New Google campus accelerates tech's march into New York

[NEW YORK] As West Coast companies storm into New York, they are reshaping the city's neighbourhoods and changing its identity from a hub of finance, fashion and media to one increasingly centered on technology.

Google said Monday that it planned to create a US$1 billion campus just south of the West Village. The Internet company's push into one of Manhattan's most famous neighbourhoods positions it to become one of New York's biggest occupants of office space, allowing it to double its workforce in the city to more than 14,000 over the next decade.

Google follows Amazon, which said last month that it planned to open a new office in Queens that will house as many as 25,000 employees. Apple, Facebook, LinkedIn and Uber have also embarked on recent New York expansions - much of it driven by a hunt for talent. Each is creating hundreds or thousands of high-paying jobs and leasing or building millions of square feet in commercial real estate.

"Law, medicine and finance have been superseded by information technologies," said Mitchell Moss, an urban-planning professor at New York University who studies the city's economy.

Google's new campus selection of Hudson Square, once an industrial district just south of the West Village, strengthens its grip on Manhattan's West Side, likely accelerating the neighbourhood's changes. That would mirror how Google transformed Manhattan's Chelsea neighborhood, where it has had an office since 2006. The company bought Chelsea Market for $2.4 billion earlier this year and an adjacent building in 2010, and it leases other space in the area, about a 20-minute walk from its new offices.

The centrepiece of the new 1.7-million-square-foot campus will be the St John's Terminal building near the Holland Tunnel on Washington Street, with Google also set to occupy space at two buildings nearby on Hudson Street. Altogether, the company will expand its footprint in Manhattan by a third to about 6.75 million square feet.

"New York City continues to be a great source of diverse, world-class talent," Ruth Porat, Google's chief financial officer, said in a statement Monday. "That's what brought Google to the city in 2000, and that's what keeps us here."

New York's transformation into a tech centre began after the 2008 financial crisis, when Mayor Michael Bloomberg focused on the industry as an engine of future growth. His administration sought to upgrade the tech skills of the local labour force, a campaign that led Cornell University and its partner, Technion-Israel Institute of Technology, to open an applied science and engineering campus on Roosevelt Island. Tech initiatives - new courses, buildings and research institutes - are also underway at Columbia University, New York University and the City University of New York.

Google arrived in New York when it opened an advertising sales office in 2000. It added an engineering team in the city in 2003 and has steadily expanded since.

Other big tech companies quickly followed. Amazon and Facebook each now have more than 2,000 employees in New York, while Apple and Salesforce each employ more than 1,000. LinkedIn has a large office in the Empire State Building, and IBM chose New York as the base for its Watson artificial intelligence and cloud computing divisions.

Since 2009, jobs in tech and advertising in New York have increased 31 per cent to 360,600, while financial-services jobs in the city increased about 12 per cent to 475,500, according to an analysis of federal data by Ken McCarthy, principal economist at the real estate firm Cushman & Wakefield. By contrast, the education and health sectors employ about one million people in New York, while the hospitality industry employs 465,800, according to his analysis.

McCarthy said federal data categorised jobs based on the employer, meaning any bank employee is counted as finance. But New York's traditional industries - banking, retailing and consulting - have also added thousands of tech jobs. JPMorgan Chase, Goldman Sachs and Citigroup each employ thousands of tech workers, including many in new fields like data science, blockchain and machine learning.

And New York's tech sector is accelerating. Over the past year, the share of New York postings on the job site Indeed increased nearly 13 per cent for tech jobs and just 2 per cent for finance and accounting jobs. About 5 per cent of all New York jobs posted on Indeed are now tech related, the site said, compared with 3 per cent for finance and accounting.

That growth has made San Francisco, which is a gateway to Silicon Valley, a sort of sister city to New York. As a result, the air route between them is one of the nation's most competitive and heavily trafficked.

"There is more economic connectivity between New York and San Francisco than between New York and any of the declining upstate cities," Moss said.

Google's expansion in Manhattan contrasts with that of Amazon's in Long Island City, where a plan to enter the formerly industrial Queens neighborhood has been greeted with intense local debate. Amazon executives, who have promised little in the way of neighbourhood benefits in exchange for as much as US$3 billion in state and city incentives, faced protests and withering questioning at a New York City Council hearing last week.

Google has expanded quietly and has not asked for public subsidies. "We've been growing steadily for the past 18 years without heralding trumpets, or asking for support from the government," William Floyd, Google's head of external affairs in New York said this month. "We've done it by the dint of our own work."

Still, Google has faced criticism in New York. The owners of some Chelsea restaurants said they are losing potential customers because of the company's free-food-at-work policies. (San Francisco officials recently considered banning new employee cafeterias in the city for that reason.)

And some in Manhattan are wary that Google and other businesses will begin to spread into historic neighbourhoods.

"My concern is that with Google's concentration in that area, it's going to pull in even more intense pressure for office development, particularly tech office development, in adjacent neighbourhoods like the Village and East Village, where we are seeing it happen already," said Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation.

Mr Berman said he did not oppose Google's expansion in Hudson Square, which in the past decade has transformed into a commercial district, with many of its lofts and factories converted to offices for more than 1,000 companies, many in technology, advertising and media. Today, more than 50,000 people work in the neighbourhood, and thousands more have made their home there following a 2013 city rezoning that allowed residential development.

But Mr Berman said the growing demand for offices has led to the demolition of historic buildings, pushed out long-time businesses and residents, and resulted in modern office towers that are out of character with the rest of the neighbourhood.

Chelsea has also witnessed rapid development over the past decade as it has mostly shed its working class roots and identity as a hub of gay night life. It still maintains large public housing projects, but is dotted with art galleries, new condominiums and expensive restaurants.

Several factors prompted the area's gentrification, including the elevated High Line that opened in 2009. But some residents have complained that Google sped up the process, even as it followed a strategy of growing slowly.

In response, Google invested in local nonprofit organisations and said it would pay for a ferry stop at Pier 57, where it is renting office space, earning some plaudits from local elected officials.

"In terms of buying the new buildings, we want to make sure that they're not chasing anyone out," said Gale Brewer, the Manhattan borough president. "But they've been awfully good neighbours in Chelsea."

NYTIMES