Category Archives: Business

HQ2 YEA/NAY, KATZ TO JVB TO O’LEARY, CHANGE A KUMON’, 80%?

57 and 33 story towers coming here

The only thing that is constant is change – Heraclitus circa 500 BC

POLLS can be funny, so I try not to read too much into them.  Let’s take one released this week showing 60% of Queens residents favor Amazon coming here.  Maybe. More likely 60% are neutral or “Don’t Know” where they stand on HQ2 in LIC.  If the deal really is even-handed that’s where the majority should sit under the bell-curve of a standard distribution.  But that doesn’t make headlines.

Well thought out analysis can also be buried in favor of sensationalism.  The most eloquent opinion piece I have read in the morass that has been written about HQ2 in the last month, was scripted by Seth Bornstein who heads the Queens Economic Development Corp. which despite its industrialist-like moniker is largely dedicated to helping out people from modest backgrounds. Having read his monthly letters for years, I can tell you that Seth knows Queens.  He also knows the history of New York City, which in a nutshell is that it’s always changing, and usually at a faster pace than the rest of the world.  Continue reading

BE CAREFUL WHAT YOU WISH FOR

Which side of the Basin?

WHAT if Amazon did an about face and bid adieu to locating HQ2 in Long Island City, stating that the rancor over subsidies, additional demands, and outright opposition to gentrification made it untenable.  How would that make you feel? Continue reading

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MIGHT AMAZON HQ2 OCCUPY THE PLAXALL SITE?

First let me state that every detail about Amazon’s locating half of their HQ2 in Long Island City is purely conjecture, including the possibility of their actually coming here, which Vegas currently handicaps at 1:4. Thus as much as I want to share more of my opinions on what, for better or worse, will be the most transformational news to effect LIC, I will hold my tongue until any official announcement. Because the devil is in the details.

Nevertheless considering the high probability (1:4 = Yes, not 4:1), I will entertain and analyze a rumor, even if it turns out to be a meaningless exercise – or completely wrong. That rumor is that Amazon will locate their headquarters on the Plaxall/Water’s Edge land – a possibility which has been mentioned in several articles, without any serious validation to my eye.

Anyway, there would be two major positives for Amazon to choose this site, and one major negative, plus a whole bunch of minor +/-’s that I won’t bother fleshing out here. Positive number one is that it will allow the company to build a campus from the ground up, tailored to what they need in terms of amenities and aesthetics for attracting today’s white collar workers. Positive number two is the free advertising given the full visibility of the waterfront by both everyone in Manhattan and all the tourists – whether they be on the ferry, Circle Line, or even viewing on TV. It’s a headquarters and a showcase. The big negative? It’s not really near a subway line. Everyone who works there would have to trudge 7-9 blocks through Hunters Point if they arrive by subway, or add a mini-leg to their commute via shuttle-buses.

Food for thought, and while we’re on that topic, here are some non-Amazon LIC links:

Adda’s Canteen Style DishesThe New Yorker pays homage to our new local Indian restaurant

Bryce Harper Moves Into a Long Island City Apartment Building Where 4 Mets Currently Livewouldn’t it be cruel if he signed w/ the Yankees?

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PREDICTIONS, RUMORS, THOUGHTS ON AMAZON HQ2 IN LIC

Two weeks ago I drafted a post on local property values in response to the headlines announcing LIC’s first billion dollar condo building. It questioned the viability of attaining $1 bil in an increasingly softening market. The Amazon HQ2 announcement blew that thesis out of the water. It’s a game-changer so back to the drawing board I went with some new real estate predictions, and while I was at it some other thoughts I had on HQ2 as well as some rumors.

Upon confirmation, raw land prices and development sites are immediately worth 25-75%1 more. Because all other costs (labor, materials, financing, etc.) are fixed, this is the only variable that moves so the total project only increases by 5-15%. This is obviously a huge boon for current land-owners.
Retail – 3+ yrs away before any impact on revenues for local retailers but all retail rent rollovers will incorporate an Amazon Premium, especially those near where HQ2 is actually located
Rental Building Owners – the announcement fully counters the current softness as far as refinancing goes. Owners can now do so using peak 2016-17 pricing
Renters – zero effect for the next 2-3 years. If softness persists, as it should with all the supply, concessions will increase but posted rent levels will stay flat. Then when Amazon starts moving in the concessions will disappear.
Homeowners – the effects will not be so immediate, but prices in LIC should firm 5-10% over the next 12 months. Going forward they will do 2-4% a year better than other NYC neighborhoods for the next five years.

For those looking to make a personal investment, if HQ2 is placed in Court Square or Queens Plaza, I believe the highest expected return going forward will be in Astoria and Sunnyside. It will be slightly less so in Greenpoint (but all those new developments just got a big lift), unless HQ2 is placed in Hunters Point. IF YOU WANT TO SCORE A BARGAIN START LOOKING NOW, and be ready to place a bid once confirmation comes.

As for where HQ2 will be located, that’s complete speculation at this point. One name thrown out for a turnkey foothold, is the Citi building where Citicorp’s departure in 2020 will open up one million square feet.

Or, if Amazon wanted to build a quasi-campus from the ground up, there are numerous parcels in Court Square/Queens Plaza that could be rezoned/repositioned and the multiple subway lines that merge there make it a logical choice.

Finally, there is a rumor that the Plaxall property on the waterfront would be a very attractive option, which when grouped with Water’s Edge and Vernon Swamp is where Amazon could build its own version of Hudson Yards on a highly visible (and large) piece of land…

Thoughts – now that the bake-off is seemingly over, I find it interesting that Amazon decided to completely discard the lower cost-of-living factor in choosing DC and NYC. While some think the whole exercise was a sham and the fix was in, I believe Amazon came to the conclusion they needed world class talent to grow going forward. For all that can be said about cities like Dallas and Atlanta, when you wake up in the morning you’re still in Dallas or Atlanta, not NYC.

The details about the deal the city/state struck with Amazon have yet to be revealed, and until they are I hesitate to give the company’s arrival my endorsement – this could be another instance of Foxconn in Wisconsin whereby the state basically paid for the factory and subsidized the workers to have it located there 2. Nevertheless this decision has the chance to be very favorable for both the company and Long Island City, not to mention NYC.

Yes, there will be collateral damage as it won’t be as affordable as before and there will be some really big winners who just won the lottery (the aforementioned land owners). As for crowding – particularly in the subways, an issue that I have been highly critical about, by placing the workers in LIC as opposed to Manhattan, it will fill the empty subway cars deadheading back to Flushing in the morning and Hudson Yards in the evening. Or better yet, commuters can easily walk or bike to work.

If the deal is struck and it’s reasonable, it will cement Long Island City’s standing as the best place to live (and work) in the best city in the world. And I guess that’s what Amazon thought too.

  1. completely back of the envelope so went with huge range, just wanted to emphasize who had the most to gain []
  2. or in LIC’s case guaranteed Sunnyside Yards be decked over or other egregious zoning upsizing []
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AMAZON CHOOSES LONG ISLAND CITY FOR HQ2!!!

Amazon has chosen Long Island City as one of the two locations for its second headquarters according to The New York Times. Crystal City, Virginia on the outskirts of DC will be the other. Each location is expected to add 25,000 workers over the next few years, and be transformed in the process.

What that transformation will look like for LIC and how it will proceed is unknown at this time, but it is believed that the state and Governor made many concessions and offered many incentives to lure the company.

We have been covering the possibility of this happening from the moment the initial bake-off was announced with 40 candidates. Obviously Amazon felt as we do that Long Island City was the primo location for being a part of NYC – the greatest city in the world – they just had to go through the whole process I guess. In addition to all the wonderful attributes of LIC, it also had the logistical advantage of being near Amazon’s biggest customer, my wife.

Amazon Plans to Split HQ2 in Two Locationsinterestingly, when push came to shove they tossed that whole ‘affordability’ criteria right out the window by choosing NYC & DC

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INDEPENDENCE HAS ITS VIRTUES AT LIC PHARMACIES

Scripts, organics, and ...toys

Scripts, organics, and …toys

Simple business plan "Just get'em to like me" -Josh

Simple business plan “Just get’em to like me” -Josh

Everybody wants to support their local retail merchant, but given the chance to save a few bucks most still gravitate to the lowest bidder.  One industry whose prices are basically fixed ((due to insurance, medicare, and medicaid)) is prescription drugs.  Nevertheless there’s a misconception that the chains offer lower prices than independents.  Furthermore, with the exception of some loss-leaders, many non-prescription items are actually more expensive than their local peers, CVS and Rite Aid are no bargains.  Given this background and several favorable anecdotes and endorsements by residents, I decided to profile the two independent pharmacies in Hunters Point. Continue reading

WHAT’S UP WITH THE WATER’S EDGE DEVELOPMENT SITE?

Que pasa?

Que pasa?

In February of 2016 the City decided to develop the land in and around the former Water’s Edge Restaurant on 44th Drive by the East River.  Given the prospective zoning variance the city was offering, a pair of 60-story towers were possible on this choice piece of property1, so the proposed project is massive.  RFP’s from developers were due that May and were required to include a new school, some affordable housing, and a few other stipulations most notably a set aside for light manufacturing.

After submission the proposals would be reviewed by the NYCEDC (Economic Development Corp) and I was under the belief that shortly after the New Year they would pick 2-3 of those they deem viable for a bake-off, during which time there would be some community review and recommendations and then a winner would be chosen.  Now I’m hearing grumblings that the city is going to bypass the middle step and just render a final decision.

Which is really a shame because in addition Continue reading

  1. actually two properties across the street from each other []
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ALTICE USA, fka CABLEVISION, MOVING HEADQUARTERS TO LIC

Altice USA, formerly known as Cablevision, is moving it’s headquarters to Long Island City from Bethpage in Long Island.  In addition, it’s Manhattan offices, where a lot of the big hitting advertising and sales executives are located, will also be folded into the new headquarters location.  As such, this $17.7 billion corporation1 will be the largest headquartered in LIC.

The implications of this are even bigger for Long Island City because Continue reading

  1. It’s Enterprise Value (EV) when purchased last year []
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THE DOWNSIDE OF GENTRIFICATION IN LONG ISLAND CITY

Making Deep Purple Proud

Making Deep Purple Proud

THE New York Times is out today with a story on the emptying out of the Blanchard and Paragon buildings on Borden Avenue, in order to make way for higher-paying office tenants.  Whole businesses are vacating the premises, typified by the protagonist of the story, a furniture upholsterer who is leaving for Long Island.  LICtalk has previously profiled two businesses in the Blanchard.  The first BklynBooks (aka iPodMeister) was mentioned in the Times story, and is moving to Paterson, NJ.  The second, Manhattan Fruitier, has moved a little further east to the LIC/Sunnyside border.  Prophetically, the owner of the latter sent me this quote when I asked him about the sale of the building a year ago: Continue reading

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NEW CONDOS STILL SELLING LIKE HOTCAKES IN LIC

5Pointz about to cast its 40+ story shadow on Iglesia de Cristo and Murray Park, and the benefits are?

5Pointz about to cast its dual 40+ story shadows on Iglesia de Cristo and Murray Park, and the benefits are?

ACCORDING to an article this weekend in Crain’s, The Harrison, a 27-story/120-unit condominium in Court Square, is 60% sold despite the fact that it won’t be completed until June, and thus doesn’t even have a model apartment to exhibit.  In addition, the article mentions that all 33 condos in The Marx are sold.

The latter building is located on the Astoria/LIC border across the street from the Kaufman Studios.  Heretofore I’d refer to this as a no-man’s land, yet Continue reading

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