When COVID-19 grabbed New York City by the throat last spring, America’s toughest metropolis did as it has when challenged before. It stood up and fought.
Even as some New Yorkers fled to higher ground, thus birthing the discredited narrative of a mass exodus, the city mobilized as perhaps only New York can. Garment makers shifted gears to churn out personal protective equipment. Local innovators, backed by public grants, rallied to rig new supply chains and manufacture low-cost ventilators. Against their communal nature, citizens embraced social distancing.
Not even the brashest among them would boast now that the battle is won, nor minimize the coronavirus deaths of some 24,000 fellow New Yorkers. But in a turnaround inconceivable during the outbreak’s peak in April, New York City is one of the safest places in the country, with a COVID positivity rate comparable to that of Maine, lowest among the states as of late October. The city can see the other side.
“It feels optimistic now,” says Julie Samuels, formerly of San Francisco, now a tech industry lobbyist in New York. “I was here for September 11, and that made me a permanent New Yorker. I feel the same way about this moment.”
Perhaps sooner than expected, there are distinct indications of a rebound, one fostered by the city’s legendary resilience, its knack for innovation and a concerted drive to cement itself as a global technology hub, an effort that sprang from the remnants of the 2008 financial crisis.
A powerful sign of renewal came in early August. That’s when Facebook signaled that it’s gearing up for a march on Manhattan. The social media giant’s 730,000- sq.-ft. (68,000-sq.-m.) lease on the century-old Farley Building in Midtown could afford it the space to triple its New York workforce, which presently stands at about 4,000.
“The reason behind our expansion into the Farley office is to create more of a tech and engineering hub,” says Kia Floyd, Facebook’s head of public policy. “Beyond that,” Floyd tells Site Selection, “we as a company understand that our presence and growth in New York allows us to have a global reach that cannot be achieved elsewhere. And New York gives us a competitive edge in recruiting that’s unlike any other market. New York will come back, and we’ll be here to ride that wave.”
What’s even more telling is that Facebook is not alone among the four technology titans collectively known as “Big Tech.” Amazon, Google and Apple, even amidst the pandemic, are beefing up forces in New York. Amazon says its $1 billion purchase, in March, of the Lord & Taylor building in Midtown, will allow it to increase by half its New York tech staff of 4,000. Apple, which rented 200,000 sq. ft. (18,580 sq. m.) of office space near Penn Station this year, already is poised to expand upon that, and Google continues to grow its campus along the Hudson River.
“When we see that Amazon, Google and Apple also are doubling down, that reinforces for us that we’re doing the right thing,” says Facebook’s Floyd. “We’re the whales that others feed off of, and we think that by being here we’re helping to drive the city’s tech ecosystem.”
Transforming in a New York Minute
New York’s technology sector, says Julie Samuels, “is rapidly growing and rapidly maturing.” She’s witnessed the acceleration since founding Tech:NYC, an advocacy group that now represents some 800 member companies, five years ago.
“When we launched the organization, there was a real question as to which region would become the number two tech hub to Silicon Valley. There’s no argument anymore. I would even argue that New York, in time, will be the premier tech hub in the country, if it’s not already.”
And, she believes, technology is spreading its wings throughout New York’s commercial ecosystem.
“New York will come back, and we’ll be here to ride that wave.”
“The next generation of big technology successes are probably not going to be pure technology plays. They’re going to be real estate tech companies, healthcare tech companies, financial tech companies and the like. Where else would you want to do that but New York City, where you have access to the best minds, capital, plus huge potential for building partnerships?”
It’s a movement the city is eager to back, and there’s no better example of that than LifeSci NYC, a $500 million commitment launched in 2016 by Mayor Bill de Blasio to establish New York City as a global leader in the life sciences. With nine major research centers, over 50 hospitals and the presence of pharmaceutical giants such as Eli Lilly, Bristol Myers Squibb and Pfizer, New York already is a healthcare leader.
As part of LifeSci NYC, the New York City Economic Development Corporation (NYEDC) is partnering with Deerfield Management Company, a New York-based healthcare investment firm, to redevelop a 12-story building in Manhattan’s Flatiron District into a life sciences hub named “Cure.” The campus, to open early next year, will provide office space, lab space and programming to support healthcare and biotech start-ups.
“The untapped innovation that is happening here is astronomical, and there is a vast amount of opportunity,” says Karen Heidelberger, Deerfield’s chief partnership and communications officer. “There’s management talent to support the science coming out of academic institutions. You have the supportive technologies, real estate and finance. If you’re in healthcare tech and are looking for the place to be for the next 10 to 20 years, I would come to New York.”
Room to Grow
It’s easy to forget that Manhattan isn’t the only New York, but the city’s four other boroughs are outpacing the island in economic growth. Brooklyn, home to an expanding array of tech and creative companies and advanced manufacturers, would be the fourth-largest city in the U.S. were it a city unto itself. In Queens, a borough just behind Brooklyn in population, the Long Island City section is the nation’s fastest growing commercial and residential neighborhood.
Brooklyn, Queens, the Bronx and Staten Island all offer more land at lower costs than Manhattan. They also enjoy the steadfast support of the City, which, as just one example, is pumping $180 million into the infrastructure of Long Island City. More broadly, a series of incentives programs are geared to promote their growth.
A package of City and state incentives totaling $8.3 million recently helped to lure Curve, a London-based financial tech startup, to Brooklyn. The company chose New York after an exhaustive search that included Boston, Austin, Seattle, San Francisco, Los Angeles and Atlanta. The incentives agreement requires that Curve create at least 185 jobs over the next four years.
“I really credit NYCEDC and Empire State Development,” says Curve Vice President Amanda Orson, “for finding a way to make New York accessible and affordable for a startup such as ours that needed to hire aggressively. We fell in love with the diversity of Brooklyn, and Brooklyn has all the benefits of being in Manhattan and at a much lower cost.”
Opportunities abound for industrial development. Witness Amazon’s opening of a massive, $100 million fulfillment center on Staten Island’s West Shore, followed up by an adjacent last-mile facility.
“I’d really encourage folks, especially in the site selection community, to take a hard look at the boroughs outside of Manhattan,” says Dan Clark, NYCEDC’s director of business development. “Our as-of-right zoning is ripe for lots of different kinds of projects. Take a look at the West Shore of Staten Island and the South Bronx. You’ll be surprised at what you can build in New York.”
This Investment Profile was prepared under the auspices of the New York City Economic Development Corporation (NYCEDC). To connect on business opportunities in NYC, contact Dan Clark at (332) 999-5438 or dclark@edc.nyc.
