Amazon confusion could hurt LI development, IDA officials say
Bill Mannix, executive director of the Islip IDA, said he fears out-of-state businesses will confuse Long Island with Long Island City. Credit: Daniel Brennan
Economic development officials are worried businesses from outside New York State will confuse Long Island with Long Island City, Queens — and not move here after Amazon scrapped plans for a Queens headquarters because of fierce opposition from Queens politicians.
“Some people will equate Long Island with having made this big mistake,” William G. Mannix, executive director of the Islip Town Industrial Development Agency, said Friday, referring to Amazon's bombshell announcement Thursday that it was canceling plans for an East Coast headquarters in Long Island City with 25,000 high-paying jobs.
“We need a regional marketing voice, a campaign to get the message out that Long Island is still open for business,” he said.
Mannix and other economic developers in Nassau and Suffolk counties called for a proactive response to the loss of the biggest development project in state history: Amazon HQ2, which called for $2.5 billion in investment by the online retailer, would have created an estimated $27.5 billion in tax revenue over 25 years. In return, Amazon was to receive nearly $3 billion in tax breaks.
The officials said government at all levels must work with the business community to educate politicians and residents about the benefits of mega projects and the tax incentives required to lure them. Amazon, in a North American competition, selected Queens and Crystal City, Virginia, for its two East Coast headquarters.
Mannix also warned that New York State could compound the damage to its reputation with CEOs by passing bills in the State Legislature that would raise construction costs.
The legislation, sponsored by State Sen. Jessica Ramos (D-Jackson Heights) and Assemb. Harry B. Bronson (D-Rochester), would require companies to pay the prevailing wage — a guaranteed minimum rate above the state minimum wage — on construction that is supported by grants and tax breaks. The prevailing wage is already paid on government building projects.
“The loss of Amazon is a very big black mark on New York State,” Mannix said. “And now, this legislation, which is very likely to pass, would raise the cost of construction between 30 percent and 40 percent on Long Island.”
He and Richard Kessel, chairman of the Nassau County Industrial Development Agency, said they were in a Melville meeting about the prevailing wage bills when they learned Amazon had pulled out of Queens.
Amazon's move “makes it more of an uphill battle to attract new businesses,” Kessel said. “Large companies don’t want to go through the ringer that Amazon went through.”
Kessel said Nassau may grant tax incentives to a housing project in New Hyde Park that would’ve been ideal for prospective Amazon employees. The IDA had planned to publicize the deal so other developers would build apartments in the county’s western neighborhoods.
Post Amazon HQ2, IDAs said they will be more cautious about helping companies.
“You have to be a lot more sensitive and careful … It’s a new world and tax incentives aren’t necessarily liked,” Kessel said, adding Long Island is no stranger to the community protests that enveloped Amazon in Queens.
For many CEOs, the Amazon HQ2 takeaway is that big business is no longer welcome in the Empire State.
“The business community is seriously concerned about the future of New York if this anti-corporate, anti-jobs sentiment is going to prevail,” said Kathryn S. Wylde, CEO of the Partnership for New York City, which represents the city’s large employers. “What are the prospects for business to be able to thrive in New York? Not very good.”
Empire State Development, the state’s primary business-aid agency, was mum Friday on whether it plans to reassure corporate executives.
An agency spokesman pointed to Gov. Andrew M. Cuomo’s statement after the Amazon HQ2 deal collapsed: “We won't be deterred as we continue to attract world-class business to communities across New York State," the governor said.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
