The Ocasio-Cortez Party Turns Amazon’s NYC Plans Into HQ0

(Bloomberg) -- Andrew Cuomo crushed his liberal primary opponent in his reelection race for New York governor in November. Three months later, he suffered one of the biggest defeats of his career. Amazon’s decision to pull out of a planned mega-campus in Long Island City, Queens, is more than a loss for Cuomo. It’s a big victory for a new generation of left-wing, constantly tweeting Democrats, embodied by U.S. Representative Alexandria Ocasio-Cortez from the Bronx.

It was a huge twist, even if there were warning signs. Just a few months ago, the deal seemed like an unalloyed coup for the world’s richest man and New York’s top political power players. Cuomo and New York City Mayor Bill de Blasio—two Democrats who rarely agree on anything—brokered a truce to put together a $3 billion tax break for Amazon.com Inc. that helped secure one half of a second headquarters.

The hubris of Jeff Bezos’s decision to pick two HQ2s, after spending months hyping a beauty pageant-style search, certainly helped fuel the backlash. That New York offered to pay almost double in tax incentives and infrastructure improvements per job than the other selection, Arlington, Virginia, wasn’t a great look, either. But the company’s political flexing also coincided with a Democratic wave across the country. The party won big in the Nov. 6 election—both across the country and in New York state, in particular. Amazon announced the “winners” of its search a week later, seemingly not yet comprehending the new political environment it was stepping into.

AOC torched the proposal immediately, sparking backlash that would boil to the surface of the populist left movement. They made their opposition felt online, even as a poll this month showed that most New Yorkers supported the Amazon expansion. While de Blasio, an avowed liberal, supported the deal, some New York City Council members said they felt slighted by the political process and bristled at purported backroom dealing.

Democrats in the New York State Senate nominated an opponent of the Amazon deal to a board with power to decide the fate of the incentive package. Suddenly, the Democratic electoral surge in the midterms had real consequences. With the ouster of Republican legislators, Democrats in the state Senate were newly empowered. They flexed their muscles.

With Amazon’s deal on less sure footing and a potentially bloody political fight ahead of it, the company decided to preemptively retreat. The withdrawal is a defeat for Amazon, de Blasio and Cuomo. Many people will spend the next few weeks debating who was humbled the most.

But there’s no question that the about-face is the latest pointed example of the newfound political power of leftist Democrats. On the national scene, insurgent liberals have drawn attention to the Green New Deal and pushed presidential candidates to support Medicare for All. Ocasio-Cortez deserves a lot of credit—and she wasted no time declaring a populist triumph over Amazon—but there’s some bigger things going on. It was the Democrat-leaning state Senate pulling the levers here; the Congresswoman just helped bring the heat.

Amazon will weather this retreat without much trouble. The company has promised to keep its 5,000-some workers in New York and increase headcount in the city, though likely at a much lower pace. The company has offices planned in Nashville, Tennessee, and Arlington, Virginia. Bezos has plenty of other drama at the moment, without needing to engage in a street fight with New York lefties.

But the political consequences of this fight shouldn’t be overlooked. The left wing of the Democratic Party has shown that it can scuttle the best laid plans of a governor, a mayor and one of the world’s most powerful companies. The question remains: What will this movement leave in its wake?

And here’s what you need to know in global technology news

“Stay the helipad out!” That was a rallying cry of New Yorkers opposed to Amazon. In Bloomberg Businessweek, Brad Stone offers an inside look at what went wrong and when Bezos knew to get out.

The U.S. government could fine Facebook billions. The Federal Trade Commission is negotiating with Facebook on a potential multi-billion dollar fine over how the social network has handled privacy, the Washington Post reports.

Nintendo announced 18 planned games, including Mario and Zelda titles.

The European Union wants Google and Facebook to pay up. The tech giants will have to pay artists and musicians for work that appears on the platforms.

To contact the editor responsible for this story: Mark Milian at mmilian@bloomberg.net

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