Silicon Alley U

Will Stanford Take the F Train to Silicon Island? Tensions Rise as Deadline for Tech Campus Approaches

Will Silicon Alley U. go to a visiting favorite or the hometown underdogs?
roosevelt island Will Stanford Take the F Train to Silicon Island? Tensions Rise as Deadline for Tech Campus Approaches

Here on Silicon Island?

“One of the things that infuriates me personally is we always seem to get left out of the conversation,” said Queens Civic Congress president Patricia Dolan. “Every time the mayor of the City of New York thinks about doing something wonderful, he should be thinking about Queens!”

It was a mild Monday evening in Flushing, a 15-minute walk from the last stop on the 7 line. Ms. Dolan, a “gritty, determined, old Irish biddy,” according to a recent comment on the local blog Queens Crap, was hosting an economic development forum to discuss, in part, Mayor Bloomberg’s plan to build a graduate engineering and applied sciences campus to rival Stanford’s program on the West Coast.

If replicating the talent engine that fuels Silicon Valley sounds ambitious, City Hall’s underlying vision is even more enterprising. New York City’s Economic Development Corporation has offered universities around the world a chance to compete for city-owned land in the hopes of besting the Valley, wresting the title of innovation capital from global competitors and remaking New York’s industrial landscape. So long Goldman Sachs, hello start-ups—if it comes to that, of course. Estimates are that the project will generate $6 billion in economic activity over the next few decades and add 8,000 construction jobs and spin out 400 companies in the coming years.

The E.D.C.’s application makes no bones about its goal: “Increase the probability that the next high growth company—a Google, Amazon, or Facebook—will emerge in New York City and not in Shanghai, Mumbai, or Sao Paolo.”

The catch: The winning school chooses the location, but the bias is toward the preselected sites, which also include Governors Island and the Brooklyn Navy Yard. (Staten Island has since been nixed due to lack of interest.) So, in addition to the school’s lobbying the city, neighborhood representatives are lobbying the schools.

That night in Queens, Ms. Dolan delivered her admonishments in the direction of the podium where N.Y.C. E.D.C. president Seth Pinsky had just finished trying to convince the room that building the campus on the southern end of Roosevelt Island, the most popular of three proposed locations, would be a boon for Western Queens. As Mr. Pinsky told the room, neighborhoods like Astoria, Long Island City and Sunnyside would naturally be top-of-mind for fledgling startups looking to relocate from Roosevelt Island.

“Roosevelt Island is not Queens,” Ms. Dolan interrupted with a humph. “And I didn’t say it was,” Mr. Pinsky retorted before launching into the reasons why the recently rezoned Willets Point, once a haven for chop shops that even Robert Moses failed to corral, wouldn’t work.

If tensions are running high over the proposed campus, however, optimism is bubbling even higher. “This is like China,” said one bewildered academic, referring to the proposal’s scope and objectives. It may have been institutions like Carnegie Mellon that prevented a city like Pittsburgh from going the way of  Detroit, but recently emerging-market countries have been more likely to consider this kind of project. Last year, for example, Russian president Dmitri Medvedev announced plans to build a Soviet Silicon Valley outside Moscow. He hosted a delegation of top execs from eBay and Twitter, as well as Ashton Kutcher, poster boy for the new Hollywood triple threat—actor/verified Twitter user/tech investor—who live-tweeted his visit.

As the Oct. 28 deadline for proposals approaches, both neighborhood advocates and the institutions bidding have intensified their campaigns. Scuttlebutt has Stanford as the frontrunner and Roosevelt Island as the likely site, agitating folks like Ms. Dolan and institutions like N.Y.U. No one disputes the need for talented engineers. Critics, however, are skeptical about whether investing in academia, where curriculums adapt at a glacial pace, is the best approach to close that geek gap: call it the Peter Thiel school of thought, after the billionaire Facebook investor who in May paid 24 kids $100,000 a piece to drop out of school so they could focus on their startups.

The E.D.C. is fronting only $100 million toward construction costs, which could easily climb in the billions, all told. Mr. Pinsky has explicitly told the press, “The less they ask of us, the more attractive their proposals will be.” On Monday, Purdue dropped out of the race due to insufficient financial support from the city. But for the winning institution the bid means cheap, pre-approved access to develop on prime real estate in a city that has no trouble attracting students.

Jockeying for position is in full swing. Cornell hired New York power lobbyist Suri Kasirer and retained a public relations firm, BerlinRosen, to handle its efforts. It’s also courting local techies by hosting events at the chic Flatiron incubator General Assembly and at Googleplex East. Others may feel Stanford’s a lock, but the university is still hedging its bets. A source familiar with the situation said Stanford reached out to senior staffers from the Department of Education in an “unprecedented” show of helpfulness to see whether they could be of service on things like college readiness programs.

TO LOCALS, THE SELECTION PROCESS leaves something to be desired. “It’s downright anti-N.Y.C. for the mayor’s office to consider helping an outsider come into N.Y.C. and a massive slap in the face of all the great institutions N.Y.C. has here already,” Fred Wilson wrote in an email to Betabeat. Mr. Wilson, a partner at Union Square Ventures and pater familias to the city’s growing tech scene, is not quite an unbiased onlooker: this summer he joined the board of N.Y.U. and its engineering school, N.Y.U.-Poly, which merged with the Polytechnic Institute in 2008, after surveying which institutions might have the most impact.

“It’s hard to say that it’s a slap in the face until we see who the ultimate winner or winners of the project are,” Mr. Pinsky responded by phone. (NYU-Poly is applying for the campus as part of a consortium including New York University, Carnegie Mellon, the City University of New York, the University of Toronto, and IBM.)

Nonetheless insiders acknowledge that incumbents are disadvantaged because the city is already intimately involved with existing expansion plans decades into the future, which didn’t involve anything on this scale. “Let’s say hypothetically, everyone turned in the exact same proposal, would we probably go with Stanford? Yes. Why? Because everyone turned in the same proposal and they have the best reputation,” said a source familiar with the decision-making process. “But we don’t know what they’re going to submit.” Such is the nature of the R.F.P. process, explained the source, wherein even the mayor’s excitement over attracting a school like Stanford is only a “small to medium plus” dependent on what the committee makes of the proposal.

The optics of the Taxi of Tomorrow bid going to a foreign carmaker like Nissan, for example, weren’t lost on city officials. “Procurement in city government is a weird and painful thing for everyone involved,” said the source. “It’s about the reality and the perception of fairness.”

According to Mr. Wilson, however, a number of New York schools, including N.Y.U.-Poly, are expanding their engineering efforts significantly. “It makes no sense to me when we have local institutions investing heavily that need all the help they can get,” he wrote, pointing to efforts like HackNY, a popular program out of N.Y.U and Columbia that encourages computer science students to consider start-ups, and InSITE, which does the same with Columbia and N.Y.U.’s business and law schools. The emphasis, he said, should be on the tech sector that’s already here.

“Too many people think we need a reboot in N.Y.C. when all we really need is a V.C. investment,” said Mr. Wilson.

Mr. Pinsky countered that the E.D.C. is encouraging those kind initiatives as well, by investing in start-up incubators like General Assembly and one run by N.Y.U.-Poly, as well as partnering in a $22 million venture capital fund with FirstMark Capital. After some grousing about the E.D.C.’s backing of the NYC Turing Fellowship Program, rather than the more grassroots HackNY, the city is now one of its sponsors as well. “People from the start-up world talk about how they’d spend that $100 million differently,” said a source, but that’s not how government works. “You have an iTunes gift card, you can buy some songs, maybe a movie … You can’t buy a toaster.”

THIS ARGUMENT TAPS INTO A NATIONAL DEBATE about innovation, explained Adam Friedman, director for the Pratt Center for Community Development. “How can you know how to innovate something unless you’re challenged with hard applied science questions, unless you’re actually engaged in producing something?” That alchemy of education and experimentation, with an eye to commercialization, is what Stanford is known for.

But Mr. Friedman seemed more skeptical about the notion of reseeding Silicon Valley culture in Manhattan. “The question it raises is if [a technology sector] doesn’t exist on the scale they want it to exist, are there other reasons? Or is it really the case that New York’s economy is just different? You can’t just drop something in.”

The E.D.C. claims its approach will stick precisely because it will be grafted onto the existing economy. “In a lot of other places where an attempt to replicate Silicon Valley has been made there’s no foundation on which they’re growing,” Mr. Pinsky said. Cornell’s proposal, for example, calls for evolving interdisciplinary hubs that focus on where New York’s strengths are (the mobile social space, for instance) and where they think they are going (health informatics). Stanford imagines pairing students with strong technical knowledge “with people in finance to see what needs can be met,” said Lisa Lapin, assistant vice president of university communications.

But the success of the initiative won’t be dependent on the school alone. Jonathan Bowles, director of the Center for an Urban Future, pointed to one of Mayor Bloomberg’s first projects of this kind—an attempt to augment the biotech sector. While that kind of research is robust in New York, Mr. Pinsky acknowledged the city has had trouble retaining the companies that spin out.

“In some ways it’s what kind of climate will New York create that is friendly for businesses and start-ups to stay,” said Stanford’s Ms. Lapin, using the example of Facebook, which has moved from a rental house to five or six downtown buildings to Stanford’s Research Park, all within Palo Alto.

Mr. Bowles thinks the city’s initiatives will solve that problem. “Real estate prices here are really no higher than they are in Cambridge or Silicon Valley. People will pay a premium to be in those places because there are a critical mass of entrepreneurs and investors.” It’s been remarkably easy to rally the city around that vision. “It’s rare that you find an economic development project that so many people are talking about and it has incredible buzz,” he added.

City councilmember Jessica Lappin, whose district includes Roosevelt Island, said that, compared with the “cockamamie schemes thrown out through the years,” like a big box store and a housing project, it’s been easy to galvanize community elders around the plan.

“When you think about it, what’s the next closest thing, like the Javits Center? This dwarfs the Javits Center,” said Mr. Friedman.

“What about a stadium?” Betabeat volunteered.

“Oh, we’re not going there,” he said. “Are we? I dare you.”

ntiku@observer.com

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