Newark Leaders Aren't Sweating Amazon Going Elsewhere With HQ2
Newark is receiving "dramatically" more interest and consideration from businesses since it was named on the HQ2 shortlist, Gov. Phil Murphy said at the Jersey City Summit for Real Estate Investment on Tuesday, ROI-NJ reports.
Like other cities snubbed by Amazon, Newark has begun using the toolkit it put together in its recruitment pitch to other companies, including data collection it carried out regarding businesses already in the city and its transit infrastructure, according to ROI-NJ.
Bisnow will be hosting a Future of Newark event Nov. 28 where HQ2 will be among the topics discussed.
“Everything used for Amazon has been recycled on multiple occasions for multiple companies, from small to Fortune 100 companies,” Choose New Jersey CEO Jose Lozano told ROI-NJ. “It was the first time that New Jersey came together from government, higher ed, private sectors, to pull together the necessary data that afforded Newark and New Jersey [the opportunity] to be a Top 20 contender."
Lozano said that he has talked with some companies that are more likely to locate in Newark now that Amazon has chosen elsewhere, now that the city will avoid spikes in property value, office rents and congestion. Newark also does not have to forgo the staggering amount of tax revenue Amazon extracted from New York in exchange for the selection of Long Island City.
Due to New York's sheer size, Amazon will not have the seismic impact it would have in Newark. With Google and Facebook also seriously ramping up their efforts in New York, Marcus & Millichap Regional Manager Brian Hosey told Bisnow that HQ2 "is more of a big headline than [the cause of] a big economic impact."
“With 25,000 employees, that’s less than a 1% increase in employment [in New York]," Hosey said. "There are other companies in the city that hire even more people than Amazon that don’t make headlines.”
If Amazon does wind up precipitating meaningful growth in office or residential rents in the city, Newark and North Jersey on the whole stand to benefit. The value proposition that has long driven people west of the Hudson River would only be thrown into starker relief, according to Hosey, who doesn't anticipate major effects on apartment rents in Jersey.
With the public outcry that the announcement of HQ2 and its tax breaks has caused in New York, it isn't hard to see why both Murphy and Newark Mayor Ras Baraka were overwhelmingly positive in their remarks on Tuesday. In a written statement, Baraka reacted to Amazon's announcement with pride in how the city and state came together, and excitement for future business attraction.
“News that Newark was a finalist highlighted our key advantages: proximity to New York City at a more affordable cost, access to mass transportation, a talent pool fed by half a dozen colleges and an internet infrastructure that allows Newark to offer the fastest and broadest free outdoor Wi-Fi in the country, development opportunities including land with riverfront and park views, and our diversity, a large African-American and Hispanic population," Baraka wrote.
In a bit of serendipity, the HQ2 news came only days after Murphy announced the creation of a department within NJ Transit focused specifically on real estate and the facilitation of transit-oriented development. If Amazon drives workers into the Garden State, it would only provide more impetus for a development wave.
On the other side of the coin for NJ Transit, concerns over traffic and transit congestion will only receive more scrutiny if New Jersey sees meaningful in-migration of commuters due to Amazon. The perpetually gridlocked process of infrastructure investment in the state would then be put under more strain.
“If Amazon moving their headquarters to New York could prompt a reinvestment into transit, that would be amazing," Hosey said. "But realistically, I don’t see it happening.”