On the very same day that Amazon.com Inc. announced that Long Island City, New York, would be half of its new headquarters, Goldman Sachs signed a massive real estate deal less than a mile away, Bloomberg reports.
The timing was an “absolute coincidence,” said Margaret Anadu, the head of Goldman Sachs’s Urban Investment Group, who was the real estate transaction coordinator on the $83 million apartment complex deal, in Hunter’s Point South. “I didn’t think New York was in the running, much less Long Island City.”
For years, Goldman’s Urban Investment Group has been investing in communities across the US, supporting a wide variety of development and revitalization projects after decades of deindustrialization. At least that’s its mission statement. What it is really doing is pursuing tax breaks anywhere it can get them.
The group explicitly targets low-income areas in cities designated as “opportunity zones.” Wall Street firms and accredited investors that construct buildings in those areas can defer taxes on past capital gains, and avoid them on the future profits from their projects, said Bloomberg. And, as we learned thanks to Amazon’s HQ2 decision, much of Long Island City resides in such a zone.
The project, being built by the Gotham Organization, a real estate development firm with close ties to Goldman, will fund the construction project to produce more than 1,000 units, with 80% designated for affordable housing.
“When this massive development is done, it’ll be one of the largest affordable housing communities in New York City’s history,” Anadu said.
Amazon has not even moved in yet, but the area is already seeing a big surge of interest. In the weeks following the announcement, the Queens waterfront neighborhood, lined with condo towers, had experienced growing demand in an already hot market.
An influx of 25,000 new Amazon employees could mean that Goldman’s massive new apartment building is the big winner.
So another “lucky coincidence”, or did Goldman uncoincidentally get a several months’ head start on Amazon’s “secret” move? You decide.
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