AMZN Amazon.com Inc

By Jimmy Vielkind 

New York's deal with Amazon.com Inc. to bring its second headquarters to the Long Island City section of Queens has outraged lawmakers who say they were left on the sidelines, unable to weigh in on perks that helped reel in the online giant.

Their concern about process is mixed into criticism about the combined $3 billion of incentives that the state and city pledged to lure 25,000 promised jobs, and the paucity of specific plans to upgrade the neighborhood and combat gentrification.

Top aides to both New York City Mayor Bill de Blasio and Gov. Andrew Cuomo negotiated with the Seattle-based online retailer in secret -- a step they said was necessitated by the competitive nature of the company's process -- and legislators only learned the full contours of the deal when it was publicly announced on Tuesday.

The legislators were further angered to hear that two decisions by Messrs. Cuomo and de Blasio would reduce their formal input into the project. First, the executives bypassed the city's regular land-use review process -- in which the City Council has a vote on major development -- in favor of a centralized plan developed by the Empire State Development, a state authority.

Second, Mr. Cuomo said Tuesday that he would not seek a specific budget appropriation to support promised incentives of $1.7 billion over 15 years. Most of that money comes from existing programs that can be tapped by any company that meets specified job-creation or investment requirements. The state will give Amazon a $505 million capital grant as reimbursement for what it builds on the Anable Basin site.

"I have very significant concerns about the process that took place," City Council Speaker Corey Johnson said at a press conference Wednesday. "That process is there for transparency, for negotiation, for community engagement, for public review."

State Sen. Mike Gianaris, a Democrat who represents western Queens and is poised to become the deputy leader of the chamber in January, railed against Amazon during a protest in Long Island City.

"This is no way to allocate this vast amount of public dollars -- without local oversight or input from the local community," he said in an interview.

In a statement, Senate Republican Leader John Flanagan said Mr. Cuomo should not be picking winners and losers among companies, and instead should focus on developing struggling upstate regions by improving the state's overall business climate.

Since taking office in 2011, the Democratic governor has appropriated -- and legislators have approved -- billions of dollars in loosely defined discretionary pots in the state budget. One, the state and municipal facilities fund, has the authority to appropriate roughly $2 billion.

Morris Peters, a spokesman for the state's Division of the Budget, said the administration had not decided which program to tap. He said a new appropriation is "unnecessary," given the existing authority. The state's grant to Amazon will be paid over 15 years according to an investment schedule. The first planned disbursement, next year, is $33.4 million.

While the money has been appropriated, leaders of the state Assembly and Senate must sign off on any disbursements through a body called the Public Authorities Control Board. In 2016, after construction executives were subpoenaed as part of a bid-rigging scheme, Democrats who control the Assembly refused to release $485 million in funding for a solar panel factory in Buffalo until Mr. Cuomo agreed to issue progress reports.

E.J. McMahon, research director of the fiscally conservative Empire Center, noted legislators have rarely used the control board as a block and in the Buffalo project, "barely put up a speed bump in the end."

Mr. Johnson told reporters he was looking for avenues to give the Council more of a role in the project. A spokesman for Assembly Speaker Carl Heastie said the deal could pay for itself, but should still be "closely scrutinized." Mike Murphy, a spokesman for incoming Senate Majority Leader Andrea Stewart-Cousins, didn't say what Democrats would do at the control board.

"While we support creating new jobs it is hard to ignore the serious concerns being raised regarding the use of taxpayer money, the lack of transparency and the impact on the local community," Mr. Murphy said.

Announcing the deal on Tuesday, Mr. de Blasio said he believed in legislative oversight but that Amazon needed more certainty than the normal processes could provide. Other major developments, he noted, have proceeded with similar terms.

"We're going to have a very consultative process, but that said, you have a democratically elected mayor and a democratically elected governor saying we have an unprecedented opportunity," Mr. de Blasio said.

Katie Honan contributed to this article.

Write to Jimmy Vielkind at Jimmy.Vielkind@wsj.com

(END) Dow Jones Newswires

November 14, 2018 17:20 ET (22:20 GMT)

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