NYC “Wins” JetBlue Headquarters
Last week the airline JetBlue declared New York City the winner in a relocation contest against Orlando, Florida. The airline said it will move 880 employees from its current headquarters in Forest Hills, Queens to Long Island City, also in the borough.
The announcement however, seems premature as a public hearing – a necessary step in securing some of the subsidies – hasn’t been scheduled. This makes us wonder, how rock solid is this deal? And remarkably absent from the Mayor’s press release is any mention of the total value of the subsidies the airline anticipates; Good Jobs New York has learned it is approximately $30 million. In addition to retaining its current jobs, JetBlue is expected to transfer 70 jobs from Connecticut and expand its staff by 130 at its new location, the Brewster Building (the location of an ill-fated subsidy deal). Included in the subsidy deal is the right for JetBlue planes to bear the iconic I (heart) NY logo.
This proposal conjures up ghosts of corporate retention deals past:
- No public hearing announcement.
- Minimal details: No Memorandum of Understanding between the airline and the city detailing the proposal has been made public. Did the city conduct a cost/benefit analysis showing that these incentives are a wise investment? If so, how will the city ensure that the company creates and retains the jobs it promised? JetBlue officials report it conducted an “exhaustive” study that led the company to make its location decision, will the airline make that study public?
- Previous tax-payer investment: The airline already benefits from tax-free bonds that helped build its impressive new terminal at JFK airport and is one of the busiest carriers there. JetBlue is also benefiting from the upgrade to one of JFK runways (financed by the Port Authority, Federal Aviation Administration and funds from the American Recovery and Reinvestment Act) and is expected ease its notorious delays and improving service for the airline.
If there’s an upshot, it is that the Bloomberg Administration changed the game, albeit slightly from the days of Mayor Giuliani, by incorporating job creation rather than just retention into subsidy deals. Yet, it has been less than stellar in holding large companies accountable - Pfizer and Metropolitan Life Insurance, for example - and in leveraging subsidies for new jobs at the new Yankee Stadium.
The ability to make this deal transparent and accountable is up to the Mayor. There’s still time, and it seems even some of those on Wall Street are looking for some answers.