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Pointing to Amazon Announcement, Long Island City Co-op Renews Calls for Similar Tax Relief


640px long island city new york may 2015 panorama 3

(Photo: King of Hearts/Wikimedia Commons)


Amazon’s announcement that it will locate one of its two new “headquarters” in Long Island City, Queens triggered immediate backlash among some elected officials and residents of the community who fear the effects it will have on local housing prices and already strained infrastructure, among other consequences. But the residents of CityLights, the largest affordable co-op in Queens, are particularly incensed by the deal, and are calling out city and state officials for giving the nearly trillion-dollar technology giant billions in public subsidies while continuing to deny their own demand for an extension of a property tax abatement that they enjoyed for two decades.

Amazon, CityLights residents also say, will pay far less for leasing land for its new campus than the co-op does each year.

CityLights is a 42-story, 522-unit building home to 1,000 mostly middle- and fixed-income New Yorkers, and is managed by Queens West Development Corporation, a subsidiary of the state-run Empire State Development (ESD), a non-profit economic development agency. The building phased out of a 20-year tax abatement program in July and also saw a nearly doubling of its tax assessment by the city. The building now faces a $5.2 million tax bill -- it was $5.8 million but was reduced after the residents appealed to the city -- which threatens, they say, to push residents out of their homes because of a roughly 60 percent increase over five years in payments-in-lieu-of-taxes (PILOT). (The Amazon deal with the city and state also includes a PILOT program, whereby instead of paying taxes an entity contributes to some other fund, such as an infrastructure bank.)

Built on state-owned land, CityLights’ ground lease alone costs nearly $500,000 annually for the 700,000-square-foot building. By comparison, Amazon is expected to pay about $850,000 for the roughly 4 million square feet that the company will occupy in Long Island City.  

In a letter sent Tuesday to ESD President Howard Zemsky, Citylights Board President Joanna Rock called for the CityLights ground lease to be forgiven. “It is absurd that we are forced to pay half-a-million-dollars a year to ESD when our apartments were sold to us by the State under the guise of affordability,” she wrote. “But it adds insult to injury that Amazon will be charged far less than our “affordable” complex for the privilege of being in Long Island City.”

In a phone interview, Rock said it was “shameful” that CityLights residents have had to fight the city and the state for over a year-and-a-half for much-needed relief while Amazon was enticed with untold incentives (the negotiation process was in secret, with non-disclosure agreements signed).

“We watched the neighborhood go from dilapidated warehouses to high-rises and we’re being valued based on the rental buildings around us because that’s how the city does it,” she said, “and then Amazon comes in, and not only are they getting all these incentives, but [their ground lease] is like 85 percent less than what we pay. We’re a co-op, a not-for-profit. They are one of the wealthiest companies in existence.”

In a letter to CityLights residents in June, Zemsky indicated that ESD was working with the city “to craft a tailored solution.” But, he noted that the state could not act without approval from the city’s Department of Finance. Neither ESD nor the city Department of Finance responded to requests for comment for this article.

“I’m not even sure how to put into words how upsetting this is,” Rock said.

Local elected officials also took umbrage at the plight of CityLights residents in light of the Amazon deal. “Empire State Development is supposed to promote and protect our local economy, not pad the pockets of the richest man in the world,” City Council Member Jimmy Van Bramer, who represents Long Island City, said in a statement on Tuesday. “It is ridiculous that the bad HQ2 deal would charge Amazon a significantly lower rate per square foot for its ground lease than Citylights, the largest affordable housing co-op in Queens. The State must preserve the affordability of Long Island City and prioritize longtime residents and working families when dishing out tax breaks, not large corporations.”

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by Samar Khurshid, Senior reporter, Gotham Gazette
     

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'Doubt Upon the Mayor's True Motives': Investigations Commissioner Responds to Firing by De Blasio


Mark Peters

Mark Peters (photo: William Alatriste/City Council)


Department of Investigation Commissioner Mark Peters, in his final days on the job after Mayor Bill de Blasio fired him on Friday, refuted the mayor’s stated reasons for the termination in a bluntly worded letter sent Monday to City Council Speaker Corey Johnson and Council Member Ritchie Torres who chairs the Committee on Oversight and Investigations, and released to the news media (read the full letter below).

Peters, who was once treasurer to de Blasio’s first mayoral campaign, has had a tense relationship with City Hall over the last few years. Under his leadership, DOI has conducted several investigations into city agencies that have angered the mayor and embarrassed his administration. Peters was asked to resign Friday afternoon but refused, following which he was terminated in a meeting with First Deputy Mayor Dean Fuleihan. De Blasio announced that Margaret Garnett, New York State’s executive deputy attorney general for criminal justice, was being nominated to replace him -- the DOI commissioner is the only city agency head that must be approved by the City Council.

Along with repeated clashes with City Hall, part of the pretext for Peters’ firing was the finding of an independent investigator that the DOI commissioner overreached his authority and made misleading statements to the City Council and to top administration officials about his attempt to bring a Department of Education investigative office under his control. “The DOI Commissioner is supposed to be most pristine of all – that’s not pristine,” de Blasio said at a Friday news conference, where he said he regretted appointing Peters to the post and explained his decision to fire him.

Under the city Charter, Peters was allowed an opportunity to give a public explanation. In his letter on Monday, he pointedly sought to rebut the administration’s rationale for letting him go. He insisted that the independent investigator’s report on his actions, while pointing out issues for which he had apologized, “contains multiple factual errors that the Mayor now repeats” and said that the mayor’s interactions with DOI and current investigations into the administration “must cast doubt upon the Mayor’s true motives.” Peters said the mayor’s actions could have a chilling effect on the independence of the next DOI commissioner and said he was willing to appear before the City Council to apprise them of investigations into the administration “so that the Council at least has a record of these investigations in the event that they are unreasonably delayed or discontinued by my successor.”

He detailed interactions with the mayor and other members of the de Blasio administration, including one phone call on which he alleges de Blasio screamed at him over an imminent report and instances whereby he alleges that administration officials repeatedly attempted to stop him from releasing damning reports, such as those into NYCHA and the Department of Correction.

"The suggestion that anyone at City Hall – including the Mayor – tried to stop any DOI review is entirely false,” de Blasio spokesperson Eric Phillips said in a statement Monday morning. “What is not in question is that Margaret Garnett is the most qualified, independent person to lead DOI and restore credibility in its important work."

Council Member Torres, in a statement on Monday, said Peters’ letter “reveals a pattern of interference with DOI investigations and intimidation against DOI officials that borders on the unethical and should be illegal.” He did not, however, say whether the Council would call Peters in to testify at a hearing.

Peters' full letter: 

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by Samar Khurshid, Senior reporter, Gotham Gazette
     

Read more by this writer.

Amazon’s Recent New York Campaign Contributions Mostly to Members of Congress


cuomo jeffries

Gov. Cuomo & Rep. Jeffries (photo via Governor's Office)


Before Amazon announced the placement of one of its next satellite “headquarters” in Queens, drawing mixed reactions from local lawmakers and significant overall pushback, the company’s campaign finance footprint in New York shows it was spreading its money around to many New York politicians, mostly those at the federal level.

Eight members of the U.S. House of Representatives from New York City, all Democrats, who signed a now infamous letter last year to compel Amazon to consider the city, received more than $26,000 in total campaign contributions from Amazon from the beginning of 2017 to October 2018, according to Federal Election Commission (FEC) filings, with four of the members receiving $7,500 of that total before signing the letter.

Rep. Hakeem Jeffries, whose district includes part of Queens, received $8,000 total from Amazon in four separate contributions to his campaign since 2017, including $1,500 before he had signed the letter and $6,500 afterward, a time period that coincided with Jeffries’ recent reelection to the House, though he did not face serious opposition. Jeffries’ office did not respond to a request for comment for this story, but he said in a statement to Cheddar that the deal “will supercharge New York City’s reputation as the single best place to do business in America.”

Brooklyn Rep. Yvette Clarke received $5,000 from Amazon, half before signing the letter and half since -- Clarke did face a tough primary challenge this year, narrowly defeating Adem Bunkeddeko before cruising to victory in the general. In a statement for the city’s Economic Development Corporation (EDC) that was sent to members of the media upon the Amazon announcement, Clarke said, “Amazon’s decision to locate a headquarters in New York City is a testament to the strength of our technology sector.”

Other letter signees who received Amazon contributions include Rep. Eliot Engel, Rep. Carolyn Maloney (whose district includes Long Island City), Rep. Gregory Meeks, Rep. Nydia Velazquez, and Rep. Adriano Espaillat, all of the five boroughs. Maloney called for a fair “public review” of the deal in a statement to Politico, arguing that “[a] beneficial deal will withstand public scrutiny.”

Upon the announcement of the deal to bring Amazon to New York City, Espaillat issued a statement of praise, saying in a tweet, “Welcome to New York City, @Amazon. We have the best & brightest technologically skilled workforce that is ready & willing to work & invest in our community & help our economy continue to grow,” while Velazquez issued a statement criticizing the process and outcome, saying, “Many New Yorkers, myself included, are concerned by the enormous incentives this package extends to Amazon.”

Rep. Joe Crowley of the Bronx and Queens received $2,500 from Amazon before he signed the letter, according to FEC filings. He lost his seat in an upset to now Congressional Representative-elect Alexandria Ocasio-Cortez, who has been a strident critic of the Amazon deal. The democratic-socialist tweeted that she finds the deal “extremely concerning,” arguing that the money for tax breaks for Amazon could be better spent on the “crumbling” subway and disenfranchised communities.

It’s unclear if any of the members of Congress played a role in the negotiation process, which was apparently led by Cuomo, along with de Blasio and members of their two teams -- those involved apparently signed non-disclosure agreements at Amazon’s insistence. Members of Congress’ support or opposition, however, can play a crucial role in the overall atmosphere around such a deal and the public perception thereof. For the most part, Amazon is more concerned with federal regulations and nationwide tax policy, evident from its campaign funding patterns. Data from OpenSecrets.org shows that Amazon gave about $1.17 million to federal candidate campaigns in 2018 alone, 52% of which went to Republicans and 48% to Democrats.

Amazon has also given some campaign contributions at the local level, including $1,000 to Assembly Speaker Carl Heastie’s campaign committee in January of this year, according to state election records. Heastie did not respond to a request for comment, but the Bronx Democrat told the New York Times in a statement that “this deal has the potential to more than pay for itself.” He added that, “Of course we take our role in approving aspects of this deal very seriously and we will be closely reviewing it.”

The only other local lawmaker whose campaign funds Amazon added to was Republican state Senate Majority Leader John Flanagan, who received $1,000 in January, according to state election records.

New York City and State have agreed to roughly $3 billion in financial incentives to Amazon to settle in Long Island City, including tax breaks and rebates mostly from existing economic development programs that would be applicable to other companies, as well as a roughly $500 million capital grant from the state that is discretionary. The deal is based on a pledge by Amazon to create 25,000 new jobs in the city over 10 years, at an average salary of $150,000 per year. Some of the incentives are directly tied to those jobs coming to fruition. The company may also qualify for new federal tax savings.

Critics have cried foul about a secretive process with virtually no public input before a deal was struck (there will be some before everything is finalized) and that there are billions of dollars of incentives going to one of the wealthiest companies in the world. A number of elected officials did praise the deal, including U.S. Senator Charles Schumer of New York, the Democratic Senate minority leader. Schumer received a total of $10,000 from Amazon in three separate contributions to his campaign committee in 2015 ahead of his reelection the following year, according to FEC filings. He has not received any funds from Amazon since his 2016 reelection.

Some of the criticism towards the Amazon deal is tied more broadly to Cuomo’s economic development programs and their incentives for companies to relocate or create jobs. Flanagan, whose 2018 campaign got the relatively minor boost from Amazon, criticized Cuomo for giving handouts rather than working to improve New York’s overall economic climate. Flanagan’s majority conference, which is handing over the reins next year to Democrats who flipped the chamber on Election Day, has signed off on budgets that have included Cuomo’s programs.

Amazon, a trillion dollar-company, spent $110,000 lobbying the state Assembly, Senate, and executive branch on bills related to taxation and regulation of internet companies from the beginning of 2017 to October of 2018, according to state lobbying records. JCOPE (the Joint Commission on Public Ethics) lists Amazon lobbying activities as only related to “internet/online sales & related issues,” but specific bills lobbied on include the establishment of a task force to study an internet marketplace tax and bills that propose to regulate voice-recognition technology.

The company also spent over $120,000 lobbying New York City government in the last two years for participation in their cloud computing services, according to city lobbying records.

The records do not show lobbying related to the new headquarters in Queens. That process appears to have been removed from official lobbying and instead part of the competition Amazon announced, wherein it received hundreds of pitches from governments and coalitions around the country. There are no records of Amazon donating to the campaigns of either Cuomo or de Blasio.

Jeff Bezos, Amazon CEO and one of the wealthiest people in the world, said in a statement on the day of the announcement that the new “headquarters” split between New York and Virginia “will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”

Hiring for the new offices is scheduled to begin in 2019, according to Amazon. Governor Cuomo has said that the new office campus and related employment will generate more than $27 billion in tax revenue over the next 25 years.

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by Jake Shore for Gotham Gazette
  

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