Coverage: Google plans to build a $1 billion New York campus

Google announced Monday it will spend more than $1 billion to build a new office complex in New York City that will allow the internet search giant to double the number of people it employs there.

Mae Anderson of the Associated Press had the news:

It is the tech industry’s latest major expansion beyond the Seattle-San Francisco Bay corridor. It follows recent steps by Amazon and Apple to set up large operations well outside their home turf.

Tech companies are “coming to the realization that the Bay Area, which has traditionally been the major center of tech activity in the U.S., is getting expensive and crowded,” said Andrew Bartels, principal analyst at Forrester Research.

“A lot of vendors are coming to the realization that ‘We can probably find top talent elsewhere at a more affordable costs, and perhaps a better style of life for employees who may be struggling to make ends meet.'”

The Northeast is attractive because of its large concentration of highly educated young people. New York in particular also offers proximity to Wall Street and already has the second-biggest concentration of tech startups behind the Bay Area and a large base of tech employees, Bartels said. Facebook, based in Menlo Park, California, has over 2,000 employees in New York.

Jack Nicas, Winnie Hu and J. David Goodman of The New York Times reported that other tech companies are also expanding in New York:

Apple, Facebook, LinkedIn and Uber have also embarked on recent New York expansions — much of it driven by a hunt for talent. Each is creating hundreds or thousands of high-paying jobs and leasing or building millions of square feet in commercial real estate.

“Law, medicine and finance have been superseded by information technologies,” said Mitchell Moss, an urban-planning professor at New York University who studies the city’s economy.

Google’s new campus selection of Hudson Square, once an industrial district just south of the West Village, strengthens its grip on Manhattan’s West Side, likely accelerating the neighborhood’s changes. That would mirror how Google transformed Manhattan’s Chelsea neighborhood, where it has had an office since 2006. The company bought Chelsea Market for $2.4 billion earlier this year and an adjacent building in 2010, and it leases other space in the area, about a 20-minute walk from its new offices.

Levi Sumagaysay of The San Jose Mercury News reported that Google is growing faster outside the Bay area than inside:

Porat also noted that Google is growing “faster outside the Bay Area than within it,” mentioning that the company this year opened new offices and data centers in Detroit, Boulder, Los Angeles, Tennessee and Alabama. In addition, Google’s plans for a transit village in San Jose are expected to transform that city’s downtown. Also last month, the company bought a $1 billion business park in Mountain View just blocks from its headquarters, and last week unveiled big redevelopment plans for northern Mountain View.

Last week, Apple announced it would build a new, $1 billion campus in Austin and open new offices in San Diego, Culver City and Seattle over the next few years. That followed Amazon’s announcement last month of its choice for its second headquarters, New York City and Arlington, Virginia.

Amazon, one of the world’s most valuable companies, has been criticized for seeking tax breaks from cities as it held a high-profile contest before it made its choice for its new sites. A Google spokeswoman said Monday that the company did not pursue tax incentives for its New York expansion.