December 2, 2023

Noticias Para Ciudadanos Modernos

Amazon gets a free pass that can be rectified in two ways

Written by on November 14, 2023


Amazon gets a free pass that can be rectified in two ways

A vote last week giving Amazon an extra year to hire the 325 workers a land buy mandated felt eerily familiar. I heard echoes of 15 years ago, when the county agreed to spend $3 billion on a stadium for the Marlins.

The deal to benefit Jeff Bezos is not like the one in which Marlins then-owner Jeff Loria reaped hundreds of millions on the back of taxpayers’ debt, most of which we have yet to repay. Still, four factors echoed.

First, the contracts didn’t safeguard the public. When protections were proposed, commissioners simply took the word of a stand-in for Jeff – be it Bezos or Loria.
Second, when promises didn’t come through nobody tried to penalize either Jeff for failure. They were too important to touch.

Third, commissioners were far more focused on controlling jobs and community benefits for their own districts than on protecting all taxpayers.

Fourth, commissioners who realized they’d been taken by a bad contract didn’t ask for penalties in future contracts with not just the two Jeffs but all future Jeffs. They just didn’t learn – maybe didn’t want to.

As we reported last week, the commission gave Amazon a free pass on its defaulted deal to create jobs paying at least $32,000 in a fulfillment center it built after buying a county economic development site in South Dade in 2020 at $3 million below top appraisal. After three years, Amazon hasn’t furnished the building or hired a single person.

Amazon pleaded economics and supply shortages. Nobody noted that it signed the contract during the pandemic as business boomed and defaulted as its boom subsided.

By contract 325 people had to be on payroll more than a year ago, but it will be an extra year – a loss of $10.4 million in Amazon wages in South Dade. But the contract, like that with the Marlins, had no penalty for failure.

Alex Muñoz, internal services director who oversees the contract, told commissioners last week that he could put teeth into a one-year extension to get Amazon to perform in the future – a provision absent in the 2020 deal.

But commissioners merely asked Sam Bailey, Amazon manager of economic development policy, to begin those jobs in a year, and he said, “We have every intention of launching a substantial investment in Miami-Dade County.” (The road to Hell is also paved with good intentions.)

Commissioner Danielle Cohen Higgins had earlier said “I’d like closing language that says, ‘we’re going to give you the extra year, but after that you’re done,’” but she ultimately replied that Mr. Bailey’s “representations are sufficient for me today.” Intentions were enough for her, but are they enough for taxpayers?

Nobody suggested penalties. Instead arose a call pivotal in Marlins contract talks for local politicians to get credit for new jobs and the power to decide who gets them.

“Like always,” said Commissioner Cohen Higgins, “the number-one driving charge that motivates people is jobs, jobs, jobs. That’s a big concern for me.” That’s also what commissioners said in the 2008 stadium vote.

Commissioner Kionne McGhee was more direct, asking Mr. Bailey if his District 9 would be given “right of first refusal for some of those jobs.”

Then, saying that Amazon’s fulfillment center would be “a game-changer for District 9,” he came to the point: “I just want to make sure that my office is at the table … that we will be integral for the selection process for employment for those within that neighborhood.” He reminded Mr. Bailey that they had already discussed in private the dolling out of those jobs but said he wanted it on the record that he controlled jobs. Mr. Bailey agreed.

It was the echo of the big cities more than a century ago, when political bosses were given jobs to funnel to supporters.

Mr. McGhee then went further, stating that the issue was “not just jobs but other benefits that we’re seeing across the state … Is that something that we’re going to entertain also?” Mr. Bailey noted that Amazon had already spent $1.1 million “in the county supporting hyperlocal nonprofits,” but Mr. McGhee sought more: “I would like to see contributions made to nonprofits that are within the community that are in need of support that I believe Amazon is in a position to help.”

Mr. Bailey agreed, Commissioner McGhee made the motion to give Amazon another year to live up to its contract and the deal was done without penalties for nonperformance, past or future.

Two positive steps could come out of this “what’s in it for me?” vote that didn’t come out of the Marlins stadium fiasco.

For one, the mayor controls those who cut business deals that later reach commissioners. The county should routinely cement into deals penalties for defaults. The 2020 contract could have required Amazon to pay the county a slice of unpaid required wages, say 20% – $2 million wouldn’t bankrupt Amazon but would set a bar for failure. Don’t just give it away.

In the other what-if, our new neighbor Jeff Bezos could tell Amazon that another year without wages would harm South Dade, where he went to high school. He has more clout than the county with Amazon, whose holiday hiring is 250,000 nationally but not a single person for its new warehouse. Jeff Loria never cared what the locals thought of him; Jeff Bezos should.

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