Real Estate

ROI-NJ’s pick for where Amazon should put its HQ2: Newark

From our print edition

By Tom Bergeron
Newark | October 11, 2017 at 12:01 pm

By Tom Bergeron
Newark | October 11, 2017 at 12:01 pm
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Brokaw Photography/Bill Brokaw
Newark is one of four cities that still has an opportunity to win the state’s endorsement of its Amazon headquarters application.

Newark has the airport, two train stations and the port.

It has the space. For a huge corporate campus — and for more housing starts.

It has culture and entertainment with the Prudential Center and New Jersey Performing Arts Center.

And an educated workforce, with more to come, thanks to the New Jersey Institute of Technology and Rutgers University-Newark.

It even has precedent for large international corporations, as it counts Prudential Financial and Panasonic North America as two of its longtime residents.

Of course, so many other cities across the country can rattle off similar attributes in the quest for Amazon’s new HQ2 headquarters, and the potential $5 billion investment and 50,000 jobs that could come with it.

But here’s an attribute they can’t claim: Newark arguably has the fastest internet speed of any city on the planet. And it’s cheap, too.

“This is, without a doubt, the biggest differentiator of not just the proposals in New Jersey, but across the country,” said someone familiar with the city’s proposal.

The person — like so many ROI-NJ spoke with — requested anonymity because they are not authorized to speak for the Newark proposal.

“We have 10 gigabit-per-second speed, which is as fast as anywhere in the world,” the person said. “And it will come at a cost that is significantly cheaper than anywhere in the world.

“This speaks to Amazon, which is a technology company at its heart.

“This will be the biggest surprise to people across the country, the biggest thing that will make people say, ‘Maybe Amazon could go to Newark.’”

For Newark, a city that has struggled to get out of its own way for the last 50 years, it’s an example of forward thinking years ago paying off.

Because of its proximity to New York City and low cost for space, the city has long attracted utility and technology companies.

Since the dot-com era began more than two decades ago, the city not only has encouraged them to build state-of-the-art fiber networks, but to install much more than they needed.

And, since the city had so much land that was not properly utilized, gaining access to underground areas to lay the fiber optic networks (which use small pulses of light to transfer data and video signals) was a lot easier to do than it would have been in more established cities.

In other words, it would difficult for any other city to play catch-up.

Newark’s other differentiator is harder to quantify.

Amazon’s arrival will have an enormous economic impact on whatever municipality it chooses.

In Newark, Amazon will have the ability to completely transform a city, a socially conscious investment that would be difficult for other areas to match, officials said.

And experts said having Amazon in Newark would spur untold housing and retail starts, while bringing a tax base (from the employees, not necessarily Amazon) that could help build new schools and provide more educational and occupational opportunities for residents.

(READ MORE from ROI-NJ on the Amazon HQ2 effort.)

Newark Mayor Ras Baraka thinks so.

“It could be an incredible transformative story for Amazon,” he said. “All the other places they could be thinking about are almost cliché. They could show up in Newark, which has pulled itself up by its bootstraps, and make a difference.

“To come in and be a part of that and make it happen in light speed would be a story not just for the city, but for Amazon.”

Having Amazon in Newark also could change its status as a college town.

The city likes to boast of the tens of thousands of college students in the city each day, but the fact remains: many are commuters. Amazon could change that dynamic, too.

Newark could become a hub of innovation, tapping not only into the schools, but into the workforce and ideas at the New Jersey Innovation Institute and forward-thinking companies such as Audible (a company already owned by Amazon) and Panasonic.

And, while some may bristle at the idea of going a city that is not a major market, Baraka feels that gives Newark an advantage.

“We’re in the middle of all the markets — Boston, New York, Philly, D.C.,” he said. “Plus, we have the space.

“We’re not so densely populated that we couldn’t handle the development. I think we have as good a shot as any.

When Amazon will pick its new (second) home isn’t clear.

What also isn’t clear is what is most important to the company.

“They gave out a whole bunch of needs and wants — but they didn’t give out an order of importance,” said one top player in the economic development sector.

“If being socially conscious and have a social impact is what matters to them most, then Newark has as good a shot as any. But if it’s No. 5 on their wish list, it wouldn’t be that big of deal.”

Baraka feels Newark can satisfy whatever is at the top of Amazon’s wish list.

“Between the transportation, the location to New York City, the fiber optics underground, the airport, the port, this is probably the best place to be on the Eastern seaboard to go if you are an established business or a growing business.”

A look at the other three top options

Jersey City

Pros: Cool, modern, progressive, livable city, with more housing starts than anywhere in the state. Employees could live and work here without a car — and still have access to all the city (and New York City) has to offer.

Cons: It has easy access to New York City, but how about the rest of New Jersey? Commuting to work from the suburbs would be difficult.

The quote: “If everything else is there and it comes down to where you want your employees to live and work, why wouldn’t you choose Jersey City?”

New Brunswick

Pros: It’s a well-established college town, which already has a major international company in Johnson & Johnson, and clearly is on the upswing. Housing and cultural options are plentiful — and suburban living is available if that’s what is desired. New York City is just a train ride away. This is not an up-and-coming city, it is there now.

Cons: It’s in the middle of the state, hardly the urban location Amazon says it is looking for.

The quote: “You’re going to get a lot of cooperation from the city; it’s really easy to work with. There’s great access to the Turnpike, which gives them great access to all of the distribution sites. And there’s plenty of suburban housing options. Let’s not pretend everyone wants to live in apartment. People will still want big houses and the area has them.”

Camden

Pros: Plenty of space in a municipality the state has worked hard to completely transform into a business-first location. Connection to Philadelphia brings many of the same pluses that Newark and Jersey City get with New York City.

Cons: The city is aiming to transform itself, but its years behind where Newark and Jersey City are on that curve. Amazon could “get in at the beginning,” but that’s a tough sell when everyone in the country is competing.

The quote: “It’s nice to say it could be a joint bid with Philly, but how would you handle the incentives between two states? And why wouldn’t you just go to Philly in the first place?”

2017-10-15T20:54:38+00:00