By John Callegari and David Reich-Hale
Google will invest more than $1 billion to develop a new campus and hire thousands of people in New York City, the company announced Monday morning.
The Google expansion will ripple through the Long Island economy, tech and economic development, experts said.
Called Google Hudson Square, the planned 1.7 million-square-foot campus in lower Manhattan involves leased properties at 315 and 345 Hudson St. plus a property at 550 Washington St. for which the company said it has a signed letter of intent. Google plans to move into the two Hudson Street buildings by 2020 and the Washington Street location by 2022.
Google Hudson Square will be the main location for the company's New York-based Global Business Organization, which represents its sales and partnerships teams, the company said.
Google employs more than 7,000 people in the city now at offices in Chelsea and at Pier 57 after first coming to the city in 2000. Google said this year it would buy the Manhattan Chelsea Market building for $2.4 billion and planned to lease more space at Pier 57, both about a mile north of the new campus along the Hudson River.
"With these most recent investments in Google Chelsea and Google Hudson Square, we will have the capacity to more than double the number of Googlers in New York over the next 10 years," chief financial officer Ruth Porat wrote in a blog post.
The plan is the third in a string of major announcements by large tech companies looking to invest in New York City, building out a tech infrastructure to rival Silicon Valley. Long Island officials have said they hope the region's economy, real estate and job market will benefit from a spillover effect.
"Big picture, a win for New York City is a win for Long Island, because our economies are linked," said Kevin Law, president of the Long Island Association business group. "About 30 percent of Nassau County residents commute to New York City, primarily Manhattan, and they bring in 40 percent of disposable income for the county, which then supports real estate, downtowns and other businesses."
Long Island will reap more of the benefits if its mass transit system is improved and more multifamily housing is built near train stations, said Chris Jones, senior vice president and chief planner for the Regional Plan Association.
"The transit system, particularly the LIRR, has to perform and go to the places these jobs are located," Jones said. "The good news for Long Island is there are a lot of big investments in the LIRR, including East Side Access and the third track, which will expand capacity of the system."
Last month, Amazon announced plans to split its second headquarters between Long Island City, Queens, and Virginia. The Queens portion of that new headquarters would be home to 25,000 new workers, carrying an average annual salary of $150,000.
Amazon had a nationwide search for its second headquarters for more than a year, pushing municipalities to offer significant tax benefits to the online giant. New York City and the state together have offered Amazon about $2.8 billion in grants and tax breaks. Some elected officials have pushed back on that benefits package, arguing it's too friendly to the company and would displace middle-class New Yorkers.
Google "did not pursue any subsidies and thus none were provided" for the expansion project, according to Empire State Development, the state's primary business-aid agency.
The New York City Economic Development Corp. "doesn't have a role in the Google expansion," its spokeswoman Stephanie Báez said Monday. "If they received any incentives," she said, they would be of a type that is "administered by the NYC Department of Finance, not EDC."
Finance Department officials didn't immediately respond to a request for comment.
Civic groups representing areas near the Google project said they were concerned the campus would cause further crowding on the subways, and may further clog traffic in the nearby Holland Tunnel. But none expressed grave reservations or the inclination to organize against the offices, as has occurred in Long Island City, where Amazon's plan has stirred controversy.
"Google has been a good corporate neighbor in Chelsea, so I am optimistic this is a good plan," said New York City Council Speaker Corey Johnson, who represents Chelsea and parts of Hudson Square. "Comparing this Google deal to Amazon's deal really highlights the fact that our . . . tax breaks are overdue for a real in-depth review. New York City is potentially on the hook for over $2 billion with Amazon, and Google is adding thousands of workers without billions in subsidies."
A third tech giant, Apple, last week announced it would be expanding its presence in several cities across the country, including New York City, where it would add hundreds of new jobs.
Facebook has more than 2,000 employees in New York City. According to government statistics, tech sector employment in the city grew by 65 percent from 2010 to 2017 to reach an estimated 134,700. The Northeast is proving to be a good match for tech, with a strong base of higher education and a concentration of younger, educated workers from Boston to Manhattan.
"Eventually, as employees get older, they want to start a family, and their own company, so they end up in suburbs like Long Island," said Peter Goldsmith, chairman of LISTnet, which advocates on behalf of area tech companies. "They end up creating companies here."
Jones, at the Regional Plan Association, added, "You're going to see businesses pop up that are designed to serve these big tech companies. Some of those businesses will end up in the suburbs."
With AP, James T. Madore and Sarina Trangle