Dotcom Hither

Silicon Alley Looks to Expand in Bloods' Long Island City

But attracting more businesses could mean launching rents skyward. One hundred feet south of Queens Plaza is the office of Greiner-Maltz Realty Co., Inc., which claims to be the largest and oldest exclusively commercial and industrial real estate firm on Long Island—Brooklyn and Queens included. Chairman Dick Maltz says that with different types of businesses crowding in, some will have to go—and he doesn't think it's the digerati.

"The strip clubs will eventually get priced out or bought out," he says. Teched-up Long Island City buildings command rents of around $25 per square foot, about half that of some Midtown and Silicon Alley rates. City-sponsored breaks can knock that down to $19 a square foot.

Maltz says that "everything's coming up roses" in Queens Plaza, but he's skeptical the area will transform itself solely through the conversion of old buildings. The physical surroundings, he says, just aren't flashy enough. "High-tech types are looking for something stylish and trendy. Something with views, or something quaint with open, bright spaces and amenities."

Your high-tech business here? Up-and-coming Long Island City.
Hiroyuki Ito
Your high-tech business here? Up-and-coming Long Island City.

Bens Lee, a technology entrepreneur around the corner from NetCom Information Technology, learned about those desires the hard way. He's the CEO of Control Technologies, a military electronics maker with a staff of six, and the head of A-Web Internet Services, which has a staff of 10. Hedging his bets on war, he's also got a start-up called Lee lives in Queens, so for his convenience, and to trim the company budget, he moved his A-Web staff to Long Island City from Tribeca two years ago. His employees weren't pleased.

"For a long time people were complaining," he says. "Even though a lot of them live in Brooklyn, they were upset because they like to go to dinner at a nice café after work and to be in the city excitement."

And having clients drop in isn't what it used to be. "I had a potential client coming for an appointment and he was driving in circles after he got off the Queensboro Bridge," Lee says. "He couldn't find my block and finally told me from his cell phone, 'Are you sure you didn't say Wrong Island City?' "

That client could have been a man like Jeffrey Wolf, president of the Silicon Alley capital firm Seed-One Ventures. Wolf is also the CEO of SensaTex Inc., a Silicon Alley start-up that will make Smart Shirts to monitor and transmit wearers' physiological data. SensaTex won't be making them near Queens Plaza anytime soon.

"Where is Long Island City?" Wolf says. "I wouldn't be able to find it on a map, so it's an inconvenient forum. My employees and business associates are in Manhattan. We don't need tax breaks or subsidies. Using those incentives you could say, 'Why don't I move to North Dakota?' Location doesn't mean everything, but it sure means a lot."

For now, Long Island City just isn't a place to schmooze.

Maltz looks three blocks south to the 50-story glass-sheathed Citibank tower for inspiration. The Citibank building has stood freakishly out of place since an economic downturn followed its completion in 1989. Local residents have dubbed it "the Death Star," because, like the imperial satellite in Star Wars, it looms as a reminder of power—in this case, power of the corporate Manhattan flavor. For real estate agents like Maltz, filling a building with one blockbuster tenant is much easier than cobbling together arrangements with dozens of small but finicky start-ups.

Maltz may soon have the chance to broker plenty of those single-tenant deals, in the process changing the Long Island City skyline forever. Queens Plaza may be rezoned to allow developers to build office towers where two-story shops stand today.

What's more, rumors have surfaced that a new transportation hub, a sort of junior to Pennsylvania Station, might be built at Amtrak's adjacent Sunnyside maintenance yards sometime in the next 15 years. Some speculate it could tie together the Long Island Rail Road, Amtrak, New Jersey Transit, and the six Queens Plaza and Queensboro Plaza subway lines. An informed source says an even bolder proposal calls for the construction of "something like a whole new city" in the airspace above the rails. Amtrak is already building an LIRR station at Sunnyside to tie together Long Island and the eastern half of Manhattan in 2011. It produced a report in 1991 that in some ways favored a new station, but the idea languished until the recent growth spurt.

Transportation is a key factor mentioned by many of the transplants. It's often cited as the factor that beats out other Digital NYC sites in Harlem, the Bronx, Staten Island, and Brooklyn, as well as the ceaseless wooing by New Jersey's thriving Hudson River cities.

PSINet has a lower Manhattan plant with the hardware needed to maintain e-commerce. But as the company grew, it plunked down a new space in Long Island City because "you hop on the bridge and boom!" says senior vice president Robert Leahy. "You're there. I know theoretically your server could be in Guam or Arizona, but people like to see their equipment. And we want to be near the center of the commercial universe."

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