How New York Big Tech Makes a Rival in Silicon Valley

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When Facebook was looking for another New York office that could accommodate up to 6,000 people, more than twice the number currently in the city, there was great demand: space was urgently needed.

After the company settled in Hudson Yards, the huge mini-city that formed in Manhattan's Far West Side, existing tenants were told to move and a small army of construction workers quickly began renovating the building even before one Lease contract had been signed.

Facebook's urge to do justice to its booming operations is part of a rush of West Coast technology giants to expand in New York City. The rapid growth is transforming much of Manhattan into one of the most dynamic tech corridors in the world.

Four companies – Amazon, Apple, Facebook and Google – already have large offices along the Hudson River, from Midtown to Lower Manhattan, or have been looking for new ones in recent months that often compete for the same space.

In total, the companies are expected to employ around 20,000 people in New York by 2022.

Cities in the United States and around the world have long tried to establish themselves as worthy rivals for Silicon Valley. New York City is certainly not close to overtaking the Bay Area as the country's technology leader, but it is increasingly competing for technology companies and talent.

New York's rise as a technology center is due to the fact that industries that have long dominated the city's economic landscape are being changed by technology and are increasingly dependent on software engineers and other highly skilled workers.

The growth in New York is largely without major economic incentives from the city and state governments. Officials are aware of the outrage Amazon offered last year to build a corporate campus in Queens for at least $ 3 billion in public grants.

The retail giant that got stung by the backlash abruptly canceled his plans in February. Jobs will continue to be created in the city, albeit more slowly.

However, Amazon's announcement last month that it would lease 1,500 employees in Midtown sparked a debate about whether incentives should be used to lure large technology companies to New York.

Opponents of the previous deal, including MP Alexandria Ocasio-Cortez, a Democrat from Queens, said Amazon's decision to expand in Manhattan showed that New York City was so attractive that tax breaks were unnecessary.

Others replied that the Hudson Yards room that the company rented had faded away from the campus that was for Long Island City, Queens, and the 25,000 people Amazon had agreed to employ.

Tech companies choose New York to leverage the extensive and skilled pool of talent and to recruit people who prefer the city's diverse economy to technology-dominated west coast hubs. New York is also closer to Europe, an important market.

"For a long time, when you lived in the broader technology sector, it was an indolence that took you to Silicon Valley," said Julie Samuels, general manager of Tech: NYC, a nonprofit industry group. "So many people wanted to live and move here, but the jobs weren't here. Now the jobs are there."

Google has grown so quickly and has become so small in space that it temporarily rents two buildings until a much larger building in Manhattan near the Holland Tunnel, the St. John's Terminal, is completed by 2022.

The big technology companies started out in New York with small outposts. Google's first employee in New York, a sales representative, came in 2000 and worked at a Starbucks in Manhattan. It was the company's first office outside of California.

The technology industry's offices used to be primarily staffed with sales and marketing people who needed to be closer to their customers and to industries like fashion, finance, media and real estate that were driving the city's economy.

Over the past five years, however, the composition of the New York-based workforce has evolved into a 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 people in these cities have neither access to the luxury property market nor to rising rents, and as a result have been driven out of their communities." , "

Jonathan Miller, president of Miller Samuel, a property valuation company, said the Manhattan housing market was strong in areas where technology companies had grown.

"I speak to brokerage groups twice a week and the conversation is always peppered with questions about the technology area," said Miller. "Adding 20,000 high-earners can have a significant impact."

Large technology companies are expected to be among the largest private tenants in New York in the coming years and to compete with long-time leaders such as JPMorgan Chase.

Google, Facebook and Facebook are the largest tenants among companies in the technology, advertising, media and information industries and, according to The Times real estate company, beat older companies such as Condé Nast, News Corp. and Warner Media Cushman & Wakefield.

Facebook has 2,900 employees in New York and recently signed the 1.5 million square meter lease in three buildings at Hudson Yards. In addition to providing space for 6,000 employees, the deal also gives the company the opportunity to develop a further several hundred thousand square meters.

"It is difficult to predict future growth, but we believe New York is a vibrant market with a huge pool of talent," said a Facebook spokeswoman, Jamila Reeves. She declined to comment on the company's specific plans.