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The Switch

Google announces $1 billion expansion in New York City

"New York City continues to be a great source of diverse, world-class talent - that's what brought Google to the city in 2000, and that's what keeps us here," says Ruth Porat, senior vice president and chief financial officer at Google. (Jose Sanchez/AP) (Marcio Jose Sanchez/AP)

By Hamza Shaban

December 17, 2018

Google announced Monday that it will spend more than $1 billion to build a new campus in New York City, a major expansion that could add more than 7,000 jobs to the area.

The announcement comes just days after Apple said it will build new offices across the United States, a plan that includes adding hundreds of jobs in New York. Amazon.com said earlier that it will establish another headquarters in Queens, pulling in tens of thousands of highly paid workers. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.)

"New York City continues to be a great source of diverse, world-class talent - that's what brought Google to the city in 2000, and that's what keeps us here," said Ruth Porat, senior vice president and chief financial officer of Google and parent company Alphabet. Google's New York campus, dubbed Google Hudson Square, will span more than 1.7 million square feet, encompassing multiple leased buildings on Hudson and Washington streets, Porat said in a blog post.

Google employs more than 7,000 people in New York City who work on teams in core operations, including search, advertising, maps and YouTube, the company said. Over the next decade, the Hudson Square campus has the capacity to more than double Google's New York head count.

Tech industry leaders say that firms and entrepreneurs are drawn to New York because of its educated population and access to capital. Its arts and culture, restaurants and bars, and reliance on public transit have brought in a massive talent pool of skilled workers who fuel innovation. New York's thriving tech scene employs 320,000 people, according to the New York City Economic Development Corporation (NYEDC). Investment in local tech start-ups has also dramatically increased. The NYEDC said new tech companies raised $12 billion in venture capital last year, up 40 percent from 2016.

The moves by West Coast tech giants to fortify their presence in New York highlight the city's ascendance as a technology stronghold. But the planned expansions there have also brought criticism. Policymakers, economists and community activists point to rising real estate prices and strained public infrastructure in the marquee tech hubs of Seattle and San Francisco as examples of the painful drawbacks of tech industry growth.

New York's pull on tech companies also underscores what analysts say is a growing gap between all-star metro areas already rich with talented workers and less affluent, smaller cities that lack a significant tech industry footprint. According to a recent Brookings Institution report on economic development, the country's most prosperous cities have strengthened their economic dominance since the financial crisis, as the rise of information technology has rewarded areas already dense with tech firms and skilled workers.

Google plans to begin its move by 2020, the company said, and the campus will become the primary location for its global business organization.

Question

• What is interesting about how technology, politics and geography interacts in NYC?
• Is NYC ready for the switch?