TWO MONTHS AFTER THE MOST VALUABLE PUBLIC COMPANY IN THE WORLD ANNOUNCED ITS LONG ISLAND CITY HEADQUARTERS BUILD, RIPPLES IN LOCAL REAL ESTATE VALUES ARE BECOMING CLEARER, AS ARE EXPANDED PROMISES TO THE CITY
BY MATT SCANLON
By the time this issue goes to press, it will have been two and a half months since Amazon announced that it would open a second headquarters, in Long Island City. Following a 14 month search and after extensive negotiations between Amazon and New York City and state representatives, a deal was struck in which nearly $3 billion in tax and other incentives was extended to the multinational e-commerce, artificial intelligence, and cloud computing company, whose principal base is Seattle.
Amazon corporate boosters and Mayor de Blasio’s office point to the 25,000 promised jobs (over the course of ten years) in software engineering, program management, operations, support, sales, and marketing and amplifier effect boosts to other local businesses as reasons for unbridled deal enthusiasm, while critics point to unaccounted for stress to city infrastructure and further housing marginalization among low in come and middle class New Yorkers.
Nobody, however, is arguing that the multi acre campus won’t produce seismic changes. Days after the deal announcement, real estate site 6sqft.com reported that searches for residential apartments in Long Island City jumped 281 percent compared to daily averages. Streeteasy.com, meanwhile, reported a spike in neighborhood home prices (city prices on the whole were flat in 2018; those in Long Island City were in a modest decline).
The most immediate winner was One Court Square (aka the Citigroup Building) and its owner, the private equity and asset management firm Savanna. Citigroup announced late last year that it was vacating one million square feet, but Amazon will be absorbing most if not all of that space for the first phase of its move to New York a city company presence that will ultimately constitute between four million and eight million square feet.
In a January letter, and seemingly in response to political and resident advocacy groups questioning why as much as $100,000 of incentives per promised job needed to be unpocketed, Amazon offered further details of deal components, including a new public school for 600 students, technology focused career training for local residents, and the somewhat opaque hope that boosted future state and local tax revenue “can be used to help the neighborhood, improve subways and buses, and build more affordable housing.”
Though some aspects of the plan have yet to undergo public and environmental review, Amazon employees are expected to begin occupying One Court Square offices by early fall.
UPDATE: Shortly after the February issue went to press, Amazon announced that it is cancelling its plan for a Long Island City campus.