New York is in prime position to receive Amazon’s biggest delivery to date: 50,000 high-paying jobs and $5 billion in investment.
The Big Apple is one of 20 finalists still in the running for the e-commerce giant’s second headquarters after the field of applicants was narrowed from 238 last week, a move that left many in the city’s real estate industry feeling hopeful if not brazenly optimistic.
“If you want to be somewhere you want to be in New York, so why wouldn’t Amazon want to do that?” REBNY President John Banks said during the group’s annual banquet dinner last week. “What else could anybody want? You have culture, you have restaurants, you have theater, you have industry, you have business and you have the great people of New York.”
Some are approaching the table a little more cautiously before placing their bets, viewing the region’s high cost of living and doing business as significant hurdles in a race focused so intently on dollars and cents.
“We’re one of 20, right?” Robert Lapidus, co-founder of L&L MAG, said. “Our odds are five percent.”
In September, Amazon announced it would soon outgrow its flagship headquarters in Seattle. Rather than quietly exploring its options for expansion, the company took its search public, asking interested cities to submit bids detailing their population sizes, infrastructure, amenities and, perhaps most importantly, what types of tax breaks the company could expect to take advantage of.
Most finalist cities were located on the East Coast or in the South with a smattering throughout the Midwest. New York’s chief rivals on the Atlantic Seaboard—Boston, Philadelphia and Miami—made the cut as did three locations near the nation’s capital: Washington, D.C. proper, Montgomery County, Maryland and Northern Virginia. Newark also caucuses with the I-95 corridor crowd.
Millennial hubs such as Austin, Denver, Pittsburgh and Raleigh, N.C. were in the top 20 and so were thriving Sunbelt cities such as Atlanta, Dallas and Nashville. Chicago, Columbus, Ohio and Indianapolis represent the heartland and Los Angeles is the lone West Coast contender as Amazon looks to break away from the tech-saturation of Silicon Valley. Toronto is the only finalist outside the U.S.
While some states have trumpeted their tax offerings, New York has opted to keep its cards close to its vest, hoping to avoid being dragged into a public bidding war and any accompanying scrutiny that might come in tow.
Empire State Development, or ESD, the state’s economic investment arm, promised tax credits in exchange for job creation as well as assistance with office space construction, workforce development, educational programming and research collaborations, without getting into specific dollar amounts.
“With an unrivaled diverse workforce, unprecedented investments in world-class infrastructure and a vibrant 21st-century economy, we are proud that New York is a finalist for Amazon HQ2,” ESD President, CEO and Commissioner Howard Zemsky said in a statement. “Under the leadership of Governor Cuomo, New York continues to attract top companies from all over the world to grow their business and create the jobs of tomorrow, and we look forward to building on this incredible momentum.”
Across the Hudson River, New Jersey was less bashful when loaded up its Amazon shopping cart. It offered the company $5 billion in tax incentives and Newark pitched in an extra $2 billion in rebates.
Of all the finalists, Newark has suffered the greatest economic hardship during the past 50 years, leading some to believe it city was selected for its feel-good potential, but Bruce Mosler, chairman of Cushman & Wakefield’s global brokerage, said Brick City should not be overlooked.
“At the end of the day, there are benefits to perhaps being the only game in town for an organization like Amazon and they’ll weigh that against coming to New York and the benefits you get here,” Mosler said. “New Jersey is taking a hard run and it’s a credible run.”
New Jersey offers many of New York’s most enticing amenities—a large workforce, top-notch universities, access to international air and sea ports, public transportation and close proximity to a thriving cultural center—at much lower costs. The city was also recently wired with fiber optic cables to support high-speed internet throughout its downtown offices, parks and streets.
However, as Amazon’s vetting continues, Bill Rudin, CEO of Rudin Management and the newly-installed chairman of REBNY, said it’s important that New York plays its own game rather than try to compete directly with other cities.
“New York should be New York,” he said. “Newark’s going to be what they’re going to be, other cities are going to be what they’re going to be so we have to stand on our history and all the things we have to offer. Game on.”
Banks, Rudin’s REBNY cohort, is not quite as concerned about the Garden State.
“I am not worried about New Jersey in anything I do,” he said.
Moving forward, Amazon will work with the finalist cities to drill down specifics. For New York, that could mean trimming its four proposed locations down to one.
In the initial proposal, the city offered up Hudson Yards, the Financial District, Long Island City and Brooklyn’s Tech Triangle, which includes DUMBO, Downtown and the Navy Yard.
Robert Knakal, chairman of New York Investment Sales at Cushman & Wakefield, said Brooklyn and Long Island City are the more sensible offerings.
“New York has such great transportation, it’s easy to get anywhere in the city quickly and, based on the scale they’re interested in, I think it would be tough for them to find that scale in Manhattan,” Knakal said. “So, Queens or Brooklyn probably makes the most sense.”
While it’s unclear what factors will ultimately tip the scales for Amazon, Mosler said New York has what it takes to fill their order.
“You can never discount New York for three reasons,” he said. “It’s the financial capital of the world, it’s become de facto, outside of Silicon Valley, the tech capital of the world, it is also one of the most robust labor markets in the world and, education-wise, we have the best universities to support that employment growth, so you can’t discount New York.”