Moody’s: Amazon’s Withdrawal Shows How Politics Can Overcome NYC’s Advantages

The credit rating agency Moody’s on Friday in a report found the decision by Amazon to drop its bid for Queens was a credit negative for New York City and an example of how politics can surpass competitive advantages for the city.

The Amazon plan for Queens highlighted the city’s strengths, such as a skilled and young workforce as well as the record-low crime and mass transit.

“However, political opposition to corporate tax incentives grew and well-organized labor unions protested Amazon’s non-unionized workplace,” Moody’s wrote in its report. “And while the deal only required unanimous agreement by a three-member state panel, one of the panel’s members vocally opposed Amazon’s plan, which ultimately caused Amazon’s withdrawal.”

Amazon walked away from the deal on Thursday, which would have created 25,000 to 40,000 jobs, tied to about $3 billion in tax incentives.

“The announcement is credit negative for New York City and highlights how politics and anti-business sentiment can combine to derail economic development despite competitive strengths,” Moody’s found.

But it’s not gloom and doom for New York City. After all, major tech companies have added jobs to the city without the size of the tax breaks Amazon had sought.

“Companies such as Google and Facebook have expanded significantly in New York City without direct state or city support because they want access to its creative workforce,” the report found.

Upstate Officials Would Have Taken Amazon Jobs

From the Morning Memo:

As Amazon announced it was pulling out of a project to build a campus in Queens, upstate officials quickly said they would have happily taken the offer, which would have amounted to anywhere between 25,000 to 40,000 jobs.

Broome County Executive Jason Garnar in a letter to Amazon CEO Jeff Bezos said he was waiting by the phone in case he called.

“You have our strong support in Broome,” he wrote. “We would welcome you with open arms.”

The same went for Oneida County Executive Anthony Picente, who issued a joint letter with Sen. Joe Griffo.

“Our area would benefit greatly from the jobs and economic infusion that a company such as yours would bring if it chose to establish a presence here and would serve as a great ambassador for Amazon,” they wrote.

It’s unlikely the company will take any of the upstate officials up on the offer, given Amazon’s decision to not reopen its nationwide search for what it was dubbing its second headquarters.

And the small to mid-size cities seeking the project are even more unlikely to be able to accommodate Amazon’s housing and transportation needs, even as they tout what makes their areas great, be it a strong public university or a drone manufacturing facility.

But the calls underscore the desperate need for jobs and broader tax base in many upstate communities that are contending with an eroding population — virtually the opposite issue facing the New York City economy at this moment, as officials there fought back against the proposal.

There wasn’t much mention, though, of the tax incentives the company was to receive if it created the promised jobs — some $3 billion. Critics had questioned the size of the tax break package for one of the world’s richest companies, which had spurred a nationwide contest for the project.

Some states did unveil even larger tax incentive plans, including New Jersey, which may ultimately benefit from the rejection of Queens.

Lawmakers Consider Next Steps After Harassment Hearing

From the Morning Memo:

The first sexual harassment hearing in more than 25 years in Albany could lead to changes in current policy and law, with lawmakers considering an end to the “severe and pervasive” definition.

“The New York state human rights law has myriad barriers for people who have sexual harassment claims,” said Miriam Clark, of the National Employment Lawyers Association. “For one thing, it’s not considered harassment unless it’s severe and pervasive.”

At the same time, the New York City human rights law could be a model for what can be adopted on the state level.

And replacing that standard with a more broad definition of harassment is backed by state lawmakers who want to see a bill passed this session.

“This would impact everyone,” said Assemblywoman Nily Rozic, a Queens Democrat. “What we’ve seen is the standard is pretty arbitrary, way too high, and doesn’t allow for victims to come forward.”

The day-long hearing, which began at 10 a.m. and stretched into the evening hours, featured testimony from survivors and victims of harassment, assault and sexual misconduct while working for state government. The Sexual Harassment Working Group, testifying jointly, had called for the hearing after last year’s sexual harassment law they said fell short.

Sen. Alessandra Biaggi, a Bronx Democrat who co-chaired the hearing, has not ruled out additional hearings on the issue.

Economic Development Reform In The Age Of Amazon

From the Morning Memo:

The plan to bring up to 40,000 Amazon jobs to Queens, tied to $3 billion in tax incentives, remains one of the largest potential economic development deals in the state’s history.

And while voters in a Siena College poll broadly support the proposal for Long Island City, the plan has stoked controversy for organized labor unions, local elected officials and others who are concerned with the size of the incentive package, the power of large corporations and the economic development race fueled between states.

The project also comes after economic development spending has been in the spotlight in state government due to bid rigging scandals in the Buffalo Billion, a signature economic development program for western New York.

Good-government groups once again on Tuesday called for a series of reforms, including a database of contracting deals for state programs and make permanent the comptroller’s authority to review and pre-audit state contracts. Both are provisions Gov. Andrew Cuomo has backed.

“Before the legislature appropriates a dollar for economic development, it needs to answer three questions: First, does the legislature and public know how economic development funds are being spent?” Alex Camarda of the group Reinvent Albany told lawmakers in testimony on Tuesday. “Second, do we know whether they are being awarded fairly and cleanly? Third, is the public getting a good return on their economic development investments? Unfortunately, at the moment, the answers to these questions is ‘no, no and no.'”

The group is also calling for public hearings on development efforts as well as clarifications for the state’s Freedom of Information Law so that it covers all economic development agencies. That provision was included in the budget resolutions of both the state Senate and Assembly.

Amazon Supporters Cheer Siena Poll

Supporters of Amazon’s plan to bring up to 40,000 jobs to Queens tied to $3 billion in tax credits cheered a poll released Tuesday by Siena College finding statewide support for the plan.

“Queens and Amazon are a perfect match,” said Thomas Grech, the president of the Queens Chamber of Commerce. “Our diverse talent pool, entrepreneurial spirit, thriving arts scene and boundless energy will help Amazon continue to grow and thrive, and Amazon’s presence in our borough will create jobs for local residents, catalyze economic activity, support small businesses in our community, as well as generate tax revenue.”

The poll found a broad cross-section of voters back the deal, 56 percent to 32 percent. Among New York City voters, support for the plan stood at 58 percent to 35 percent. In suburban communities, voters there backed the deal 66 percent to 25 percent.

Opponents, meanwhile, questioned the survey’s accuracy.

In a joint statement, Deborah Axt, co-executive director of Make the Road New York; Jonathan Westin, executive director of New York Communities for Change, and Maritza Silva-Farrell, executive director of ALIGN, said the poll failed to capture discontent with the proposal.

“Sienna (sic) spent zero time on the ground in communities where we regularly hear New Yorkers express concerns about Amazon’s anti-worker record, close ties to ICE, and negative impact on Seattle,” they said. “The sample set for their latest poll was heavily skewed toward wealthier and whiter New Yorkers earning $100,000 a year or more. It completely overlooks the intense opposition to Amazon among immigrant New Yorkers who are nonvoters and non-registered voters, and live in places like Queens.”

Lawmakers Seek End To Amazon-Size Deals

From the Morning Memo:

State lawmakers have introduced a bill meant to create a national effort that would prevent competition for taxpayer-subsidized bidding wars for major companies like Amazon seeking to relocate to new states.

The bill, backed by Assemblyman Ron Kim and Sen. Julia Salazar, is being picked up in other states, including Connecticut, Illinois, Florida, Arizona, among others.

The bill, known as the End Corporate Welfare Act, would create an interstate compact ending large incentive packages, essentially creating a truce in the bidding war for major projects with states piecing together tax break offerings for companies.

“Economic development spending in New York is fundamentally broken, and despite the poor results of these policies, we persist in offering corporations blank checks without any accountability mechanism,” Salazar said. “With this interstate compact, we will stop the race to the bottom that companies have used to pit the working classes of different states against each other.”

The measure comes as Amazon plans to bring up to 40,000 jobs to Long Island City in Queens tied to $3 billion in tax incentives. The plan, which is being split with northern Virginia, came after a nationwide search for Amazon’s new campus.

A Siena poll released Tuesday found a majority of New York voters, 56 to 36 percent, backed the Amazon plan, including by a 23-percentage point margin in New York City.

“When municipalities and states bend over backwards for the chance to give billions to mega-companies, we all lose,” Kim said in a statement. “In the last few decades, corporate welfare has extracted untold amounts of resources from our communities, money that could have been used to boost affordable housing, improve transportation infrastructure, and adequately fund our public school systems.”

Gov. Andrew Cuomo on Monday once again defended the deal, calling it a major boost for New York and a signal the state was entering the tech economy.

Cuomo added a potential “tipping point” for the company was the nomination of Sen. Mike Gianaris, a critic of the deal, to a board that could have veto power over the project.

James, Meeting With Cuomo Lays Out Criminal Justice Reform

From the Morning Memo:

Attorney Letitia James met with Gov. Andrew Cuomo on Monday to discuss various criminal justice reform measures, including an end to cash bail and strengthening support services for mentally ill people.

“We look forward to working with the Legislature to reduce the prison population and focus primarily on individuals who are suffering from poverty and individuals who are mentally ill,” James said on Monday. “Being poor shouldn’t be a crime and individuals who are suffering from mental illness should be diverted from the criminal justice system.”

Advocates for criminal justice reform will be in Albany today to push for the legislation. Lawmakers are also discussing ways to end or limit the use of solitary confinement as well as reforms that would lead to speedier trials.

James, speaking with reporters in her office at the Capitol, said the goal is to end a cycle of people returning to prison.

“If we could focus on preventive programs and reduce recidivisim it would go a long way across the state of New York,” she said.

Environmental Groups Calls For Public Financing

From the Morning Memo:

A coalition of more than 30 environmental advocacy groups are backing a push to create a system of publicly financed campaigns.

A letter sent this week to Gov. Andrew Cuomo from the coalition, which includes Environmental Advocates of New York, Environmental Defense Fund and Food & Water Watch, among others, said such a system would reduce the influence of special interests who have a harmful effect on the environmental.

“To take bigger steps towards a cleaner environment and a clean energy system, we first need a cleaner electoral system. Tackling pollution, and changing our economy to meet the threat of climate change, also means taking on the powerful interests that pollute, and oppose a just transition to a clean energy economy,” they wrote in the letter. “Those interests often use their financial might to prevent necessary planet-saving policies, literally putting lives, and perhaps our very existence, at risk. This cannot be allowed to continue.”

A public financing program is more likely this year given the majority control Democrats now have in both the Assembly and state Senate. The proposal would create a small dollar donation limit matched by public dollars.

Earlier this year, lawmakers approved legislation meant to close the LLC loophole, which allows unlimited donations through a web of limited liability companies.

Gov. Andrew Cuomo has called for public financing and lower contribution limits as well as a ban on corporate contributions.

Reinvent Albany Releases Ethics Analysis

From the Morning Memo:

The good-government group Reinvent Albany this week released an analysis of Gov. Andrew Cuomo’s proposed ethics legislation — finding need for amendments on seven of them and opposition to three others.

The group wants the codification of an agreement between Cuomo and Comptroller Tom DiNapoli that would re-establish the comptroller’s power to review contracts before they are approved.

The group has also long called for the creation of a database tracking economic development spending, the subsidies spent by companies and the number of jobs produced.

And they have called for a public financing system on par with New York City’s program.

Cuomo has said he will not back a final budget without the spending plan addressing ethics in some form.

The full analysis can be found here.

Seggos To Remain DEC Commissioner

The top official at the state Department of Environmental Conservation will remain at the post after it was announced late last year he would depart.

DEC Commissioner Basil Seggos on Thursday announced his decision to stay on in an email to department workers.

“I’ve said it many times — this is the best job, at the best agency, and I’m really working with the best people,” Seggos said in a statement.

“If I left, I realized that I would forever regret that decision, so I am excited to continue the fight and continue the incredible progress being made under Governor Cuomo’s leadership. New York is demonstrating national leadership when it is needed most, and this is no time to step out of the fight.”

Seggos has held the job since October 2015 after serving as a top environmental advisor to the governor. He also serves as a U.S. Army reservist.