The Real Deal New York

Real estate execs say Amazon “is great” for New York but question if the city’s infrastructure can sustain new residents

The e-commerce giant this week announced it would bring 25,000 jobs to Long Island City
By David Jeans | November 15, 2018 06:16PM

From left to right: Stephen Ross, Richard LeFrak, William Rudin, Scott Rechler, MaryAnne Gilmartin, and Robert Blumenthal

A lineup of New York real estate giants agree that Amazon is good for New York. But there’s just one question: Can the city’s infrastructure sustain the e-commerce giant?

During a panel hosted by NYU Schack Real Estate Institute on Thursday, real estate executives stressed that developers and the city need to ensure infrastructure upgrades are made to support the influx of jobs the e-commerce giant is bringing to Long Island City.

RXR Realty’s Scott Rechler acknowledged that “there’s a ton of people pushing back against Amazon. Some of it is legitimate fear.” But said that “fundamentally, bringing 25,000 high paying jobs to our city, and everything else that’s going to reverberate around it, has to be a positive.”

In addition to Rechler, the panel — hosted at The Pierre Hotel — included Stephen Ross of Related Companies, Richard LeFrak of LeFrak, MaryAnne Gilmartin of L&L MAG and Bill Rudin of Rudin Management.

The discussion got off to a turbulent start, after protestors interrupted the speakers. Moments after moderator Robert Blumenthal of Deutsche Bank Securities threw the first question to Ross, five protestors claiming to be students stood up one at a time and interrupted the Related Companies chairman, yelling objections to his company’s use of nonunion workers at Hudson Yards. The audience booed each protestor as they left the dining hall.

“While we respect the right of dissent, it cannot take the form of disrupting speakers at an NYU event,” the school said in a statement.

As the audience settled, the conversation quickly turned from the current political climate to Amazon.

“If politics clears away, I think we’ll see some infrastructure funding that is needed,” said LeFrak, later adding that: “Amazon is here because they couldn’t stuff anyone else in Seattle.”

Gilmartin drew comparisons of Amazon’s arrival to her time at Forest City New York, when the development of Atlantic Yards (now Pacific Park) saw a decade of delays and dozens of lawsuits.

“We followed a very same process that Amazon has elected to follow,” she said, pointing to the bureaucratic hoops large developments must face in New York.

For example, she said, the cost of developing the subway entrance at Barclays Center reached $72 million, almost 10 times higher than the company had previously estimated.

“That is not the way the city is going to rebuild its infrastructure,” she said. “It’s just not sustainable.”