New York budget director assigns blame for Amazon HQ2 collapse in scathing letter

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The day Amazon announced HQ2, this graffiti appeared in the company’s planned neighborhood, Long Island City. (GeekWire Photo / Monica Nickelsburg)

New York’s chief number cruncher is calling out critics of Amazon’s defunct plans to build a headquarters in Queens for derailing “the single greatest economic development opportunity” in decades.

Robert Mujica, New York’s budget director, revealed new details Friday about how and why the deal fell apart in an open letter.

Mujica lays blame at the feet of elected officials and a “vocal minority” who were resisting Amazon’s plans to build a 25,000-40,000-person office in New York.

Last November, Amazon concluded it’s “HQ2” sweepstakes by announcing New York and the Washington D.C. area would each get half of the project. The plan made Amazon eligible for up to $3 billion in state and local tax incentives in New York, a key concern of its opponents.

Here’s how Mujica describes the nails in the Amazon HQ2 coffin:

  • Organized labor: Mujica claims that labor unions took advantage of the situation and persuaded New Yorkers to protest the deal. Mujica accuses the Retail, Wholesale, and Department Store Union of using the deal to gain negotiating leverage. In a public meeting in New York, Amazon VP Brian Huseman said the company would not be neutral if employees sought to unionize. When Amazon pulled out of New York, RWDSU Director Chelsea Connor said Amazon was playing hardball “rather than addressing the legitimate concerns that have been raised by many New Yorkers.”
  • Oversight board: Opponents of the Amazon deal secured a victory when the New York State Senate named Sen. Michael Gianaris to the Public Authorities Control Board, which has the power to vote down economic development deals. Gianaris was one of the most vocal opponents of the Amazon deal. The governor told Amazon he wouldn’t approve the nomination but the company worried about what the next appointee would decide, according to Mujica. In conversations with Amazon, the New York State Senate leader would not commit to appointing a supporter of the project to the oversight board. “That was the death knell,” Mujica wrote.
  • Flip-flopping officials: Mujica claims that the politicians who resisted the HQ2 project had previously signed onto the deal, giving Amazon the impression it would be welcomed. “These same elected officials all signed a letter of support for Amazon at the Long Island City location and in support of the application,” he wrote. “They were all for it before Twitter convinced them to be against it.”
  • Majority’s ‘silence’: Although polling showed most New Yorkers supported the Amazon deal, the project’s opponents grabbed more headlines. Mujica called it a lesson for the “silent majority” who partially “bear responsibility” for the deal’s collapse. Mujica wishes he and his colleagues had done a better job setting the record straight about the type of tax breaks Amazon would receive. “Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues,” he wrote. “The city … would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs. You don’t need to be the State’s Budget Director to know that a nine to one return on your investment is a winner.”

Mujica’s chief concern is the message the ordeal will send to other businesses considering locating in New York.

Although supporters of the deal see its collapse as a lose-lose, not everyone is mourning Amazon’s change of heart.

“Today’s behavior by Amazon shows why they would have been a bad partner for New York in any event,” Gianaris said in a statement when Amazon canceled the project. “Rather than seriously engage with the community they proposed to profoundly change, Amazon continued its effort to shakedown governments to get its way. It is time for a national dialogue about the perils of these types of corporate subsidies.”

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