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Council Members Question City’s ‘Bang for Its Buck’ in Amazon HQ2 Deal at Second Oversight Hearing

The second City Council oversight hearing on the Amazon deal. (via New York City Council)

Jan. 30, 2019 By Nathaly Pesantez

Amazon and city officials returned to City Hall today to face yet another line of hard questioning and criticism over the HQ2 deal in a hearing that this time focused on the financial costs and impacts of the controversial Long Island City project.

The hearing, held by the City Council’s committee on finance, was meant to examine whether the city “is getting a good bang for its buck” in its deal with the tech giant, according to Council Member Daniel Dromm, who heads the committee. It also marked the second out of three scheduled oversight hearings on the project.

While the three-hour hearing, which saw jeers from anti-Amazon protestors and followed rallies for and against the project, centered on the numbers of the deal, much of the questioning also dealt with the company’s reputation, its union tactics, the circumvention of city approvals and the “secretive” talks that led to the bombshell HQ2 announcement—mirroring points posed at last month’s hearing.

“The council as a body has not yet determined whether the deal is a good deal or not a good deal for the city,” said Council Speaker Corey Johnson, an outspoken critic of Amazon’s plans.

Council Speaker Corey Johnson, seated between Council Members Daniel Dromm and Jimmy Van Bramer at the Jan. 30 HQ2 oversight hearing. (via New York City Council)

Johnson noted that the City Council put together its own report on how to look at what’s on the table “before signing the dotted line,” and compared it to the financial analyses by the city Economic Development Corporation and Empire State Development, the parties involved in the Amazon deal.

The EDC summary states that the city alone will see $13.9 billion in revenue over a 25-year period beginning on 2020 as a result of Amazon’s new headquarters. Combined with numbers pulled for the state, the revenue across the board is projected at over $27 billion.

Dromm, however, asserted at the outset that the break-down provided by the two agencies does not go far enough, and reads more as a revenue-incentive report than a cost-benefit analysis.

“Neither evaluation accounted for any cost of impacts accommodating Amazon’s growth in the city,” he said, referencing the expected influx of 130,000 people because of the project as an example. “People will need to be housed, educated, transported and protected. How much will that cost?”

In the 25-page report, the City Council also challenged what the city and state describe as a “9-to-1” return on the project, referring to the approximately $3 billion incentive package for the company and the 25,000 jobs Amazon is promising, with the potential to go to 40,000.

It also stated, among its many issues, that the EDC’s tax revenue estimate was based on 40,000 new jobs being created, and that its cost analysis used the lower 25,000 number.

Amazon and city officials testifying at the Jan. 30 hearing, including Brian Huseman, VP Public Policy at Amazon,  Holly Sullivan, Head of WW Economic Development at Amazon and James Patchett, EDC president and CEO. (via New York City Council)

Other impacts to the city budget the report asked to consider include the $5 million investment the city promised toward workforce development, the cost to relocate staff at the current Department of Education building that will form part of Amazon’s campus, and even the price on building the intermediate school worked into the deal.

Outside the city’s operations, Johnson pressed James Patchett, president and CEO of the EDC, on whether the Amazon project is better than the prior plans for the Anable Basin sites, how many jobs could have been created without the incentives, and the possible displacement of businesses and locals.

While most of the administration’s answers were broad, Patchett, as EDC and New York officials have said across the board, insisted that Amazon’s decision to locate to Queens is a “victory” for residents, and that the returns from the project will serve to address costs and other stated concerns.

“The most important benefit Amazon brings New Yorkers is economic security,” he said, noting as in the prior hearing that building a tech sector would diversify the local economy and safeguard against financial downturns.

Patchett also stood behind the EDC’s calculations on returns, and said the billions in tax revenue “will pay tremendous dividends to our public institutions,” even tying the funds toward progressive policy goals. The $13.5 billion, he said, could cover 289,000 affordable housing units, or be used to to hire and pay more than 5,000 public school teachers over two decades, for example.

“Think for a moment about the magnitude of that,” he said. “With this additional revenue, some of our boldest, most progressive ideals can become policies and our greatest needs are more likely to be met.”

Brian Huseman, vice president of public policy at Amazon who testified at the hearing, also listed several new initiatives the company is implementing that would benefit New Yorkers.

It will hire NYCHA residents, for one, to work at a new 30-person customer service center beginning next quarter, and will create a cloud computing certificate program for students at LaGuardia Community College and other CUNY and SUNY schools, ultimately aimed at providing a pathway for entry-level tech jobs. The company, as it announced yesterday, will also fund computer science courses in 132 city high schools.

Council Member Jimmy Van Bramer, who told Amazon to stop sending “BS” mailers out to New Yorkers in its campaign for the HQ2 project. (via New York City Council)

Legislators, however, largely remained unconvinced and skeptical not only of the HQ2 deal, but of the trillion dollar corporation’s reputation and business dealings.

Johnson, who at one point said the deal “seems like vulture monopolistic capitalism at its worst,” harshly criticized Amazon for its purported work with Immigration and Customs Enforcement, and was appalled at the company’s claims that it would not remain neutral if employees wanted to unionize.

“You are in a union city,” Johnson said to Huseman in response, adding, “That is not a way to come to our city.”

Council Member Jimmy Van Bramer, a central opponent to Amazon’s presence in Long Island City, and who told the company to stop spending millions on “BS” mailers, raised the matter to a larger cause.

“The question I have been asking myself is how much is too much?” he said. “In a world where so many are hungry at night, cold all day, and unable to afford a doctor when they inevitably get sick, how can so much wealth be concentrated in one person’s hands? And how does the city and state celebrate a deal that exacerbates income inequality?”

He added: “This Amazon debacle must be an inflection point for our society.”

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39 Comments

State Sen. Mike Gianaris, & Jimmy Van Bramer- STAND YOUR GRANDS!!

Don’t allow them to squash Your Voice which is our voice …the voice of ppl that you represent ..working class of long island city !! not the ppl that they just looking for instant profit cause the Amazon will jack up the everything in our area!!! As resident of LIC i THANK State Sen. Mike Gianaris, & Jimmy Van Bramer FOR STANDING UP and being voice of our community and not becoming puppet for amazon project!!!

https://nypost.com/2019/02/08/amazon-officials-reconsidering-hq2-in-nyc-due-to-local-opposition-report/?utm_source=maropost&utm_medium=email&utm_campaign=news_alert&utm_content=20190208&tpcc=nypbreaking&mpweb=755-7614148-719800622

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Henry

Please learn how to spell (or type) and your ability to clearly and concisely state your position in a factual, intelligent way.

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LIC Direct

I would like to see anyone like myself who resides in the 11101 and 11106 zip codes and even in the Sunnyside Gardens where Jimmy Van Bramer lives to receive free Amazon deliveries. Bet JVB orders from Amazon probably even a Prime member.

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Olly

The hatred and personal attacks are weird. JVB and Speaker Johnson know a bomb is headed our way: unfettered growth they call it. Dumping the know-how and infrastructure of the Department of Education supplies and training, making sure kids in public schools have plates for lunch and the food to put on them, the staff have pencils and paper, books for learning. It is bizarre that a multi-billion dollar company, or CEO cannot loosen some change to pay for a rebuilt, resupplied office building and bussing training facility, carpeting to window shades. We will pay our taxes to set them up, and they want more.
Citizens are not dumping their garbage on our representatives on this page: Russian trolls are having fun.

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Maria

You sound like a JVB cheerleader. Stop drinking the koolaid. 25,000 jobs will feed a lot of families.

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Woman on the waterfront

Oh Jimmy. I feel like we are watching a man implode before our eyes. He had some momentum to run for QB president before he became a single topic politician. Now all anyone knows JVB for is being the ‘anti-amazon’ guy.

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?????

JVB is wasting a lot of time attacking tens of thousands of jobs instead of addressing the real issues. Where was he when all the new high rise buildings were being developed in LIC? Where is he when the MTA trains are delayed? Where is he on the NYCHA disaster? These issues exiested long before Amazon and will exist long after Amazon but yet not a peep from Bramer.

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39thave

Let me get this straight!
1) Van Bramer originally wrote multiple letters to Deblasio strongly supporting Amazon in LIC.
2) Van Bramer knew (or should have known) of the existing tax incentives offered to all corporations that open in the outer boroughs.
Now Van Bramer is against it? Why? Is it cause the Governor/Mayor finalized the Amazon deal without him?
Is it because he didn’t get a kickback from Amazon?
Van Bramer is a flip-flopping clown🤡 who lost all credibility.

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AQ

JVB and Gianaris are self serving, career politicians clinging to their jobs. They have done nothing to help the middle class.

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Gary Astoria

Van Bramer’s Policies:
– Yes to overpriced hotels/homeless shelters that belong to Deblasio’s friends.
– Yes to neighborhood high-rise prisons.
– No to 25,000 Amazon jobs plus all other jobs that will come along with it.
WTF???

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Rory Sunnyside

I don’t know who in their right mind can believe anything that comes out of Van Bramer’s mouth. This guy is a complete fraud!

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ralph

The worst thing that could happen to NYC. Just wait, all the people saying how wonderful this is? You’ll come to regret your words. I’m not here to argue with anyone, but just to plant a seed of thought for you to please revisit your own views ten years from now, after Amazon had impacted the city in ways that you never thought it could 😉

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Henry

Hopefully, you will revisit your predictions in ten years. A city that doesn’t stay current dies.

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Jacques

Our city should not be helping a monopoly grow more powerful. Amazon controls over half of the online retail trade and it uses the sales data of third party sellers to undercut their prices and make them fail so that it can gain more market share. Amazon frequently sells products below their cost just to cause other businesses to fail. Amazon should not be allowed to control the marketplace while also competing against the businesses that pay to use its marketplace. It is a conflict of interest. It should not be giving tax breaks and other deals to a company worth one trillion dollars. Amazon can pay its own way if it wants to come. The City should not be leasing them public land and allowing Plaxall to develop buildings that defy the zoning regulations so that Amazon can get what it wants.

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JT

Bramer is a flip-flopping weasel. First he’s for Amazon and now he is against. Is anyone buying his BS? He needs to slither back to Sunnyside.

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F jones

Very disappointed in jvb…this is a huge win for LIC..not just more high rise apartments..but employment possibilities…wake up jvb
I’ve been in lic 40 years…this is definitely a plus ..welcome Amazon..sure Bezos is super rich ..so let’s tax millionaires like we used to in 1950s …

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Anon

The problem is, no one will tax the millionaires like they used to. This is going to increase the Uber-gentrification of LIC. Jobs are fine, but they have 10 years to create the 25k jobs, who says they will? Amazon is just out to get as much from these politicians and the city as they can. Don’t believe the hype.

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Jo

Amazon’s tax incentives are PERFORMACE-BASED. If Amazon hires less workers then they will get less tax breaks.

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LICPEOPLE

Only losers will complain about Amazon coming. Normal people will more than welcome such a great improvement to our neighborhood. If you can’t afford LIC because of Amazon, it’s YOUR problem, not Amazon’s problem. Thanks

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AQ

Anon sounds like a JVB cheerleader who believes in conspiracy theories.
FACTS – 25,000 JOBS will feed a lot of families and create a lot of tax revenue.

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Henry

I would like to see JVB leave Queens and for Amazon to stay. JVB is going to damage and set back the advancement of the entire NYC. He is a short sighted, self-aggrandizing fool and should simply crawl back under the rock he slithered out from under. I’m sure the tRump Administration has a position for person like him.

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Frank

JVB is questioning the value because none of said value ended up in his pockets. The guy is as corrupt as they come and is just pissed he didn’t get a turn at the trough. Someone really needs to run against him in the next primary…time for him to go.

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LLCIC

He’s term limited so he’s gone thank God. This is so transparent, the Gov and the Mayor (both despicable) did an end run around the Council bozos. So the bozos are crying foul, because they get no credit, or handouts for their cronies.

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LIC transplant

The jobs coming to LIC are high end corporate jobs. They are not putting in a processing/packaging center.
What’s wrong with progress and growth? Guess what those people with corporate jobs will pay payroll tax. The city will gets its $3B back in no time.

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John

Jimmy Van Bramer You are completely useless. What’s the value you add to any conversation? You always been in the wrong side of the road. Just quit. You are no more than a stick in a wheel.

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John O'Reilly

If the criterion “is [the City] getting a good bang for its buck” is truly a concern for the City Council, then Member Daniel Dromm should immediately commence hearings on the operations of NYC Housing Authority and the City’s homeless services programs. Those municipal agencies, charged with providing essential services to people that Councilmember Jimmy Van Bramer identifies as “so many [who] are hungry at night, cold all day, and unable to afford a doctor when they inevitably get sick”, have consumed far more than $13.5 billion of public monies and have failed miserably in the entire time Dromm and Van Bramer have served in the City Council. Yet, we don’t see any of the grandstanding engaged in by these two politicians on proposals to greatly improve many communities with an organization that has demonstrated success. Let’s face it, politicians Dromm and Van Bramer’s real beef is that they were not included in the Amazon negotiations and thus denied the opportunity to grab whatever they could for themselves and their cronies.

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Welcome Amazon HQ2!

Thousands of well paying jobs?! Who needs them? What we need are morehomeless shelters to house anyone from anywhere, more hotels converted into homeless shelters, high rise jails in well established residential neighborhoods, scholarships for people illegally in our country. More jobs? The people benefiting from these new jobs won’t owe anything and depend on the politicians! That’s not good!

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yourneighbor

I hope that many people remember these flip flopping politicians when they come up for re-election.

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Henry

Remember when JVB runs for Queens Borough President and is anointed by Ms. Katz. Let’s hope that there is a democrat alternative to JVB.

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