Silicon Valley’s Newest Rival: The Banks of the Hudson

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When Facebook was searching for another New York office, one big enough to fit as many as 6,000 workers, more than double the number it currently employs in the city, it had one major demand: It needed the space urgently.

So after the company settled on Hudson Yards, the vast mini-city taking shape on Manhattan’s Far West Side, existing tenants were told to move and a small army of construction workers quickly began to revamp the building even before a lease had been signed.

Facebook’s push to accommodate its booming operations is part of a rush by the West Coast technology giants to expand in New York City. The rapid growth is turning a broad swath of Manhattan into one of the world’s most vibrant tech corridors.

Four companies — Amazon, Apple, Facebook and Google — already have big offices along the Hudson River, from Midtown to Lower Manhattan, or have been hunting for new ones in recent months, often competing with one another for the same space.

In all, the companies are expected to have roughly 20,000 workers in New York by 2022.

Cities across the United States and around the world have long vied to establish themselves as worthy rivals to Silicon Valley. New York City is certainly not anywhere close to overtaking the Bay Area as the nation’s tech leader, but it is increasingly competing for tech companies and talent.

New York’s rise as a tech hub comes as industries that have long dominated the city’s economic landscape are transformed by technology, and are themselves increasingly reliant on software engineers and other highly skilled workers.

The growth in New York is occurring largely without major economic incentives from the city and state governments. Officials are mindful of the outcry last year over at least $3 billion in public subsidies that Amazon was offered to build a corporate campus in Queens.

The retail behemoth, stung by the backlash, canceled its plans abruptly in February. It is continuing to add jobs in the city, although at a slower pace.

Still, Amazon’s announcement last month that it would lease space in Midtown for 1,500 workers renewed a debate over whether incentives should be used to woo huge tech companies to New York.

Opponents of the earlier deal, including Representative Alexandria Ocasio-Cortez, Democrat of Queens, said Amazon’s decision to expand in Manhattan showed that New York was so attractive that tax breaks were unnecessary.

Others responded that the Hudson Yards space the company was leasing paled next to the campus proposed for Long Island City, Queens, and to the 25,000 people Amazon had pledged to employ there.

Tech companies are choosing New York to tap into its deep and skilled talent pool and to attract employees who prefer the city’s diverse economy over technology-dominated hubs on the West Coast. New York is also closer to Europe, an important market.

“For a long time, if you lived in the broader tech sector, there was inertia that brought you to Silicon Valley,” said Julie Samuels, executive director of Tech: NYC, a nonprofit industry group. “So many people wanted to live here and move here, but felt the jobs weren’t here. Now the jobs are here.”

Google has grown so quickly and is so squeezed for space that it is temporarily leasing two buildings until a much larger development in Manhattan near the Holland Tunnel, St. John’s Terminal, is ready in 2022.

The big tech firms started in New York with small outposts. Google’s first New York employee, a sales worker, arrived in 2000, and worked out of a Starbucks in Manhattan. It was the company’s first office outside California.

Tech industry offices were once mostly filled with sales and marketing employees who needed to be closer to their customers and to industries like fashion, finance, media and real estate that power the city’s economy.

Over the past five years, though, the makeup of the companies’ combined New York work force has come to resemble the West Coast version: a mix of engineers and others involved in software development.

“It should go without saying,’’ she added, “that middle-income, low-wage, poor and unemployed residents in these cities cannot access the luxury housing market nor the rising rents and have been driven out of their communities as a result.”

Jonathan Miller, president of Miller Samuel, a real estate appraisal firm, said that the residential market in Manhattan had been strong in areas where the tech firms had grown.

“I speak to brokerage groups twice a week, and the conversation is always peppered with questions about the tech sector,” Mr. Miller said. “If you have 20,000 employees coming in who are high-wage earners, that can have a pronounced impact.”

The major tech firms are expected to grow to the point that they are among the largest private tenants in New York in the coming years, rivaling longtime leaders like JPMorgan Chase.

Among companies in the technology, advertising, media and information industries, Google and Facebook are now the largest tenants, beating out legacy companies like Condé Nast, News Corp. and Warner Media, according to an analysis performed for The Times by the real estate company Cushman & Wakefield.

Facebook employs 2,900 people in New York, and recently signed the lease at Hudson Yards for 1.5 million square feet in three buildings. In addition to providing space for 6,000 workers, the deal gives the company an option to take over another several hundred thousand square feet in the development.

“It’s hard to predict future growth, but we believe New York is a vibrant market with a tremendous pool of talent,” a Facebook spokeswoman, Jamila Reeves, said. She declined to comment on the company’s specific plans.

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