Amazon protest (photo: @nycchange)
Amazon, Mayor de Blasio, and Governor Cuomo have recently gotten a first taste of how deep the backlash against the deal to bring the company to Queens is in New York City. They should be worried. First,Queens Neighborhoods United held an anti-Amazon rally in Astoria that drew hundreds of community members, another in a series of key actions against the deal. Then, members of the New York City Council peppered underprepared executives from Amazon while a raucous crowd booed and threw up signs. More actions are coming.
There is plenty of cynicism running through all three parties to the deal, so weathering some political grandstanding and protests was baked into the process. It’s why they went through a General Project Plan to bypass any public involvement or City Council review (which meant that the hearing was largely political theater — for the moment). No one seriously worried about the deal getting derailed.
But they are wrong and must know it by now. It seems clear that collectively they miscalculated on three factors:
One, Amazon’s terrible reputation as a neighbor and employer is more widely known than they expected.
Two, Americans, including New Yorkers, no longer buy that corporate giveaways are good for them
Three, New York City’s crumbling infrastructure has cost the mayor and the governor any credibility with New Yorkers.
These points are obvious to most people who don’t work for Amazon, the mayor, or the governor, but since no one outside of those three groups were involved in the deal, they were underestimated.
That’s easier to understand given the PR strategy, which became clear at the Council hearing. All three parties are banking on Amazon’s popularity with customers to see the deal through.
That’s potentially a sound, if deeply cynical, strategy. Amazon is really cheap and fast. Over 50% of Americans have an Amazon Prime account. Amazon is trusted more than Congress.
They have early evidence to support that in New York City. At the hearing, Amazon representatives and the city’s president of the Economic Development Corporation (EDC), James Patchett, cited a recent Quinnipiac poll saying that New Yorkers “overwhelmingly support” Amazon locating a second headquarters in Queens: 57% support it, while only 26% oppose it.
Look a bit closer and you’ll see that the result isn’t as strong as it seems. The primary question includes the statement “Amazon locating one of its new headquarters in Long Island City in Queens.” That’s innocuous language, but only 57% supported that?
It’s also a lot different than the reality of the deal. More accurate wording would be “Amazon, a $1 trillion company, getting $3 billion of public money as well as public and private land to build a new campus.”
Not surprisingly, when the poll referenced the “incentives” included, it tells a very different story: 46% of voters said they support the deal, while 44% was opposed.
While Quinnipiac has a sterling reputation and should, framing the $3 billion as “incentives” is doing a lot of heavy lifting. That may be technically accurate, but it is also accurate to call it “subsidies” or a “transfer of public funds” which would likely impact a respondent’s answer differently. Quinnipiac is using the language offered by the city and state, a choice that does involve accepting an ideological framing, which has consequences to the public discourse.
Since Amazon, the de Blasio administration, and the Cuomo administration are relying on the poll as vindication, it’s fair to say that they should be worried. Aside from the slightly generous wording of the poll, the simple fact is that most New Yorkers aren’t all that jazzed about HQ2, and the deal and company have barely seen the type of local scrutiny that is already starting.
Most New Yorkers can’t possibly be closely familiar with details of the deal. Even the City Council just found out about it — the MOU was only made public when the deal was announced.
The details around the $3 billion are worth examining (see a lot more about the incentives here and here), but the key points are troubling. All parties stress that the “incentives” are performance-based which is half-true, but how Amazon’s performance is measured is still intentionally vague. A lot of pubic money will be guaranteed, but Amazon has not made similarly detailed promises.
As more of this and other information about Amazon comes to light, I have a hard time believing that New Yorkers will support the deal. Community groups, the Democratic Socialists of America, elected officials, labor unions, and others are making sure more people hear about those details, through door-to-door canvassing, community meetings, and other efforts. Amazon will counter and spend a lot of money on consultants and hide behind the rushed-to-life community advisory board, but the deal stinks and people will see that for what it is.
The biggest question that Amazon, the mayor, and the governor have to answer is the most obvious: why does Amazon even need help to move to Long Island City?
The Amazon executives were shockingly flat-footed when they were asked this at the hearing. They claimed that talent was the main driver but that subsidies “mattered,” which more or less reveals the obvious: they were coming here anyway. They also tried to repeatedly say that the incentives are performance-based, but that does not answer why the company needs them. And, they had no good answer when directly asked if they would give the incentives for public use, but indicated the company would not.
Holding hundreds of cities over the barrel just to make sure that New York and Virginia (Crystal City) came up with incentives shows you how unethical Amazon is. Holding a gun to the city’s and state’s heads before moving in doesn’t make you a good neighbor. They aren’t and never will be, and that’s even before touching on their anti-union labor practices and what they do to local retail.
None of this is surprising to people who pay attention to Amazon’s history. They have bullied Seattle and small businesses and startups on their platform. They have exploited warehouse workers, third-party delivery services, and even white-collar employees. They have worked with ICE and the DOD. In the City Council hearing company representatives fell over themselves trying to say they aren’t a monopoly, but how else do you have the chutzpah to ask New York for $3 billion while insisting on a completely secretive process including non-disclosure agreements?
Maybe the mayor and the governor couldn’t “stop” Amazon from coming, but they could and should have done everything in their power to protect the many communities of New Yorkers who will be negatively impacted by Amazon (and already are). This deal doesn’t do that. Instead, they put aside their mutual disgust and saw “HQ2” as a legacy-defining victory.
But the political landscape in New York City and across the United States is changing. “Job creation” used to be enough for politicians to support a corporate giveaway, but people know those jobs aren’t good-paying or union-protected. “Spillover effect” used to be enough for technocrats to justify public wealth transfers, but people look around at crumbling subways, crowded schools, and overflowing sewers and wonder why there isn’t enough money to fix those directly.
Amazon, the mayor, and the governor are left hoping that people’s love of cheap goods delivered to their door quickly will save the “HQ2” deal. They think people are lazy and stupid, basically. The reality is, people are overworked and poor. Corporations like Amazon getting billions of what should be public money from politicians are a big reason why. Community groups and the DSA plan to keep knocking on doors throughout the city sharing that message. Let’s see what the polls look like after that.
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Peter Harrison is a member of NYC-DSA and CEO/Co-founder of homeBody, a public benefit startup. On Twitter @PeteHarrisonNYC.
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(photo: Michael Appleton/Mayor's Office)
Recent news that the New York City Department of Sanitation had its trucks evicted from a Chelsea garage on West 30th Street and will now park them on a side street near Manhattan’s Bellevue South Park should raise a question: why does Sanitation need to garage its trucks in the first place? It's not as if sanitation trucks are Lamborghinis requiring careful protection or 1970s era Jaguars that spent more time in the shop than on the road.
Since Sanitation is street-parking the trucks now, and has for several years over near the West Side railyards, why are any garaged overnight at all?
Sanitation, and thus the City, could realize substantial efficiencies, capital and operating cost reductions in its garage operations by using an "asset light" strategy with a much smaller footprint for its structures.
Some of the city’s 2,100 garbage collection trucks have been maintained for years outdoors in various locations throughout New York City.
What if Sanitation used small fueling and washing facilities around the city where, say, a half-dozen trucks could be power-washed and fueled at a time, every so often, in a "roll-in, roll-out" facility, and then parked at a location near the start of their routes?
According to press reports, the Sanitation workers union rules require its trucks to be parked near Sanitation facilities that house lunchrooms, showers, and locker rooms. But what if that were not the case? What if the City were to negotiate with the sanitation union so as to use existing facilities in police precincts, hospitals, firehouses, or in some of the smaller footprint Sanitation fueling and washing facilities, and park its trucks near those facilities?
Why couldn't workers, who are actually first responders to some of New York City’s worst weather events, be reimbursed for parking their personal vehicles in commercial parking lots and garages or at reserved parking spots near where the trucks they operate are parked, along with the 1,000 or so cars and light-duty trucks sanitation department operates?
Certainly, there are some department vehicles that would still need to be garaged. Mechanical brooms, front-end loaders, and snow-melters don’t really lend themselves to outdoor parking. But there are less than 800 of those vehicles -- of the total 3,400 Sanitation vehicles -- and they could be spread among smaller facilities throughout the city.
Going asset light would allow Sanitation to sell off massive garages that occupy huge footprints, some on prime real estate, in Manhattan and the four other boroughs, and instead operate from smaller ready and repair shops where trucks could be cleaned, fueled, and serviced on a fixed schedule and prepared for snow removal service. Equipment for maintenance, repair, and snow-plow service could be trucked to these smaller footprint satellites from central locations in industrial areas of the five boroughs on an as-needed basis.
All of this would, of course, require a radical rethinking of the way the Department of Sanitation currently operates. The unions would have to buy in and members compensated by some means, perhaps by a shorter workday as routes would be accessed more quickly. But re-thinking how Sanitation functions would reduce its operating costs and allow existing facilities to be sold off for development -- as warehouses for UPS, Amazon, FedEx, or other commercial businesses; to ameliorate a dearth of active park play space in Manhattan and other boroughs; or to develop into affordable housing.
“Amazing Grace” Hopper, the pioneering computer scientist and U.S. Navy Reserve admiral who laid the groundwork for COBOL, UNIVAC, and other world-changing computer technology, once said that “The most dangerous words in the English language are, ‘That’s the way we’ve always done it.’”
The Department of Sanitation and civic leaders should take the admiral’s words under advisement and re-think the means by which the city operates the department.
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J.G. Collins is the managing director at The Stuyvesant Square Consultancy, an advisory and consulting firm. On Twitter @StuySquare.
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(photo: @NYC_SBS)
This holiday shopping season has been marked by the ninth annual Small Business Saturday, an initiative intended to encourage people to buy holiday gifts at small, independent brick-and-mortar shops instead of large chain outlets or online vendors. With the retail madness now in full swing, many small and independent businesses must wonder: can “shopping small” be an everyday experience rather than just an annual promotion?
Small businesses are at the center of an emotional debate about the economic and cultural vibrancy of our neighborhoods. But do their contributions justify the attention?
In new research with colleagues at the NYU Furman Center, we measure the importance of local patronage—the steady stream of customers that small and independently-owned businesses rely on to keep their doors open. Neighborhoods count on these businesses for services, personal goods, food, and keeping the streets dynamic and safe. Our results suggest that these benefits are at risk when external factors reduce support for local businesses.
In October 2012, Hurricane Sandy produced a large and unexpected economic shock that devastated a number of waterfront communities in New York City. There were also neighborhoods in the flood zone that were untouched, and we use this disparate impact to understand how an extreme interruption to local demand affects the viability of commercial businesses that rely on a nearby consumer base, like grocery stores or hardware stores. Data show that the storm had a larger negative effect on these neighborhood-based establishments than it did on businesses that draw on broader markets that are less location-specific, like financial services or building supply companies.
Among all classes of businesses we examined, only neighborhood-based establishments suffered meaningful and persistent losses. Moreover, losses were borne almost entirely by the smallest, independent enterprises. Retail operations were nearly 50 percent more likely to close in areas with more severe flooding. They also lost on average nine jobs per city block and experienced a 14 percent drop in sales revenues for a surprisingly long period following the storm – revenues and employment still had not rebounded as of late 2016. Establishments with broader consumer bases – the bankers and builders – also declined on severely flooded blocks. But unlike their neighborhood-based counterparts, this was largely due to fewer new openings rather than more closures. Businesses with broader customer bases also avoided the economic hit that shuttered so many neighborhood establishments.
These findings put numbers on the visceral losses felt by New Yorkers—fewer services and more empty storefronts, essentially the disappearance of a vibrant streetscape that is the lifeblood of urban neighborhoods. There are also fiscal implications for the city overall. Across the city those blocks with severe flooding experienced a net loss of 540 establishments, 3,700 jobs, and $2 million in sales revenue. Even if some of that is regained in other, less affected parts of the city (an outcome not apparent in our data), these are potentially millions of dollars lost in tax revenues.
While our focus was the response to a natural disaster shock, these results also have implications for the economic forces reshaping cities. E-commerce, for example, has dramatically changed how people shop for goods and services in their neighborhoods. There are growing calls for government policies to protect local businesses from such shocks, such as commercial vacancy taxes and rent protections, or for Internet sales taxes that can rein in online competition.
However, our data imply that much of the solution is in the hands of everyday consumers, in their decisions to walk to a nearby retailer rather than to order something from a far away distribution center. Though the price might be a few dollars higher, the benefits that you and your neighbors receive from having vital local businesses are well worth the cost. And even same-day shipping can’t compete with the instant gratification of a quick stroll to the store.
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Rachel Meltzer chairs the Public and Urban Policy M.S. Program at the New School’s Milano School of Policy, Management, and the Environment. On Twitter @ProfRachelM.
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