State Sen. Michael Gianaris’ war on Amazon has led the Queens lawmaker to target tax incentives tied to the Trump administration and meant to spark investment in poorer neighborhoods.
Gianaris, whose Queens district includes the Long Island City blocks being eyed for the company’s proposed new outpost, announced legislation on Wednesday that would eliminate state tax breaks for capital gains when investing in federal Qualified Opportunity Zones.
“What was intended to benefit investment in economically distressed areas is now being used to boost investment in very wealthy area,” Gianaris said. “It’s completely bastardized the intent of the program and turned it on its head.”
The area around the waterfront site is one of 306 census tracts in the city that Gov. Cuomo recommended as “opportunity zones.” The Treasury Department signed off on the designations late last year.
Amazon Public Policy executive Holly Sullivan told the City Council last week that the e-commerce giant will not dip into the Opportunity Zone tax pool.
“I can’t talk to the designation of the Opportunity Zone … but we will not be using the Opportunity Zone on this project,” Sullivan said.
The company is already in line for $2.8 billion in grants and tax breaks from New York state and the city. Lawmakers and labor leaders argue the company is not doing enough to earn the incentives.
Gianaris and other critics also contend separately that the Trump administration program provides deep tax cuts to companies investing in already gentrifying areas.
An Urban Institute study of the program’s list of more than 8,700 Opportunity Zones found that nearly a third were already gentrifying, based on rent increases and the percentage of college-educated residents.
The incentives were part of the GOP’s 2017 tax overhaul and allows investors who put capital gains into so-called “Opportunity Zone” projects to defer taxes until 2026.
The White House did not immediately respond to a request for comment on Gianaris’ bill.
State Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) set up a potential clash with Cuomo earlier this week by appointing Gianaris to a seat on the New York State Public Authorities Control Board, which has possible veto power over the deal. Cuomo will have to sign off on the appointment.
“I do believe the Senate is finding its way. I do believe they are putting, in this case, politics ahead of government,” Cuomo said on WAMC Radio’s Midday Magazine with Alan Chartock on Tuesday.
Meanwhile, a poll, conducted by HarrisX on behalf of Amazon, found 69% of New Yorkers approve of the internet retailer coming to the city, with 19% opposed.