AMAZON HQ2 FALLOUT

February 16, 2019 at 4:30 am

As the tech giant scraps its plan to build a new headquarters in New York, we have the latest on the fallout and what it means for you.

Aired February 15, 2019.

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> NEW YORK CITY GAVE AMAZON A
REAL OPPORTUNITY HERE, AND ALL
WE ASKED WAS THAT THEY BE A GOOD
NEIGHBOR AND BE PART OF THE
COMMUNITY AND CLEARLY THEY
WEREN'T READY TO DO THAT.
>> GOOD EVENING.
WELCOME.
IT'S A POLITICAL AND ECONOMIC
BOMBSHELL STILL REVERB RATING
AROUND THE CITY AND THE STATE.
AMAZON IS OUT.
THE RETAIL GIANT REVEALED
THURSDAY THAT IT SCRAPPED PLANS
TO BUILD A NEW HEADQUARTERS IN
LONG ISLAND CITY, A MOVE THAT
WAS SUPPOSED TO BRING AROUND
25,000 JOBS TO THE CITY, BUT WAS
MET WITH FIERCE RESISTANCE FROM
MANY LAWMAKERS AND ACTIVISTS.
>> I MEAN, 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.
>> THE TECH GIANT DECISION LEFT
POLITICIANS POINTING FINGERS
OVER WHO IS TO BLAME FOR THE
DEAL'S DOWNFALL.
IT'S ALSO A MAJOR BLOW TO
GOVERNOR CUOMO AND MAYOR de
BLASIO, BOTH OF WHOM FOUGHT TO
BRING AMAZON TO QUEENS.
SO WHAT ARE THE POLITICAL AND
ECONOMIC RAMIFICATIONS OF
AMAZON'S DECISION?
AND WHAT'S NEXT FOR NEW YORK?
FOR ANSWERS I'M JOINED BY GOTHAM
GAZETTE EXECUTIVE EDITOR BEN
MACK.
WELCOME TO THE PROGRAM.
>> THANKS FOR HAVING ME.
>> BEN, WE TALKED ABOUT THIS
BEFORE AND I TOLD YOU THIS
ANECDOTE, OCTOBER 2017, I WAS IN
A BIG MEETING I THINK IT WAS AT
GOOGLE HEADQUARTERS AND THERE
ARE A LOT OF ELECTED OFFICIALS
IN NEW YORK CITY, AND THE TALK,
EVEN THOUGH IT WASN'T SUPPOSED
TO BE THE TALK THAT WAS
HEADLINING THE EVENT, WAS ALL
ABOUT AMAZON POSSIBILITY COMING
TO NEW YORK AND EVERYBODY WANTED
IT, THEY WANTED IT, THEY WANTED
THE BUSINESS AND THE JOBS.
MANY OF THOSE SAME ELECTED
OFFICIALS WERE IN THE VANGUARD
IN THE FOREFRONT OF THE FIGHT
AGAINST THE AMAZON DEAL.
WHAT HAPPENED?
HOW DO WE GET HERE?
>> I THINK THERE WAS A FEW
THINGS.
ONE, SOME OF THE POLITICAL
GROUND HAS SHIFTED, VICTORIES
LIKE WE SAW WITH ALEXANDRIA
OCASIO CORTEZ, SOME OF THE
DEMOCRATIC CONFERENCE IN THE
STATE SENATE, YOU'VE SEEN SOME
PRIMARY CHALLENGES FROM THE LEFT
WHERE INCUMBENTS HAVE LOST AND
THAT HAS MADE A LOT OF
INCUMBENTS NERVOUS ABOUT WHETHER
THEY COULD WIND UP WITH A
CHALLENGE FROM THE LEFT.
SO THAT'S A LITTLE BIT OF A
SHIFT.
BUT THE OTHER THING THAT
HAPPENED WAS THE PROCESS THAT
UNFOLDED WAS COMPLETELY BEHIND
CLOSED DOORS BETWEEN AMAZON AND
THE CITY AND THE STATE AND LOCAL
ELECTED OFFICIALS LIKE TO HAVE
THEIR SAY IN THINGS THAT ARE
GOING TO COME TO THEIR
NEIGHBORHOODS.
>> BUT THE LOCAL ELECTED
OFFICIALS KNEW THAT THE
CONVERSATIONS WERE GOING ON
BEHIND CLOSED DOORS.
THEY DIDN'T COMPLAIN AS FAR AS I
CAN RECALL, MAYBE YOU CAN
CORRECT ME IF I'M WRONG.
>> IT'S A FAIR POINT, VERY GOOD
POINT.
WE NEED TO POINT OUT THAT THE
FOLKS THAT HAVE BEEN BASHING
THIS SINCE THE DEAL WAS
ANNOUNCED SAYING YOU LEFT US OUT
AND WHAT ABOUT LOCAL INPUT, THEY
KNEW THE PROCESS WAS ONGOING AND
PROBABLY SHOULD HAVE BEEN
SHOUTING HEY, WE KNOW THESE
NEGOTIATIONS ARE HAPPENING.
LET US IN.
THEY DIDN'T DO THAT.
AT THE SAME TIME, THEY DID NOT,
I DON'T THINK, ESTIMATE WHAT THE
CITY AND THE STATE WERE GOING TO
HAVE TO DO WITH AMAZON IN TERMS
OF GOING AROUND LOCAL APPROVAL,
LOCAL INPUT, BY USING THE STATE
LEVEL WHAT'S CALLED GENERAL
PROJECT PLAN AS OPPOSED TO THE
CITY LEVEL LAND USE PROCESS.
THAT GETS A LOT IN THE WEEDS,
BUT IT CERTAINLY RELATES TO THE
PROCESS OF LOCAL INPUT.
>> CONCRETELY, WHAT WERE SOME OF
THE THINGS ABOUT THE DEAL, THE
ACTUAL DEAL THAT POLITICIANS AND
ACTIVISTS DIDN'T LIKE?
>> THEY WOULD HAVE WANTED SAY IN
TERMS OF THE SURROUNDING
INFRASTRUCTURE, WHAT ARE THE
INVESTMENTS?
WHAT ARE THE OFFSETS, SCHOOL
SEATS, TRANSIT, MAYBE EVEN OPEN
SPACE CONSIDERATIONS, AND THEN
OF COURSE, THERE'S THE SUBSIDIES
INVOLVED, ROUGHLY $3 BILLION IN
CITY AND STATE, TAX BREAKS OR A
CASH CAPITAL GRANT TO HELP BUILD
THE HEADQUARTERS.
WHAT FOLKS REALLY NEED TO
UNDERSTAND, THOUGH, AND THERE'S
BEEN A LOT OF MISINFORMATION AND
MISINTERPRETATION OF THIS, IS
THAT MOST OF THAT $3 BILLION IS
NOT MONEY THAT'S JUST SITTING
AROUND BEING GIVEN TO AMAZON.
IT WAS GOING TO BE PARTIAL
REBATES OF TAXES THE COMPANY
WOULD BE PAYING.
SO NOW, THAT TAX MONEY IS NOT
COMING TO THEN BE REPAID.
THE CAPITAL GRANT, YES, THAT WAS
A CASH GRANT TO HELP BUILD THE
HEADQUARTERS, MOSTLY TO OFFSET
THE USE OF UNION LABOR.
>> RIGHT.
SO WHAT ABOUT THE UNION, THE
UNION FACTOR IN THIS, THAT
AMAZON IS A NON-UNION COMPANY,
IF I'M RIGHT.
>> YES.
>> THAT WAS A BIG BONE OF
CONTENTION?
>> ONE OF THE KEY THINGS THAT
HAPPENED IN THIS FALLING APART,
WAS ACTUALLY THE CITY COUNCIL
HEARINGS THAT WERE HELD.
THERE WAS A LOT OF LOCAL
OPPOSITION, A LOT OF RALLIES,
PRESS CONFERENCES, OP-EDS, ET
CETERA, BUT CITY COUNCIL SPEAKER
CORY JOHNSON WORKED WITH THE
LOCAL COUNCILMEMBER JIMMY VAN
BRAMER TO HOLD TWO OVERSIGHT
MEETINGS, AMAZON AND CITY
OFFICIALS DIDN'T HAVE GREAT
ANSWERS AND GAVE ANSWERS THE
CITY COUNCIL DIDN'T LIKE
INCLUDING THE UNIONIZATION
ISSUE.
>> WHAT ARE THE ECONOMIC
RAMIFICATIONS FOR THE CITY AND
THE STATE OF THIS FALLEN DEAL?
>> THERE'S A BIG QUESTION NOW
AROUND HOW COMPANIES AROUND THE
WORLD WILL SEE NEW YORK CITY AND
NEW YORK STATE.
NOW, THERE WERE PARTICULARS TO
THIS DEAL AROUND THE SUBSIDIES
AND THE LOCATION AND HOW AND THE
SECRETIVE PROCESS AND THE
BIDDING ONE CITY AND ONE STATE
AGAINST EACH OTHER.
WE CAN'T RELATE THIS TO A
UNIVERSAL ISSUE, BUT YOU TALK
ABOUT BUSINESS LEADERS LOOKING
AT NEW YORK AND ITS CLIMATE, AND
WONDERING ABOUT SETTING UP SHOP
HERE VERSUS PERHAPS SOME OTHER
CITIES.
NEW YORK HAS GREAT ADVANTAGES OF
COURSE.
>> THAT'S NOT ONLY ABOUT LOSING
THE MONEY AND THE POSSIBLE JOBS
BUT ABOUT PERCEPTION OF HOW
FRIENDLY NEW YORK CITY IS TO
BUSINESSES?
>> ABSOLUTELY.
NOTSECTOR, THE CITY HAS
BEEN LOOKING TO DIVERSIFY ITS
ECONOMY AND THE TECH SECTOR HAS
BEEN THAT THIRD BIG LEG AND HAS
BEEN DEVELOPING WITH GOOGLE AND
OTHERS.
THE QUESTION AGAIN IS, DID THE
CITY JUST LOSE OUT ON IMPORTANT
DIVERSIFICATION OF ITS ECONOMY,
AND THEN THERE'S THE TAX
BENEFITS, THE REVENUE THAT WAS
SUPPOSED TO COME IN FROM THE
COMPANY AND ITS FAIRLY HIGHLY
PAID EMPLOYEES.
>> NOW HOW ABOUT THE POLITICAL
RAMIFICATIONS, BECAUSE AS WE'VE
DISCUSSED BEFORE, AS MOST OF OUR
VIEWERS KNOW, GOVERNOR CUOMO AND
BILL de BLASIO WERE VERY STRONG
PROPONENTS OF THIS, MADE THE
DEAL.
IN FACT, CUOMO JOKED THAT HE
WOULD BE WILLING TO CHANGE HIS
NAME TO AMAZON CUOMO IF THEY
CAME.
WHAT HAPPENS TO THEM, AND WHAT
ABOUT THE POLITICIANS, THE
ELECTED OFFICIALS WHO WERE
AGAINST THE DEAL, DO YOU THINK
THAT THEY WERE SURPRISED BY
THIS, FORGET T IT, BYE-BYE?
>> A LOT OF PEOPLE WERE CAUGHT
OFF GUARD INCLUDING IN THE
OPPOSITION AND THERE WERE SOME
NEWS REPORTS AND ALSO SOME
COMMENTS FROM AMAZON EXECUTIVES
ABOUT WE WANT TO COME SOMEWHERE,
WHERE WE'RE WELCOME AT ONE OF
THE CITY COUNCIL HEARINGS.
I DON'T THINK ANYBODY EXPECTED
IT TO FALL APART THIS QUICKLY,
THIS EARLY, BUT AMAZON I THINK
DECIDED TO JUST CUT ANY LOSSES
AND GET OUT, WITHOUT HAVING TO
GO THROUGH THE PROCESS THAT SOME
OTHER COMPANIES MIGHT HAVE GONE
THROUGH, OR THAT WE SEE ON A
MORE LOCAL LEVEL, WHEN YOU HAVE
A BIG REAL ESTATE PROJECT THAT
SOMEBODY WANTS TO BUILD, THERE'S
LOCAL OPPOSITION, THERE'S A
NEGOTIATION, AMAZON, IT SEEMS,
FELT LIKE THEY DID THE
NEGOTIATION, AND THAT WAS IT.
THE DEAL THAT WAS ANNOUNCED IS
THE DEAL THAT GOES FORWARD.
>> NONNEGOTIABLE.
LIKE THE UE IN BREXIT.
>> IT WAS SUPPOSED TO BE BINDING
EVEN THOUGH IT WAS A MEMORANDUM
OF UNDERSTANDING, MAYBE THERE'D
BE ADJUSTMENTS AS THEY WENT
THROUGH THE PROCESS BUT THEY
WERE NOT READY TO RENEGOTIATE.
>> IN 30 SECONDS, IT'S BYE-BYE
LETTER, AMAZON SAID 70% OF NEW
YORKERS ARE STILL SUPPORTIVE OF
THIS DEAL.
IS THAT TRUE, AND IF IT IS TRUE,
WHAT'S GOING TO BE THE
CONSEQUENCE, THE POLITICAL
CONSEQUENCES IN THE LONG-TERM?
>> POLLS SHOWED THAT NEW YORKERS
FAVORED AMAZON COMING TO QUEENS,
BUT THERE WERE SOME MIXED
RESULTS AROUND THE SUBSIDIES AND
I ALWAYS CAUTION PEOPLE TO NOT
PUT TOO MUCH FAITH IN POLLS BUT
I DO THINK IT WAS A MORE POPULAR
THAN NOT MOVE.
THERE ARE SOME REAL QUESTIONS
ABOUT HOW THIS FALLOUT LOOKS FOR
THE GOVERNOR, THE MAYOR, AND THE
LOCAL ELECTED OFFICIALS THAT
OPPOSED IT.
>> SURE.
>> THE MAYOR CERTAINLY HAS BEEN
TRYING TO SAVE SOME FACE HERE,
POINTING TO AMAZON, AS YOU READ,
WHILE THE GOVERNOR IS POINTING
FINGERS AT THE STATE SENATE
DEMOCRATS, INCLUDING THE LOCAL
SENATOR, MICHAEL GENERIS.
>> ALL RIGHT, SO THIS IS NOT
GOING TO BE THE LAST OF THIS
STORY, SO WE'LL BE TALKING ABOUT
IT AGAIN.
BEN, THANKS FOR JOINING US.
>> SOUNDS GOOD.

Mutual of America PSEG

Funders

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