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


When Facebook was trying to find one other New York workplace, one large enough to suit as many as 6,000 employees, greater than double the quantity it presently employs in the metropolis, it had one main demand: It wanted the area urgently.

So after the firm settled on Hudson Yards, the huge mini-city taking form on Manhattan’s Far West Side, current tenants had been instructed to maneuver and a small military of building employees rapidly started to revamp the constructing even earlier than a lease had been signed.

Facebook’s push to accommodate its booming operations is an element of a rush by the West Coast expertise giants to develop in New York City. The speedy development is popping a broad swath of Manhattan into one of the world’s most vibrant tech corridors.

Four firms — Amazon, Apple, Facebook and Google — have already got massive places of work alongside the Hudson River, from Midtown to Lower Manhattan, or have been trying to find new ones in latest months, usually competing with each other for the similar area.

In all, the firms are anticipated to have roughly 20,000 employees in New York by 2022.

Cities throughout the United States and round the world have lengthy vied to determine themselves as worthy rivals to Silicon Valley. New York City is definitely not anyplace near overtaking the Bay Area as the nation’s tech chief, however it’s more and more competing for tech firms and expertise.

New York’s rise as a tech hub comes as industries which have lengthy dominated the metropolis’s financial panorama are reworked by expertise, and are themselves more and more reliant on software program engineers and different extremely expert employees.

The development in New York is happening largely with out main financial incentives from the metropolis and state governments. Officials are aware of the outcry final yr over not less than $three billion in public subsidies that Amazon was provided to construct a company 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.



Source link Nytimes.com

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