New York State Treasurer calls out unions, state Senate Democrats, and local politicians for the Amazon debacle

The New York State Treasurer has a devastating letter about the responsibility that the Retail, Wholesale and Department Store Union (RWDSU), state Senate Democrats, and local politicians have for the Amazon debacle.

As just about everyone in this state, if not the country, knows by now, Amazon has terminated its plans to bring its second headquarters to New York State. It is a tremendous loss for New Yorkers and I hope that at a minimum, we understand the lessons learned. 

In my 23 years in the State Capitol, three as Budget Director, Amazon was the single greatest economic development opportunity we have had. Amazon chose New York and Virginia after a year-long national competition with 234 cities and states vying for the 25,000-40,000 jobs. For a sense of scale, the next largest economic development project the state has completed was for approximately 1,000 jobs. People have been asking me for the past week what killed the Amazon deal. There were several factors.  

First, some labor unions attempted to exploit Amazon's New York entry. The RWDSU Union was interested in organizing the Whole Foods grocery store workers, a subsidiary owned by Amazon, and they deployed several 'community based organizations' (which RWDSU funds) to oppose the Amazon transaction as negotiation leverage. It backfired. Initially, Whole Foods grocery stores had nothing to do with this transaction. It is a separate company. While Amazon is not a unionized workforce, Amazon had agreed to union construction and service worker jobs that would have provided 11,000 thousand union positions. 

New York State also has the most pro-worker legal protections of any state in the country. Organizing Amazon, or Whole Foods workers, or any company for that matter, is better pursued by allowing them to locate here and then making an effort to unionize the workers, rather than making unionization a bar to entrance. If New York only allows unionized companies to enter, our economy is unsustainable, and if one union becomes the enemy of other unions, the entire union movement - already in decline - is undermined and damaged. 

Second, some Queens politicians catered to minor, but vocal local political forces in opposition to the Amazon government incentives as 'corporate welfare.' Ironically, much of the visible 'local' opposition, which was happy to appear at press conferences and protest at City Council hearings during work hours, were actual organizers paid by one union: RWDSU. (If you are wondering if that is even legal, probably not). Even more ironic is these same elected officials all signed a letter of support for Amazon at the Long Island City location and in support of the application. They were all for it before Twitter convinced them to be against it. 

"While there is always localized opposition, in this case it was taken to a new level. The State Senate transferred decision-making authority to a local Senator, who, after first supporting the Amazon project, is now vociferously opposed to it, and even recommended appointing him to a State panel charged with approving the project's financing. Amazon assumed that the hostile appointment doomed the project. Of course the Governor would never accept a Senate nomination of an opponent to the project and the Governor told that to Amazon directly.  The relevant question for Amazon then became whether the Senate would appoint an alternative who would approve the project.  

As newspapers have reported, Amazon called the Senate Leader and asked if she would appoint an alternative appointee who would support the project.  The Senate would not commit to an alternative appointee supporting Amazon.  That was the death knell.  No rational company, or person for that matter, would assume the Senate would flip flop from appointing a staunch opponent of the project to appointing a supporter of the project.  It defies logic.  However, if that was their plan, Amazon needed a direct representation to that effect from the Senate.  It never came.  Indeed, to this day, the Senate has never said they would appoint a member who would support the project.    Companies assume rational, logical behavior and cannot spend months and millions of dollars on approvals if ultimately the road is a dead end. 

Furthermore, opposing Amazon was not even good politics, as the politicians have learned since Amazon pulled out. They are like the dog that caught the car. They are now desperately and incredibly trying to explain their actions. They cannot. They are trying to justify their flip-flopping on the issue with false accusations that it was a 'backroom deal.' Let's remember that as a condition of the competition, every bid was sealed to prevent governments from altering their bids to be more competitive. Empire State Development supported the numerous local applications in the state who wanted to bid for HQ2, but on the condition that the local elected officials and community supported it, and Long Island City was no exception. 

In working with New York City, we advanced Long Island City's application with the signed support of the area's local elected officials, including State Senator Mike Gianaris and New York City Councilman Jimmy Van Bramer. Both Gianaris and Van Bramer flip-flopped on this position after Long Island City was chosen, distorting the facts of the agreement and mischaracterizing the tax subsidies as 'a cash giveaway.' Now that Amazon has pulled out, local politicians are feeling the backlash from the project's previously silent supporters and are dissembling. Local senators' claims that their phone calls were not returned are particularly offensive, given that the local senator was the first person ESD President and CEO Howard Zemsky met with when we made the HQ2 announcement. I also remained in contact with him about the project as the State Budget Director, and he refused to sit on the community engagement board or even meet with Amazon representatives. Efforts were made to address legitimate concerns, all of which were ignored. . . .

The rest of the letter is available here.