W

hen locals received word that the U.S. Armed Forces would close the old Stewart Air Force Base in Hudson Valley, N.Y., many thought the closure would spell ruin for the area economy.
   Two entrepreneurial brothers thought otherwise, and now they are sitting on a potential gold mine.
   Kevin and Chris Bette took over development for the land around what is now Stewart International Airport on the advice of a former Harvard classmate. The old school chum now runs development at the cargo hub in Texas known as Fort Worth Alliance Airport, the fastest growing industrial complex in the U.S.
   "When we heard that the air base was being closed, a lot of the locals thought it was terrible for the economy," says Kevin Bette, president of First Columbia, a major development company in Latham, N.Y. "But we knew the potential of air- side development. We had an inkling of what the future could hold for that site. We felt that was the place to invest our future."
   Bette notes that while "nothing is easy" when it comes to real estate development and "it has taken a little while" to see a payoff, his company is now closer than ever to realizing its dream of developing Metropolitan New York's first airport city.
   Bette credits Conway Data and Site Selection founder and chairman Mac Conway, author of the book The Airport City in the 1970s and the updated Airport Cities 21 in 1993, with providing "much of the inspiration for the master plan for this development."
   That development, now known as New York International Plaza,

Kevin Bette

will have 2.5 million sq. ft. (232,250 sq. m.) of mixed- use space upon build- out and could become home to dozens of corporate employers, says Bette. "The future sets up quite well."
   About 55 miles (89 km.) north of New York City, New York International Plaza (NYIP) covers 260 acres (105 hectares) in the town of New Windsor. The park, which includes a New York Empire Zone and a federal Foreign Trade Zone, is located at the intersection of the New York State Thruway and Interstate 84. The site is close to the Metro North Hudson River Line and the New Jersey Transit Port Jervis line, two commuter lines serving Hudson Valley.
   First Columbia has developed 400,000 sq. ft. (37,160 sq. m.) of office, industrial, retail and other space in the Orange County complex. Companies doing business there include ENAP Inc., a building materials firm that moved its headquarters to NYIP last year; Cincinnati- based LSI/Lightron, which built its Northeast U.S. headquarters on site; Westchester Cardiology; State Farm Insurance; Hudson Valley Imaging; OxyVita; American Petroleum; Empire State Development; and the Hudson Valley Economic Development Corp.
   With office rents about 50 percent lower than the average found in New York City, NYIP is an affordable option for growing companies seeking a Northeast presence, says Bette.
   "People want ease of transportation, security and low cost. We as developers have to fill a need in the marketplace," he says. "We want knowledge- based jobs that capitalize on the educational resources in the region. This is a perfect location for a business wanting to serve the Northeast U.S. market because it sits right in the middle of the Boston- to- Washington, D.C., corridor."
   One roadblock to more companies selecting NYIP has been the lack of direct access to I- 84, but Bette said that is changing with a new interchange set to open in 2007.
   "We've been talking to a number of prospective tenants. They have delayed their decisions, pending the road access," he said. "We've talked to a number of major financial institutions. We hope to land these firms next year. Our challenge has been to get all of the road improvements finished. Without access, we could be in Bismarck, North Dakota."
   Anthony Campagiorni, president and CEO of the Hudson Valley Economic Development Corp., says the nine- county, 2.3- million- resident region leads New York in job and population growth and includes four of the wealthiest counties in the state.
   "Bayer moved their diabetes division here from suburban Chicago," Campagiorni says. "This was the first project in the region that used our new Empire Zone designation as a regionally significant economic development project. This is a new category of incentives for New York. It is for a high- tech company that creates at least 20 jobs and $10 million in new capital investment – and Bayer qualified by moving its division from Indiana to Hudson Valley. They decided to locate in Tarrytown in Westchester County."
   The Bayer relocation, which was first announced in late 2005, has since been completed. Bayer's Diabetes Care Division is one of the largest blood glucose monitoring businesses in the world. The move added 100 jobs to the Hudson Valley region.
   In other big news, Hunter Douglas will break ground early this year on a $10- million, 75,000- sq.- ft. (6,967- sq.- m.) office building on 23 acres (9.3 hectares) in Pearl River as it moves from Upper Saddle River, N.J. Credited with the invention of the Venetian blind, the company is transferring 115 workers from its existing headquarters in Bergen County, N.J., to the new plant less than 20 minutes from Manhattan.
   AllianceBernstein L.P. closed its own New Jersey facility and took 211,000 sq. ft. (19,602 sq. m.) in White Plains, N.Y., says Campagiorni. "This was very significant for us," he adds. "Meanwhile, IBM continues to make major investments in our area in semiconductor manufacturing, while AMD announced a $500- million chip plant in Saratoga County just outside our region. These are the only two chip- makers in the state."
   Campagiorni adds that Stewart Airport's growth will only enhance the region's attractiveness to corporate employers. "Stewart is getting both JetBlue and Airtran, we are building a new interchange there and the Port Authority of New York may take over the airport. That's further good news for the region," he says. "Stewart is becoming a significant regional airport, as the other New York airports have a problem with congestion.
   "We move a lot of freight here," he adds. "A lot of air cargo operations are based at Stewart, as well as corporate flights. GE and American Express have corporate hangars here. Plus, there is a lot of room to expand."
   Campagiorni says the region is growing in four primary industry clusters: semiconductor manufacturing and other microelectronics; life sciences; software development and information technology, including telecommunications; and financial and insurance firms.
   Major employers in the region include Morgan Stanley, New York Life, Bank of America, MasterCard, IBM, PepsiCo, Fuji, Heineken, Starwood Hotels, Westin Hotels, Nine West, Snapple, Wyeth and Novartis.
   Campagiorni says a big attraction is the much lower cost of real estate. While office rents in Midtown New York are about $70 per square foot right now, rents are just $30 in Westchester County and only $18 in Putnam County, both of which are only minutes from New York City.

Google Search Lands in Chelsea Internet giant leads real estate resurgence in the Big Apple.

I t may not have been your conventional site selection process, but then again there's very little that's conventional about Google.    When word leaked in September that the search engine giant based in Mountain View, Calif., would acquire 300,000 sq. ft. (27,870 sq. m.) of prime real estate in the Chelsea neighborhood of New York City, the news only confirmed what many real estate executives in the city already knew: The city is back. The New York City commercial real estate market has recovered from the tragic events of Sept. 11, 2001 – and Google's deal may be the capstone.    While Google executives aren't saying much about the large real estate transaction, a corporate spokeswoman confirmed the deal in a November interview with Site Selection.    "Google uses a very democratic system when it comes to corporate site selection," says Sunny Gettinger, corporate communications manager for Google in California. "All employees had access to an internal Web page where they were asked to put in their addresses. The site selection committee had people at all levels at Google – engineers, executives and other employees."    The end result was the selection of 111 Eighth Avenue, one of the largest buildings in New York City. Designed by Lusby Simpson and finished in 1932 to house the Port Authority of New York, the 15- story structure is considered an architectural landmark. The red- brick, art deco building occupies an entire city block. With asking rents at $33 per square foot, Google could pay $10 million or more per year in rent.    Google's plans for the facility haven't been made public, but reports suggest that the search engine giant will open a new office, data center and networking center. Exactly how many employees Google will station there isn't known.    Still, city leaders are ecstatic. "It is a real win- win for the city and Google," says Laure Aubuchon, senior vice president of business development for the New York City Economic Development Corp. "Chelsea has come to be known as a very trendy location for restaurants and companies, and this will be Google's biggest location outside of California."    Yonit Golub, a spokesperson for NYCEDC, says, "We are thrilled that they are here. They have already hired about 500 local workers [at 1440 Broadway in Times Square]. It is great to see that commitment. Their space is directly over a major telecom hub, where they will have even greater access to broadband connectivity."    Aubuchon says she had heard that Google will perform design work and sales at its Chelsea address. "They are so on the march. They have so many things going," she says. "It speaks to the strengths of New York, including our work force. Google would argue that their prime hiring pool is young talent, and that is exactly what we have in the city."    Long known for attracting trendy restaurants, art galleries and publishing companies, Chelsea is suddenly a hot market for high- tech firms like Interactive Arts, Level 3 Communications and XO Communications.    A report released recently by Jones Lang LaSalle suggests that what's happening in Chelsea may be indicative of trends occurring throughout the city. "A wide variety of data underscores the fact that Downtown New York has achieved a level of performance few expected even nine months ago," the report states. "In fact, there are so many businesses looking for space in Lower Manhattan that the submarket may soon see its overall availability rate fall below 10 percent for the first time since the second quarter of 2001."    Peter Riguardi, president of Jones Lang LaSalle's New York office, said, "Lower Manhattan has surpassed nearly everyone's expectations in just how quickly and thoroughly the submarket has regained its vitaility. Viewed from any angle – rental rates, availability rates, leasing activity, and residential and retail growth – downtown remains a vital central business district."    There is also evidence that this growing demand for space is spilling over into Nassau and Suffolk counties on Long Island.    At Stony Brook University on Long Island, nearly $125 million is being spent on new research and development facilities. This includes $50 million for the NYS Center of Excellence in Wireless and Information Technology; $35 million for an Advanced Energy Research and Technology Center; $22 million for a Center for Computational Neuroscience; and $15 million for the STAR Center in Biomolecular Diagnostics and Therapeutics.    "This will represent the growth of our institution for the next 20 years," said Dr. Ann- Marie Scheidt, the university's director of economic development. "Our emphasis is on technology- based business. We work with startups. We are trying to replace Long Island's image as a kind of bedroom community for New York City, and we appear to be succeeding. About 80 percent of the people who live in Nassau and Suffolk counties now work on Long Island."    Maybe one day Google will join them. – Ron Starner