After Amazon announced its plans for a second headquarters, Related Companies approached the online retail giant with a simple pitch: “Wherever you go, we want to be your developer,” the company’s CEO Jeff Blau recalled at NYU Schack Institute’s annual conference on capital markets in real estate Thursday.
Blau doubts that place will be New York City. He cited Washington, D.C., Boston and Chicago as his favorites to land Amazon. Related’s chair Stephen Ross, speaking on an earlier panel, was equally pessimistic. “I don’t think New York has a chance,” he said. “Other cities, it’s important to them and they’re offering incentives like you wouldn’t believe.”
MaryAnne Gilmartin, CEO of Forest City New York, agreed, citing New York’s high cost of living and office development.
“I think it’s very difficult to imagine based on the cost structure,” she said.
Bill Rudin, head of Rudin Management, was more optimistic, pointing to firms like insurer Aetna that decided to move here despite the costs.
“They could have gone to a lower-cost location but they weighed that versus the talent and the people and the community,” he said. The firm is leasing the entire office portion of Aurora Capital Associates and Vornado Realty Trust’s 61 Ninth Avenue in the Meatpacking District.
Several cities have gone out of their way to offer incentives to Amazon. New York’s mayor Bill de Blasio arranged for the Empire State Building to glow in orange light in a nod to the company’s colors. A small Georgia town even went as far as offering to change its name to Amazon.
RXR Realty’s Scott Rechler said that Amazon’s checklist of things it is looking for in a city, including affordable housing and access to functioning transit, should also be seen as a checklist for New York as it tries to stay competitive. “It’s a war for talent,” he said. “That’s what drives the 21st century economy.”