new tech city

New York City Business Leaders Cough Up $20M. Toward the Development of Urban ‘Work-Live’ Campuses

"A good model is Las Vegas." Always.
Move across that bridge and we can't promise Internet. (flickr.com/ugod)

Bright lights, big city. (flickr.com/ugod)

As Mayor Bloomberg nears the mile marker for his exit, the rest of the city is starting to chatter about what we’re supposed to do now. In December, Manhattan Borough President Scott Stringer released a report asking what the tech boom has done for New York’s working class. But the suits are getting in on the act, too: Today the Partnership for NYC released the NYC Jobs Blueprint, a report chock full of recs for the next mayor.

Most relevant to the tech biz: The Partnership Fund, the organization’s investment arm, is willing to pony up $20 million for an urban tech campus providing “flexible, affordable live-work spaces for the next generation of young professionals.”

The engineers of the future will never get to leave their desks!

The Partnership is a nonprofit “representing leaders of New York City’s corporate, investment and entrepreneurial businesses.” The board includes the familiar face of Kevin Ryan, but co-chairs include Terry Lundgren, CEO of Macy’s and Laurence Fink, CEO of BlackRock. So it’s a relatively corporate bunch, but the report shows startups love.

One of the big concerns outlined: The struggle to scale. The report points out, “Although the city is a hotbed of digital startups, few young companies are scaling up to more than 30 or 40 jobs in the city.” Unsurprisingly for an organization run by business types, the report cites the costs associated with starting a business–1.5 times the national average, with rent and electricity twice the national average. And so:

“Of the 220,000 businesses in the city, 195,000 or 88%, have fewer than 20 employees.90 Between 2003 and 2010, New York City experienced a 9% increase in the number of firms with one to four employees, but no net increase in the number of firms with 50 or more employees.”

Those are some disheartening numbers, though it’s probably too early to account for the current boom. But in the meantime, the organization is willing to put its money where its mouth is:

“The Partnership Fund is prepared to invest $20 million in the commercial component of a campus for entrepreneurs and tech startups. A good model is Las Vegas, where Zappos is leading development of a campus on the grounds of the old City Hall. The project will be anchored by the Zappos’ company headquarters and will include work-life integration with housing, education, and technology incubation.”

The ideal campus would “include vertical live-work communities and “flex” work space for the growing creative, tech, health and advanced manufacturing sectors.” The report recommends expanding the concept of “inclusionary zoning” to ” incentivize development of commercial and industrial space in mixed use zones that is affordable to growing companies.”

That sounds appealing until you start thinking about living near “industrial space.” $20 million doesn’t go very far, either, when you consider the potential costs of such a project, but it’s something, we suppose. Suggested sites include Downtown Brooklyn, as well as the Sunset Park and LIC waterfronts, the north shore of State Island and Port Morris and Eastchester in the Bronx. (No casinos required, apparently.)

The report also outlines a long-term threat, and that’s the erosion of middle-class jobs: “This is partly due to the rising cost of living—driven by the cost of housing—and partly to advances in globalization and automation that allow companies to either eliminate or easily move business support and other mid-level functions to lower cost locations. The consequences of this trend, if it accelerates, could be the destabilization of neighborhoods, weakening of the city’s labor pool, and further narrowing of the tax base.”

If that happens and the city hits the skids, those airy Soho lofts won’t be so appealing. Note the mention of automation, too–maybe give that a ponder the next time you look at an industry and think of all the ways you can disrupt it with robots and software.

Other recommendations include:

·       Create new public-private investment vehicles to finance necessary infrastructure improvements;
·       Found a permanent innovation advocacy organization comprised of the heads of leading universities, research institutions and innovation industries to drive policies and programs that advance New York’s status in the knowledge economy;
·       Establish industry-labor partnerships, along the lines of NYC & Co., to promote the growth of good jobs in key sectors;
·       Support key programs and policies that nurture the growth of startups into major, scalable employers and reverse the loss of middle class jobs.

The report also calls on the city to support the development of additional affordable lab space for the life-sciences sector and “champion diversity in the tech sector.”

Follow Kelly Faircloth on Twitter or via RSS. kfaircloth@observer.com