In a competition among urban giants for a business giant, could Westchester be a contender? Can it win?
Calling it the “Super Bowl,” Westchester County Executive Robert P. Astorino recently announced that the county will submit a bid for Seattle-based Amazon’s second headquarters.
The announcement came with plenty of marketing flair. Standing in front of the Westchester County Center in White Plains, Astorino delivered remarks pulled from an “Amazon Westchester” cardboard package dropped in by drone seconds earlier. The county center’s large LED boards behind the county executive were lit with reasons why Amazon should consider Westchester for its $5 billion headquarters.
“We have all the right matchups: talent, accessibility, quality of life, value and location,” Astorino said. “And we believe with the strengths that we have and the examples that we have set, that Westchester is the smartest choice for Amazon.”
But the county is sure to face stiff competition from across the country and even the continent, as Canadian cities such as Toronto and Montreal are expected to be in the mix.
Amazon published a request for proposals earlier this month for municipalities interested in hosting the company’s second North American headquarters, dubbed Amazon HQ2. The company said the headquarters will eventually employ as many as 50,000 people.
Astorino said the county will focus its proposal both on Westchester’s urban centers in White Plains, New Rochelle, Yonkers and Mount Vernon and on vacant office space in a more suburban setting in the northern part of the county and along the I-287 corridor.
The county will soon submit its proposal to the state economic development office, which will finalize the documents and submit it to the company before Amazon’s Oct. 19 deadline.
In its RFP, the online retail giant’s said it will look for a metropolitan area with more than 1 million people, a stable business environment and an urban or suburban location with the ability to attract strong talent. Other factors such as walkability and access to major highways and an international airport matter as well.
That leaves the door open for cities in almost every major metropolitan area on the continent. Astorino’s remarks-by-drone maneuver is just the latest tactic from elected officials around the country hungry for the potential high-paying jobs and major capital investment from one of the world’s largest retailers.
The New York Times reports that Tucson shipped Amazon CEO and founder Jeff Bezos a 21-foot cactus to get his attention. The mayor of Ottawa flew to Seattle, while Frisco, a Dallas suburb, has offered to build its entire city around Amazon.
In addition to major cities such as Boston, Chicago, Atlanta and Dallas, Westchester can expect to face competition from within the New York metropolitan region.
One day after Astorino’s Sept. 26 announcement, the New York City Economic Development Corp. said it had proposals from 23 different neighborhoods across the five boroughs with possible sites for Amazon HQ2. In Connecticut, the cities of Bridgeport, Stamford and Danbury are all expected to place proposals. New Jersey economic development officials have promised a bid as well.
Amid the crowded field, Astorino rang off a list of factors that he believes help Westchester stand out. Among them: the 47 percent of county residents 25 years and older with a college or graduate degree; the county’s three Metro-North commuter train lines to Manhattan, and 18,000 acres of parkland. That’s on top of the county’s available office space with proximity to New York City, but at a fraction of the cost of city office space.
Amazon’s RFP asks for municipalities to identify sites that could accommodate at least 500,000 square feet of commercial space by 2019 and up to 8 million square feet beyond 2027.
Reaching that 8 million mark in Westchester may require some creativity. The county’s entire commercial office market is estimated to be about 28 million square feet.
“It’ll be interesting to see where they can do it,” said Glenn Walsh, executive managing director in the Rye Brook office of Newmark Knight Frank. “The 500,000 out of the gate is about as easy as it comes, you have it up in Somers at Pepsi or at IBM, but if you have to go long-term, where do you find 8 million square feet?”
Still, Walsh, who has nearly 30 years of experience in Westchester’s commercial real estate market, said landing Amazon is “a Hail Mary that’s worth throwing.”
Part of the problem in landing Amazon could be a result of Westchester’s recent success in reducing its available space. Howard E. Greenberg, a commercial real estate broker in the county for 30 years, pointed to the trend of residential and retail conversions of underutilized office park properties in Westchester’s main markets.
“The good and bad news is, over the last few years we’ve done a pretty good job of reducing our inventory, such as on Corporate Park Drive (in Harrison), where we’re knocking down over 400,000 feet right there,” said Greenberg, founder and president of Howard Properties Ltd. in White Plains. “We’re reducing our inventory and therefore reducing our vacancy, but there’s just no big blocks.”
That’s particularly true in the southern part of the county. Greenberg said Amazon’s best bet in the county for the space it needs is likely up in the northern county, where two campuses sold and vacated by Pepsico and IBM leave approximately 1.75 million square feet of empty space in Somers.
Somers Town Supervisor Rick Morrissey appeared with Astorino to pitch the open office space in his town. He said Somers has more than 500,000 square feet available at the former PepsiCo headquarters and more than 1 million square feet at IBM’s former campus.
“Tech companies have flourished in suburban enclaves and Somers is a fertile ground for the East Coast tech scene,” Morrissey said.
George Oros, director of the county’s Office of Economic Development, said the county would not need to immediately provide the 8 million square feet. “I think it’s not all going to be in one spot, but I do think Amazon can find enough suitable space here in Westchester County to locate that amount of square footage,” he said.
Amazon is also likely to seek a benefits package from the state, county and municipality that it chooses. Oros said the county Industrial Development Agency could offer assistance with tax-free bond financing, exemption on state mortgage taxes and a sales tax exemption on construction equipment. The local municipality would decide what property tax breaks to offer the company, while the state could offer a range of other incentives.
Oros said the county studied its position against likely competitors before announcing its bid for Amazon HQ2, and likes its chances.
“I’m not worried about space and I’m certainly not worried about competition,” he said. “When I look at our smart workforce, our accessibility with our own airport, train lines, roads that go north, east, south, west. We’re close to New York City, not far from Boston, so I think Westchester stacks up very, very well.”