New York, NY — Today, New York City Council Members Brad Lander, Jumaane Williams, and Jimmy Van Bramer will introduce legislation to prevent New York City from signing Amazon-style “non-disclosure agreements” (NDAs) during negotiations with corporations or prospective developers regarding economic development projects.
The legislation comes amidst national criticism of Amazon’s bidding process for HQ2 that required cities to sign non-disclosure agreements — pitting cities against each other in a race-to-the-bottom — resulting in local governments offering wasteful tax giveaways and counterproductive business incentives.
“The process that Amazon dictated — and that New York City acquiesced to — kept the public in the dark and encouraged a race-to-the-bottom of needless corporate tax breaks,” said Council Member Brad Lander, Deputy Leader for Policy. “We must reform economic development policy to push back against concentrated corporate power. Under a different White House, perhaps federal policy could help protect cities from crony capitalism. But in our current reality, prohibitions on NDAs are one important step that cities can take to restore transparency and better safeguard the public interest in economic development.”
“It’s outrageous that the Amazon deal was done in total secrecy by the Governor and Mayor– and as we continue to fight this deal, I’m proud to partner with Council Members Lander and Van Bramer on a bill that will help prevent back-room deals like this from happening in the future,” said Council Member Jumaane D. Williams.”Our government should be taking steps to act as a check on rampant corporate expansion, to ensure that any new development is designed with the greatest possible benefit to New Yorkers in need and to prevent any unintended consequences. The legislation we introduce today, and the transparency it will bring when it is law, will serve to prevent these secret giveaways in the future. The Governor and Mayor failed us in circumventing the process and hiding behind closed doors- but now, we’re watching.”
“Transparency is a hallmark of good governance. The use of NDAs by our City in economic development negotiations involving billions of taxpayer dollars is undemocratic and wrong,and should be prohibited. We must do all that we can to prevent the secretive bidding process that led to the $3 billion Amazon giveaway from ever happening again,” said Council Member Jimmy Van Bramer, who represents Long Island City. “We’re not giving up on the fight against the Amazon deal,but this new legislation will serve as an essential tool to ensuring future deals go through a democratic, transparent process.”
“Corporations should not be allowed to dictate to our governments what they are allowed to share with the people they serve,” said New York State Senator and incoming Deputy Majority Leader Michael Gianaris, who represents Long Island City in the State Senate. “The secretive process surrounding the Amazon deal sets a dangerous precedent that must be prohibited so our government answers to the people it serves and not wealthy corporations. I applaud Council Member Lander and look forward to passing my similar bill in the State Senate.”
Amazon announced its plan for a new corporate headquarters in 2017, promising 50,000 jobs and a $5 billion investment in construction, and invited cities in Canada, Mexico and the United States to submit proposals. The Hunger Games-style bidding process has been called a “con” and a “ruse” due to cities battling against each other to secretly provide the most generous incentive packages, and Amazon’s success at extracting gigantic tax breaks totaling more than $2.8 billion from the two winning locations, Long Island City in Queens, New York, and Crystal City in Arlington, Virginia.
The first round of bidding gave Amazon access to a massive data set with discretionary information about 238 American cities for its proprietary use in future expansion and negotiation.
Amazon then required the 20 finalist cities to sign non-disclosure agreements. The Amazon NDA includes a provision requiring those cities to “give Amazon prior written notice sufficient to allow Amazon to seek a protective order or other remedy,” in case a reporter or member of the public files a Freedom of Information Act or public records request.
The City Council legislation will prohibit New York City from signing such non-disclosure agreements in any future economic development deals, preventing the secret dissemination of proprietary city information, such as future infrastructure projects, real estate deals, talent pool, and local labor costs, as well as preventing giant tax giveaways without public knowledge or input.
The legislation has received support from renowned economic development experts as a step cities can take to reform the economic development process in the public interest.
“Good government requires transparency. Making local governments sign NDAs for economic development is direct assault on democracy,” said Richard Florida,Director of Cities at the Martin Prosperity Institute. “The practice must be stopped. And NYC Council Member Brad Lander’s new bill is an important step in stopping corrosive crony capitalism and wasteful business incentives.”
“I applaud Council Member Lander for proposing to ban non-disclosure agreements in economic development deals,” said Greg LeRoy, Executive Director of Good Jobs First. “NDAs are one way taxpayers are systematically excluded from the process of shaping their communities’ futures. Big corporations and the tax break-industrial complex are the winners when public officials are gagged and mega-deals like Amazon HQ2 are negotiated in secrecy.”
“As Amazon’s HQ2 scheme has made abundantly clear, NDAs are being used as a manipulative tool to circumvent public oversight. By keeping the public in the dark, companies like Amazon have been able to loot the public coffers with abandon, while also getting local officials to agree to highly unpopular development deals,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance. “Concentrated economic power inevitably translates into political power. Amazon and other giant companies increasingly influence and control local governments.Prohibiting NDAs is a critical step toward correcting this imbalance and restoring the rights and authority of the public.”
Full text of thelegislation can be found here.