Here’s one big package Amazon probably won’t be returning.
Even before Amazon was showered with incentives to open a new headquarters in New York City, the company received up to $45 million in state grants from a program that rewards businesses that create high-paying jobs.
But the state’s Excelsior Jobs Program specifically excludes companies “engaged predominantly in the retail or entertainment industry,” two enterprises that are practically synonymous with the company name.
With its successful online sales strategy, Amazon has redefined the way consumers shop. And it’s music and video streaming services, which include original programming, have helped the company carve out a nice chunk of the entertainment market.
Yet, when it comes to state incentives, Amazon goes under the banner of a “tech” company,” and thereby eligible for up to $1.2 billion in tax credits.
In fact, many online and brick and mortar retailers have received Excelsior grant money despite the prohibition.
Kathy Wylde, the president of the business advocacy group the Partnership for New York City, said that’s consistent with the way the program was intended.
“Retail companies that are setting up IT jobs would not be considered retail (under Excelsior),” she said.
Wylde’s group was instrumental in pushing to replace the Empire Zone program.
“I don’t think it matters where Amazon’s headquarters are in the shift from conventional retail to the internet,” she said. “It’s irrelevant where Amazon headquarters, because Amazon in Seattle has the same effect as Amazon in Long Island City.”
Long Island City will share the mega-retailer’s second headquarters under a deal announced this week by Gov. Cuomo, Mayor de Blasio and Amazon representatives.
Though the company has promised to bring 50,000 jobs to New York, the deal has been roundly condemned by critics who said Amazon got too many tax breaks after a process that got little public input.
“I will always advocate for economic development and jobs in New York, but when the process is done behind closed doors, with zero community input and nearly $2 billion in subsidies to a global behemoth, I am going to be skeptical,” City Council Speaker Corey Johnson said in a statement.
But state Budget Director Robert Mujica said the rules are different now.
“The jobs that we’re paying for here are not the retail jobs,” Mujica told the Daily News. “Everything has changed. Technology has changed a lot of different industries. The focus of the program is on giving incentive to locate high paying jobs. The reason retail is excluded is because retail traditionally does not provide high-paying jobs.”
Among Long Island City residents, there’s mixed reaction to newcomer — but a general consensus Amazon didn’t need any financial incentives.
“I think this is a great opportunity for a lot of people and it can make the neighborhood even better than it already is,” said Danny Park, 31, who works as a software engineer in Manhattan. “But I think Amazon would have come here anyway, even if New York didn’t give them more than anyone else. So I guess that seems kind of wasteful.”
Freelance personal assistant Taryn McMillian, 38, said she hopes to benefit from influx of Amazon workers, though “I don’t think Amazon needs to be subsidized in any way.”
“That’s potential new clients and so it’s good for the economy overall,” she said. “But of course I’m already worried about rent increases next year.”
Waitress Christa Cordero, 29, of Astoria, called the subsidies “completely unnecessary.”
“Amazon doesn’t need any more money, at all,” she declared. “They shouldn’t get anything from New York.”
And she, too, is worried about the effect the retailing behemoth will have on the neighborhood.