities Control Board (PACB), comprised of gubernatorial appointees mostly made in consultation with the state legislature. This may prove to be among the only serious points of leverage Amazon opponents have to stall, or, in an extreme case, block the whole project. Even then, Brodsky said, the PACB was only technically supposed to oversee financial concerns, and not necessarily gauge a project’s social impact.

The city, for its part, appeared to largely be standing behind its original plan as it geared up for public hearings beginning next week. A spokesperson from the NYC Economic Development Corporation, the nonprofit development agency contracted by the city that helped broker the deal, told me Amazon was working to broker partnerships with affordable-housing developments and other community organizations, as well as provide concrete details about the 25,000 jobs promised in the company’s initial memo about the project.

The spokesperson also dismissed the idea that the new HQ would strain the city’s mess of a public transportation system. They argued the current flow of traffic on the subway routes amounted to Queens residents commuting to Manhattan for work, and that the “reverse commute” of Amazon employees coming to Long Island City would balance things in the other direction, not jam up trains in some new way. (It’s worth noting that Amazon employees were already reportedly looking for rental properties in Long Island City proper.)

Those resisting the headquarters, however, were unlikely to be swayed by more details, logistical help, or civic engagement on part of a brand many despised for what it represented in the annals of modern capitalism. Ocasio-Cortez, who has become a national spokesperson for anti-Bezos sentiment and a leading light of a left-wing insurgency in the Democratic Party, took to Twitter again on Tuesday: “Now what I DON’T want is for our public funds to be funding freebie helipads for Amazon + robber baron billionaires, all while NYCHA and public schools go underfunded & mom+pops get nowhere near that kind of a break,” she said, capturing criticism of some of the most comical parts of the Amazon deal as brokered by de Blasio and Cuomo.

Ocasio-Cortez’s Democratic Socialist bent may still be a nascent one, and her job in DC means local activist groups will have to lead the fight on the ground. (Some unions actually supported the deal, further exposing the internal Democratic Party divide at issue here.) At the same time, it’s important to look back to previous massive corporate deals for context on what’s going on. While Amazon, as a company, doesn’t have many contemporaries in the city trying to launch a new home at this scale, the way stadiums, universities and other hubs have been constructed in NYC in the past will help inform what does—and doesn’t—happen in Long Island City.

The EDC spokesperson, for example, pointed out that other big projects—such as Columbia University’s expansion and Atlantic Yards—were also achieved via a General Project Plan pushed through by the state instead of undergoing to the more public land review process at the city level. Using that fast-track in Amazon’s case has been a key flashpoint in the dispute over its origin, garnering frustration from Van Bramer and his colleagues. (Announcing a project before knowing the specific details, the EDC spokesperson insisted, was par for the course in cases like this one.)

This fast-tracking does happen often with larger projects, Reiss agreed, noting that land procedures can be bypassed when the state government is involved, leaving some feeling like their voices were ignored. “This can cut deeply because they are often the ones who are most affected by the negatives of the construction process and the changes that the project bring about in their communities,” he told me.

The Hunger Games: Amazon Edition

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photo by SounderBruce

The New York Law Journal published commentary of mine, The Hunger Games: Amazon Edition. It opens,

Last week Amazon finally announced that New York and Northern Virginia would be the sites of its planned major expansion. While many are caught up in the excitement of Amazon bringing 25,000 high-paid jobs to both metropolitan areas, it is worth thinking through the costs that beauty contests like this one impose on state and local governments. Amazon extracted billions of dollars in concessions from the winners and could have extracted even more from some of the other cities courting them.

It is economically rational for companies to create such Hunger Games-type competitions among communities. These competitions reduce their costs and improve their bottom lines. But is it economically rational for the cities? As long as governments are acting independently, yes, it is rational for them to race to the bottom to secure a win. So long as they are a bit better off by snagging the prize than they would have been otherwise, they come out ahead. But the metrics that politicians use are unlikely to be limited to a hard-nosed accounting of costs and increased tax revenues. Positive buzz may be enough to satisfy them.

Consider Wisconsin Governor Scott Walker’s deal with Foxconn. Just over a year ago, he was touting the $3 billion state subsidy for FoxConn’s manufacturing plant. This was the year leading up to his hard fought election fight, a fight he ultimately lost. His public statements focused on Foxconn’s promise to create 13,000 jobs. While that was a lot of jobs, it was a hell of a lot of subsidy—more than $230,000 per job, more than six times the largest amount Wisconsin had ever paid to subsidize a promised job. Walker got his campaign issue, FoxConn got its $3 billion and Wisconsin residents got … had. The $3 billion dollar subsidy has grown to over $4 billion at the same time that Foxconn is slowing down its investment in Wisconsin. So now taxpayers are subsidizing each job by well over $300,000 each. Nonpartisan analysts have determined that it will take decades, at the earliest, for Wisconsin to recoup its “investment.”

Likewise, hundreds of millions of dollars are thrown at stadiums and arenas even though economists have clearly demonstrated that those investments do not generate a positive financial return for the governments that provide these subsidies. Fancy consultants set forth all of the supposed benefits: job creation, direct spending by all of the people drawn to the facility, indirect spending by those who service the direct spenders. This last metric is meant to capture the increase in restaurant staff, Uber drivers and others who will cater to the new employees, residents and visitors to the facility. But as has been shown time and time again, these metrics are vastly overstated and willingly accepted at face value by politicians eager to generate some good headlines. They also ignore the opportunity cost of the direct subsidies—monies spent on attracting a company is money that can’t be spent on anything else. While we don’t know what it would have been spent on, it is likely to have been public schools, mass transit, roads or affordable housing in many communities.