Google to Build $1 Billion NYC Campus, No Tax Incentives Required

The Google New York offices at Chelsea Market Space Ninth Avenue. Photo: Tim Clayton - Corbis/Corbis via Getty Images

There’s about to be a lot more Google in New York City, with the company announcing today it plans to spend $1 billion to build a new campus near the Hudson River. Google nabbed the nearby Chelsea Market building for $2.4 billion this past February. The new campus, expected to be about 1.7 million square feet, will expand out along Hudson and Washington Streets, and the tech giant plans to bring 7,000 additional employees to New York, making the city the center of its sales operations. All told, Google would own about 7 million square feet of real estate in New York.

Google’s investment stands in stark contrast to Amazon’s own satellite headquarters, slated to be built in Long Island City, thanks to roughly $3 billion in tax incentives, and which will occupy roughly 8 million square feet.

Google hasn’t passed up the chance to tweak Amazon during a cycle of bad publicity for the e-commerce giant. “[Amazon is] running their own play and it’s a very different play than ours,” said William Floyd, the head of external affairs for Google, speaking to the New York Times last week. “We’ve been growing steadily for the past 18 years without heralding trumpets, or asking for support from the government. We’ve done it by the dint of our own work.”

How both companies have approached expansion in NYC does throw the difference between them into sharper relief. Amazon, which has years of experience in real-estate negotiations thanks to building out its network of fulfillment centers, has maintained the mind-set of a low-margin retailer. Its internal ethos can be summed up by Jeff Bezos’s “Day 1” philosophy — treat every day like it’s Day 1 at a start-up, even when you’re a company that controls 50 percent of all e-commerce. It’s been a very effective strategy for getting at the estimated $90 billion local governments in the U.S. spend every year trying to lure businesses. Its HQ2 search, from the moment it was announced through its long and winding backroom negotiations, seemed to operate from the very Ayn Randian perspective of not who was going to let them carve out as much taxpayer money as possible, but who was going to stop them.

Google, meanwhile, has tried to appear much more warm and fuzzy when expanding, especially when it comes to office space. Sam Liccardo, the mayor of San Jose, wrote a Medium blog post singing the company’s praises, saying that Google didn’t “ask for a dime” in tax breaks, as long as the city agreed to negotiate in good faith on the actual value of the land. What went unmentioned in Liccardo’s piece is that the city is currently being sued by two nonprofits due to NDAs that kept the citizens of San Jose in the dark about the exact terms of the deal. And Google will happily accept millions in tax breaks when building its data centers, which tend to get much less public notice.

But when compared to Amazon, a company quickly gaining a reputation for being rapacious, Google is coming out looking much, much better in the public eye. How much these small PR wins or losses matter in actually changing consumer behavior — or the bottom line of either company — remains up for debate.

Google to Invest $1 Billion in NYC, No Tax Incentives Needed