A Pre-Forum Primer on “Making Tech Development Civic: Lessons from Amazon HQ2”


Four months after Amazon first announced that it was awarding its HQ2 to Long Island City and two months after it pulled out of the deal, New Yorkers across sectors and communities are still debating how this could process could have worked out differently. Many bemoan the loss of jobs, economic growth, or the opportunity to grow New York’s technology ecosystem. Those critical of the deal question what kinds of  New Yorkers would actually be benefiting from a new technology company campus, especially considering rising costs of housing, evidence of a big pay gap along racial lines in the tech sector, and concerns over the size of the tax breaks due Amazon. Many continue to point to the structural elements in place that allowed such an opaque deal-making process, with little community input, to happen in the first place.

How can we make future New York tech developments more “civic”? This is the core question we will be asking at our Forum @ Civic Hall, “Making Tech Development Civic: Lessons from Amazon HQ2” on Wednesday, April 17th, from 6:00-8:30 (reserve your tickets here. Civic Hall members have a complimentary ticket code in your inbox).

Here’s a timeline to help orient folks to the Amazon HQ2 process in New York. Additionally, we’ve curated some readings and videos (particularly those from the speakers featured at the Forum) with summaries that detail some important themes that have emerged.

Timeline

September 7, 2017, Amazon announced it is looking for a second headquarters that would be co-equal to that in its home of Seattle. It put out a Request for Proposals detailing what it was seeking. Cities had until October 19, 2017 to submit their applications and 238 were submitted. Governor Andrew Cuomo and Mayor Bill de Blasio announced they have submitted an HQ2 bid naming four different areas (Long Island City, the Financial District, Midtown West, and the “Brooklyn Tech Triangle.”)

By January 18, 2018 there were 20 finalists announced, including New York and Newark. Early on, local community groups Make the Road New York and Showing Up for Racial Justice made their opposition known, stating that Amazon had to improve its business model and treatment of workers. November 5, 2018, Amazon announced that it was going to add two new headquarters instead of one. November 9, 2018, Crain’s reported that Amazon would bypass the city’s land use review procedure (ULURP), thereby bypassing City Council and local oversight. On November 13, 2018 Amazon announced it would choose New York City and Arlington county, Virginia.

December 11, 2018 the city’s HQ2 bid was made public and on the same day, de Blasio and Cuomo announced they would form a community advisory committee. On December 13, 2018 and January 30, 2019 New York City Council held hearings with Amazon officials and reps from NYCEDC. On February 4, 2019 New York state Senate Majority leader Andrea Stewart-Cousins nominated state senator Michael Gianaris (a strong opponent to the deal who represents the area in Long Island City where Amazon would have been) to the Public Authorities Control Board. This board has veto power over the HQ2 deal.  On Valentine’s Day, February 14, 2019, Amazon announced it would withdraw its HQ2 offer. (Timeline basics from USA Today and Curbed New York – see both for more details).

Recommended Reading and Watching

Diversity of Opinion: Within and between sectors, there is a wide-range of opinions about the Amazon HQ2 deal. Read about a couple of them in this edition Micah Sifry’s First Post newsletter (which Civic Hall members received twice a week in their inboxes!) These opinions illustrate the complexity of views around the deal and that the thoughts coming from tech, labor, Democrats, and media do not fit into neat little boxes.

Baked-in Tax Breaks: While opponents fixated on the $3 billion in tax breaks from the state to the Amazon, much of this was money any company bringing a project of this size would have gotten under existing law. Alyssa Katz outlined the price of the Amazon HQ2 deal back in November 2018 for The Daily News. Specifically, she highlighted some of the policies and laws that  automatically give tax breaks and tax aid to companies coming to New York. For instance companies locating to the boroughs get tax breaks; Amazon would have gotten $1.3 billion. Governor Cuomo’s Excelsior jobs program would have given an additional $1.2 billion in state aid for bringing jobs. This Citizens Budget Commission blog post breaks down the Excelsior program, the Empire State Development Capital Grant ($505 million from the state to reimburse Amazon for capital costs) and other programs that benefited Amazon, as well as other companies coming to New York.

Hurting an Ecosystem: Bringing Amazon would have meant planting seeds for a larger tech industry ecosystem, Julie Samuels of TechNYC argued on Bloomberg. She adds that New York lost other start-ups, research initiatives, and job-training programs that would have serviced Amazon.

Lack of Community Input = Push-Back: New York’s Amazon HQ2 bid was notoriously shielded from the public eye and also allowed it to bypass the standard community land use review process  (ULURP). Perhaps every reaction has an equal or opposite reaction, and organizations like Make the Road New York, which organizes low-income immigrants and communities of color (and repped at our forum by its executive director Deborah Axt), made sure to amplify this lack of transparency and resistance to the deal. Long Island City was “a barrio that beat back the billionaire,” said Angeles Solis from Make the Road New York. Read more about how Make the Road and other organizations organized against the Amazon HQ2 deal in this Washington Post article.

Lost Growth: This piece in Curbed New York  outlines how Amazon HQ2 deal promised at least 25,000 new jobs (and up to 40,000 in the next decade) and an estimated $27 billion in projected tax revenue. Even with the $3 billion in subsidies from the city and state, the benefit would have been a 9:1 ratio of revenue to subsidies. There was also a plan for $10 million expansion of the city’s JobsPlus program into the Queensbridge Houses, the largest public housing complex in the country, in an effort to create a pipeline for jobs.

Lost Jobs, Missed Opportunity: The head of local union 32BJ, Hector Figueroa argued in this op-ed explaining how the pull-out would hurt workers (his colleague Alison Hirsh, 32BJ’s political director, will be speaking at our Forum). New York had the opportunity to show “the world that strong unions, smart regulation and progressive taxation are not an impediment to growth,” he wrote. In his eyes, the incentive package was far less than other competitors (New York was $3 billion compared to Maryland’s $8.5 billion), and demanded more of Amazon. Now, New York lost jobs and the chance to show what an impact it could have on Amazon, not just the other way around.

Jobs, But For Whom? Critics of Amazon HQ2 have pointed out that promising tech jobs doesn’t guarantee that they will be tech jobs for New Yorkers, or tech jobs that will actually be good jobs, especially for local people of color. The Association for Neighborhood & Housing Development or ANHD (repped at our Forum by Lena Afridi, its director of economic development policy) has done research demonstrating that the tech sector has disproportionately benefited white workers’  wages, while non-white workers’ wages lag behind. Read about it in their “Tale of Two Techs.”

Displacement Problems: ANHD also put out a statement on Amazon HQ2 noting that the city and state did very little to “limit speculation and displacement.”  Folks, especially low wealth immigrant communities and communities of color, could lose their homes, businesses, and local cohesion to large, monied developers.

The Future of Tech Development in NYC? How will other companies react to Amazon pulling out? Also, how are companies already benefiting from tax breaks and subsidies written into our laws? Unless certain laws change, there aren’t guarantees something like Amazon HQ2 won’t happen again. Alyssa Katz reports that Google also has gotten a lot of tax abatement for providing jobs. 

If you have other articles you think would be helpful, please put them in the comments below! We look forward to seeing you there!