In a 14-month frenzy, cities across North America bent over backward to court Amazon’s second headquarters, or HQ2, by offering subsidies and tax breaks. Recent reports suggest Amazon might split its the new office campuses between Long Island City in Queens and Crystal City in Arlington, Virginia.
The company has pledged to spend at least $5 billion and create 50,000 jobs as part of the project. Even divided over two locations, that represents an enormous infusion into a local economy.
“We’re going to do everything we can to fight Amazon coming to New York, and [to stop] any benefits that our mayor and our governor might lavish on them,” said Jonathan Westin, executive director of New York Communities for Change, an advocacy group that supports low-income communities in the region.
Now the with the possible arrival of new Amazon headquarters in Long Island City and Arlington, the activist fight is spreading — and some local officials are on the activists’ side.
“My understanding is the public subsidies that are being discussed are massive in scale,” New York state senator Michael Gianaris, who represents the Long Island City area, told CNN Business. “Why we would need to give scarce public dollars to one of the richest companies on Earth is beyond me.”
The terms of the proposals to Amazon from New York City and the Washington area haven’t been disclosed, so it’s uncertain what exactly is on the table. However, precedent and public statements indicate that Amazon could get generous deals in exchange for investment and jobs.
Cuomo’s enthusiasm might not trickle down. Local elected officials have taken to speaking out against a potential deal.
“The lack of transparency in this process is outrageous,” local councilman Jimmy Van Bramer said in a statement Thursday.
New York City Mayor Bill de Blasio has called securing HQ2 a “tremendous opportunity,” but conceded this week that “there are real development pressures to be navigated.” He said the city would not award Amazon any special incentives beyond what’s available to all companies and developers.
For state senator Gianaris, incentives aren’t the only issue. He also wants to know what Amazon intends to do to ease stress on the area’s schools and strained subway system. “This is a neighborhood that’s already being overdeveloped,” he said.
“We believe Amazon is just the next iteration of what Walmart was,” said Westin of New York Communities for Change.
Such points of view have also bubbled up in the Washington area. A group called “Obviously Not DC,” supported by activist group Fair Budget Coalition and the D.C. chapter of the Democratic Socialists, has a simple tagline: “Fund our communities, affordable housing, schools, and transit. Not Amazon.”
Massive incentive packages are a popular tool to lure large development projects, said Megan Randall, research analyst at the Tax Policy Center. The problem is, such packages often lack the proper accountability measures to make sure promised economic benefits materialize, she said. It’s also not clear that businesses prioritize incentive packages when making decisions about where to locate, she added.
“Tax incentives, the research shows, actually play a fairly secondary role in terms of where firms decide to go,” Randall said.
Even so, economic incentives are a common part of development deals. For cities, it’s difficult not to throw in perks like tax breaks and subsidies if competing regions are offering them.
“It’s hard to tell if the questions that the public and policymakers are asking are going to become a feature of the discussion,” Randall said. “or if tax incentives are going to retain their popularity.”