Amazon will soon be opening one of their giant fulfillment centers on Staten Island, the first major facility for the e-commerce behemoth in the state, the company confirmed on Wednesday.
Construction has already begun on the $100 million, 855,000 square-foot mega warehouse, where orders will be filled and shipped to online customers in New York City and beyond. The center, which sits inside a 200-acre Matrix Global Logistics Park on Staten Island's West Shore, will employ both humans and robots, and is expected to create 2,250 full-time jobs. Such figures would make Amazon the single-biggest job creator in the borough's history, according to Staten Island Borough President James S. Oddo.
"New York continues to demonstrate that we have the workforce, the technology, and the pro-business climate to help companies grow and succeed," Governor Andrew Cuomo said in a press release.
In addition to the 2,250 new jobs, Amazon has promised to retain an additional 886 jobs in New York over the next five years. As a result, the Empire State Development has offered the company up to $18 million in tax credits through the Excelsior Jobs Program — an eyebrow-raising figure for some fiscal policy experts.
"New Yorkers should certainly scratch their heads wondering why taxpayers are subsidizing one of the most highly valued companies in the world (and the world's richest person) while small brick and mortar businesses struggle to stay afloat in competing against online retailers," Alex Camarda, a senior policy consultant at the watchdog group Reinvent Albany, told Gothamist.
While Camarda noted that Excelsior's policy of only awarding benefits once jobs are created makes it less prone to abuse, he also wondered whether Amazon would have created such an outpost regardless of the incentive. "After all," he added, "Amazon has to distribute its products to its New York customers."
"While it's not a lot per worker, taxpayers are justified in wondering why NYS needs to provide any subsidy to a mammoth corporation like Amazon," echoed James Parrott, who serves as the director of economic and fiscal policy at the Center for New York City Affairs.
According to one study by an economist earlier this year, New York's business tax incentives are the most expensive and among the least effective of any in the country. Governor Cuomo's own tax commission reached a similar conclusion in 2013, with an annual report finding that corporate tax incentives "may not result in a good return on investment."
Beyond the controversial subsidy, Amazon's fulfillment centers have also become notorious for their labor practices, and many workers describe a hyper-efficient culture in which complaining about personal injuries or workplace conditions, including excessive heat, could be grounds for firing.
A bombshell New York Times article from 2015 found that at the Seattle-based company, "Losers leave or are fired in annual cullings of the staff — 'purposeful Darwinism,' one former Amazon human resources director said. Some workers who suffered from cancer, miscarriages and other personal crises said they had been evaluated unfairly or edged out rather than given time to recover."
In response to the Times exposé, Amazon CEO Jeff Bezos issued a memo to the company’s 180,000 workers declaring, “The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day.”
A spokesperson for Governor Cuomo's office did not respond to questions about the purpose of the $18 million subsidy, or whether the state would consider rescinding the "performance-based tax credits" if similar labor abuse allegations were to once again come to light.
"We are excited to bring our first fulfillment center to New York and work alongside the state's incredible workforce," Amazon's Vice President of Customer Fulfillment Sanjay Shah said in a statement. "The support of local leaders has been instrumental in our ability to come to New York, and we are grateful for the welcome we've received to bring thousands of new jobs with benefits starting on day one."
UPDATE: Reached for comment, Amy Varghese, press secretary for Empire State Development, said: “By attracting the world’s top companies to New York, we are encouraging innovation and advancement, and further cementing the Empire State’s position at the forefront of the 21st century economy. These performance-based incentives will create good-paying, high-tech jobs for more than 2,000 hardworking New Yorkers, and continue to move Staten Island and the entire state forward.”