How opponents of the Amazon deal could stop it
How opponents of the Amazon deal could stop it
Amazon’s plan to open up shop in Long Island City has no shortage of detractors, but what many lawmakers object to is not the prospect of Amazon bringing half of its second headquarters to New York City, but what the city and state offered the company as an inducement.
Gov. Andrew Cuomo and Mayor Bill de Blasio are under fire for the nearly $3 billion deal that won over Amazon. Liberals such as state Sen. Michael Gianaris, U.S. Sen. Kirsten Gillibrand and incoming Rep. Alexandria Ocasio-Cortez have expressed dismay at the generous subsidies New York has offered. And then there’s the fact that Cuomo and de Blasio circumvented usual procedures, leaving the City Council without a seat at the table.
But there are a few things angry councilmembers and state legislators could do to thwart the deal:
Fight the decision to bypass ULURP
Typically, new developments have to go through a land use approval process called
the Uniform Land Use Review Procedure (ULURP), in which the City Council has input and oversight. Regarding the Amazon deal, Cuomo is using his power as a state officer to forgo that process. Councilmember Brad Lander called that justification “bogus,” though the governor is allowed to control city land use processes.
John Kaehny, executive director of Reinvent Albany, suggested that the City Council might fight the land use, however. “Roughly 25 percent of the total square footage is on public land already, owned by New York City,” Kaehny said. “That’s the part that’s subject to PILOT [payments in lieu of property taxes]. Therefore, there’s a hook for the City Council to potentially sue the mayor for the disposition of that land without any sort of input from them.”
“Many details about this deal are still missing here,” City Council Speaker Corey Johnson said in a statement. “We are looking at our options. Nothing is off the table.”
Deny extending or raising the cap on the Excelsior tax credits
Of the total tax breaks that have been offered to Amazon, up to $1.2 billion could come through the Excelsior Jobs Program. But that program is set to expire in 2026, and it has an annual cap of $183 million – which is set to decrease in the coming years. So, the tax credits offered to Amazon would require the State Legislature to expand the program and raise the cap. Opponents could therefore refuse to raise the cap or extend the program, but they would need unified opposition in the state Legislature to do so.
Deny state grants through the Public Authorities Control Board
Included in the offer to Amazon is a state grant of up to $505 million, which may go before the five-member Public Authorities Control Board for approval. The governor appoints the chair of the board, but the four other members are appointed on recommendation of the majority and minority leaders in the Legislature.
PACB has been used in the past to reject former New York City Mayor Michael Bloomberg’s plan to build a stadium in his bid to host the 2012 Olympics. Still, the board’s chairman, Robert F. Mujica, Jr., told The New York Times that PACB may not end up reviewing the grant.
Eliminate economic development subsidies
Assemblyman Ron Kim plans to introduce legislation that would get rid of economic development subsidies altogether, using the funds to buy student debt. Kim, a Democrat, told CityLab that he would bring the bill before the Legislature in January, which he hopes will reverse the Amazon deal. Kim’s plan already has a fan in Ocasio-Cortez.
Leverage concessions out of Cuomo
If the state Legislature was really committed to changing the deal, they could use other types of leverage to force concessions from Cuomo. One way to do that could be through the Legislature’s power over the state budget. “For example, say that they were going to force the governor to abandon his two percent spending cap approach in the state budget, something which the governor apparently values very highly,” said James Parrott, director of economic and fiscal policies at the New School. “They could use their general budget leverage to threaten the continuation of the two percent spending cap unless the governor made the concessions they were seeking.”
This last option is one that ardent opponents of the Amazon deal may be reluctant to embrace, as it wouldn’t actually stop the deal. But it could be the most likely course of action, said Parrott.
“I think it's much more important for the Legislature and the Council to use the occasion of the fact that they were frozen out of this deal, in order to force the governor and the mayor to make significant changes for which there is broad public support,” Parrott said, suggesting that opponents could direct their attention to a compromise, pressuring Cuomo and de Blasio to fully fund the MTA, reform tax credit programs like the REAP program and the ICAP program, and compensate upstate localities by increasing local aid.
Parrott also suggested that Amazon be called in to testify about what the company will do for the community, once the new Legislature convenes in January. Even if it’s possible, the political costs of fighting a battle to completely undo the deal could be costly.
“People will make noises about thwarting [the deal] that I think, in the end, it's not going to happen,” Parrott said. “Rather than try and nix the deal, they should try and make lemonade out of this lemon and make the deal as good as possible.”
Correction: An earlier version of this post had the incorrect name for Assemblyman Ron Kim.