From left: Michael J. DeMarco, W. Nevins McCann and Steven J. Pozycki
By Joshua Burd
The sweepstakes for Amazon’s second headquarters had ended just a few hours earlier, but Mike DeMarco invoked the name of another technology giant with an outsized footprint.
With less fanfare, comparatively speaking, Google in recent years has steadily grown its presence across Manhattan’s West Side, energizing neighborhoods such as Chelsea and the Meatpacking District. And published reports say the company is preparing for another major expansion that would push its portfolio in the city beyond 6 million square feet.
It’s the kind of story that Jersey City can only hope for.
DeMarco doesn’t think it’s so far-fetched, given all the city has to offer.
“We just need a corporation to make a decision to come over to the waterfront and say, ‘I want to build, I want a lower-cost environment, I want to take advantage of the tax incentives that the state has,’ ” said DeMarco, the CEO of Mack-Cali Realty Corp., adding: “ ‘I can operate much more efficiently and, more importantly, I can recruit, attract and retain good talent because of the logistics.’ … We’re waiting for that next company, whether it’s Twitter, Lyft, Uber.”
It was a reminder that, for all the extraordinary growth in Jersey City, there is still untapped potential in some respects. That includes the fact that there has been no new office construction along the city’s waterfront in 20 years.
DeMarco and Steven J. Pozycki, the CEO and founder of SJP Properties, said they hope to change that as part of a joint venture between their firms. Speaking Tuesday at the Jersey City Summit, the executives weighed in on the city’s commercial real estate market and the previously announced, 1.2 million-square-foot office building that they are planning for the Harborside neighborhood.
“You want this to be a commuter city to New York,” Pozycki said. “But we want it to be a city that can satisfy the elements of live-work-play right in the neighborhoods — and we’ve developed some great neighborhoods here.”
The powerhouse developers last fall unveiled plans for what they call Harborside Tower, a high-tech, 40-story office building at Hudson Street and Christopher Columbus Drive. The firms have said they will require a substantial commitment from a tenant before breaking ground, but have been encouraged by the demand for new space just across the Hudson River.
“One thing we’ve seen in New York is that the whole city has shifted west because they just needed new buildings,” Pozycki said, citing the massive Hudson Yards development. While some companies do prefer having refurbished space in historic properties, he said, “the 100-year-old buildings in New York just don’t cut it for today’s population.
To that end, “having a new building in Jersey City is very important.”
DeMarco and Pozycki spoke during a Q&A with W. Nevins McCann, who co-chairs Connell Foley’s real estate and land use groups, as part of a conference that drew a crowd of more than 800 to Mack-Cali’s existing Harborside complex. The full-day program covered everything from retail and amenities to emerging markets and the continued need for balanced development in Jersey City.
Another common theme was the fact that Jersey City still offers value relative to New York City. DeMarco also pointed to its accessibility and transportation options, noting that Mack-Cali has mapped commuting times around Harborside, showing prospective tenants that employees who live in Manhattan and even parts of Brooklyn and Queens can be in Jersey City in less than 45 minutes.
It was also a fitting time to revisit that sales pitch, given that Amazon just a few hours earlier had formally announced that it was splitting its coveted HQ2 project between the Long Island City section of Queens and northern Virginia. DeMarco said that would put the company’s requirement in the region at around 2 million square feet, noting that “we could easily support that with a few areas here.”
“It could have easily been Jersey City,” DeMarco said. “Just change the ‘Long Island’ to ‘Jersey’ and you’re good to go.”
And despite the savings that tenants can find west of the Hudson, both DeMarco and Pozycki said incentives were still important to luring a large employer from out of state, especially with New Jersey’s high cost of living and the disruption caused by such a move. That makes it all the important for the state to renew and refashion tax credit programs such as Grow New Jersey before it expires at the end of next June.
“It leaves a period of time where companies looking for space don’t really have a definitive idea of what’s going to happen,” Pozycki said. “And that’s a bad position for the state to be in. I don’t know if you have to pay companies to move from Morristown to the waterfront, but if you’re going to move 400, 500 or 1,000 people with high-paying jobs into New Jersey from out of state, that’s worth the compensation as deferred tax.”