Why Newark could be perfect for Amazon's new headquarters
New York, San Francisco and Denver have all been heralded as the best city for Amazon’s new second headquarters, HQ2.
But what about Newark?
Yes, the city in New Jersey. The state, like many others trying to land the estimated 50,000 new jobs and $5 billion in investment, plans to submit a bid by the Oct. 19 deadline. And Newark is the state’s best chance of winning. If you peruse Amazon’s eight-page request for proposals, Newark meets all the minimum criteria outlined.
New Jersey’s largest city is accessible to tech talent (it’s home to New Jersey Institute of Technology, abuts Rutgers University, is about 60 minutes away from Princeton University, and is a brief commute from New York City’s major academic institutions), has an airport and several other transit links (train lines, interstate highways and ports), and maybe most importantly, has affordable shovel-ready sites for the eventual 8 million-square-foot, $5 billion complex that would rival Amazon’s Seattle headquarters.
“Newark has a world-class port and a depth of resources,” says Andrew Sidamon-Eristoff, former New Jersey state treasurer who wrote an opinion piece earlier this week touting Newark’s worthiness. “At the same time, it does not have the kinds of pricing pressures [real estate and living costs] that would be a barrier somewhere else.”
Mini Amazon campus already exists
Amazon already has a foothold in Newark. In 2008, Amazon acquired Newark-based Audible, an online seller of audiobooks, for $300 million. It has since maintained the subsidiary’s headquarters there. In fact, Audible is redeveloping a historic church in the city for its new home.
And that’s just a fraction of Amazon’s presence in New Jersey. The company has taken more space there than in neighboring states New York or Connecticut. In the past five years, Amazon has built more than 5 million square feet of warehousing/distribution space and has 13,000 full-time employees in New Jersey, according to a report by Moody’s Investors Services.
While Newark is located north of these Amazon facilities, it could be an ideal location because it is going through somewhat of a revitalization. (In the past, Newark has been plagued by crime, poverty and high unemployment.) Some $2 billion worth of real estate development, including 2,000 units of housing, is planned or underway in the city.
Among those projects is developer Lotus Equity Group’s redevelopment of the Bears & Eagles Riverfront Stadium, which will be transformed into an 8-acre mixed-use project with office and housing.
Ben Korman, CEO and founder of Lotus, has been speaking to the city of Newark to possibly become the centerpiece of the Newark’s bid. Lotus’s plans for 500,000 square feet of office space could accommodate Amazon’s first phase for HQ2.
“Newark has tremendous infrastructure,” said Korman “There are quite a few sites available that are positioned well for being a tech campus.”
Amazon HQ2 would give Newark a much-needed boost as developers like Korman help the city become a 24/7 community. Most believe the local government would be willing to provide generous, competitive tax incentives to lure the company. Currently, a few major companies, Panasonic Corp of North America ‘s headquarters, Public Service Enterprise Group and Prudential Financial, call the city home.
Dark horse or longshot
But while Newark scores high when it comes to transit (United Airlines’ hub is at Newark International Airport with direct flights to Seattle) and some would argue access to tech talent, the city is not seen as a real contender.
“Amazon will end up picking a city where young people want to live, like Manhattan,” says Scott Galloway, a marketing professor at NYU Stern School of Business. “The reality is Newark has a bad brand.”
While Whole Foods Market recently opened in Newark and celebrity chef Marcus Samuelsson will debut a restaurant there, Newark as The New York Times recently put it, “has been a symbol of America’s decaying cities for decades.”
Perhaps an Amazon headquarters is just what Newark needs to revitalize its image.
Amanda Fung is an editor at Yahoo Finance.