Anti-Amazon Backlash Rose From Grassroots to Stymie Bezos

(Bloomberg) -- A firebrand of a freshman congresswoman. Two career politicians who bulldozed local interests. And two others who harnessed fury over corporate welfare going to the world’s richest man.

Amazon.com Inc. expected some public outcry over its choice to expand in a redeveloped Queens industrial area along New York City’s East River. But Jeff Bezos, its founder and chairman, didn’t count on a combination of political missteps and savvy that would drive it out of town.

Among the fatal errors: Three-term Governor Andrew Cuomo and two-term New York City Mayor Bill de Blasio, both Democrats, underestimated how an anti-corporate message from Congresswoman Alexandria Ocasio-Cortez, in office less than two months, would take root so deeply and so quickly.

“Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world,” Ocasio-Cortez, a self-described Democratic Socialist, said on Twitter.

The victory for Ocasio-Cortez and her fellow progressives, though, left others wondering how much damage had been done to New York City’s long-term prospects for economic growth. In a tweet, former Goldman Sachs Group Inc. CEO Lloyd Blankfein said some progressive Democrats may not “deserve either title" after helping derail Amazon’s plans to build part of its second headquarters in the city.

Union leaders who were counting on those jobs were equally frustrated.

“Politics and pandering have won out over a once-in-a-generation investment in New York City’s economy, bringing with it tens of thousands of solid middle-class jobs,” Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, said in a statement. “This sends the wrong message to businesses all over the world looking to call New York home. Who will want to come now?”

Who Will Pay?

And who will pay politically? Just days after saying the Amazon jobs were “mission critical" for the city’s tech-hub aspirations, de Blasio lashed out at the company for how it handled its role in selling the project.

“We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world," de Blasio said in a statement.

Cuomo blamed his colleagues in Albany. “A small group of politicians put their own narrow political interests above their community,” he said in a statement. “The New York State Senate has done tremendous damage. They should be held accountable for this lost economic opportunity."

De Blasio and Cuomo had put on a rare united front to lure Amazon. At the same time, de Blasio has been traveling the country trying to establish himself as a national spokesman for progressive Democrats who are decrying the country’s income inequality.

Republicans quickly moved to underscore the embarrassment for the pair. “Until we have a governor and legislature who are serious about reversing the state’s economic decline and making us competitive again, we are going to continue to lose jobs and people to other states,” Ed Cox, chairman of the New York GOP, said in a statement. “This should be a huge wake-up call.”

In a statement, Nick Samuels, a vice president at Moody’s Investors Service, called the move a “setback" for New York that “illustrates politics and anti-business sentiment can derail economic development despite competitive strengths." He said that high-tech employment will grow more slowly without the company’s new jobs.

Key to the backlash that cratered the deal were City Councilman Jimmy Van Bramer and State Senator Mike Gianaris. They connected with community groups angered by the prospect of being priced out of the area by an influx of high-paying jobs into a city that’s already becoming increasingly unaffordable and riven by income inequality.

If Cuomo and De Blasio’s labor could be salvaged, it would be with the help of labor groups who’d welcome the jobs. But the politicians failed to mount an effective counter-campaign with construction and building services unions to back $3 billion in incentives for a project that would create jobs, further diversify the city economy and generate more than $27 billion in revenue.

City Council Speaker Corey Johnson, a Democrat who also is the acting public advocate and a fierce Amazon critic, said other companies were welcome “if you’re willing to engage with New Yorkers.”

“I hope this is the start of a conversation about vulture capitalism and where our tax dollars are best spent,” Johnson said in a statement. “I know I’d choose mass transit over helipads any day.”

‘Us, Not Billionaires’

Make The Road and New Economy Project, two New York progressive groups, were among more than a dozen to put out a joint statement saying they celebrated Amazon’s abandoning the site.

“This victory is a clear demonstration of the power of workers and communities across Queens and New York who came together and are fighting for a city that works for us and not for billionaires like Bezos,” the groups said. They would support other cities “facing Amazon and Bezos’s bullying tactics.”

The tax breaks and grants were to return as much as $27.5 billion in tax revenues by 2045, plus 25,000 to 40,000 jobs paying an average of $150,000 a year. HQ2 held the promise of making the city a tech leader rivaling the Silicon Valley and Boston’s Route 128 corridor.

Still, the governor and the mayor failed to connect with local officials early on -- and after the deal was signed -- to get input on what community benefits like housing and job guarantees they wanted from Amazon.

“There needed to be community outreach to get counter-rallies for the jobs that were there," said George Arzt, a Democratic political consultant who was press secretary for former New York Mayor Edward Koch in the 1980s. “You needed to get the construction unions involved in support. This takes a whole campaign across the board. I never saw it.”

“If Bezos came in right at the beginning and offered $100 million for refitting of the subway station and other amenities for the subway, that would have been a homerun,” Arzt added. “He would have had the community on his side.”

For all the drama, though, opponents said Amazon’s arrival would have much less of an impact than Cuomo and de Blasio would’ve had the public believe. The city’s economy already employs 4.6 million people, and it produced 71,000 new jobs in 2018.

“Amazon’s job is to make money -- my job is to make sure the people in the community are not hurt,” Gianaris said at a news conference. “This is a very dangerous moment in our history where big corporations think they can tell governments what they should be doing.”

--With assistance from Claire Ballentine and Maria Jose Valero.

To contact the reporters on this story: Elise Young in Trenton at eyoung30@bloomberg.net;Danielle Moran in New York at dmoran21@bloomberg.net;Martin Z. Braun in New York at mbraun6@bloomberg.net

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, William Selway

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