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Big City Dreams

September 1, 2011

It's not every day that the mayor of New York City asks universities if they want cheap land in one of the most expensive real estate markets in the country to develop a new campus.

So when Mayor Michael Bloomberg tested the waters with a statement this spring, institutions chomped at the bit. Since the city issued a formal request in July, several major research universities, both in the U.S. and abroad, have devoted significant resources to developing proposals for the chance to open a new campus focused on graduate degree programs and research in engineering, entrepreneurship, and technology transfer in the heart of New York City.

City officials -- particularly Bloomberg -- see the campus as a tool to spur job creation and economic development in an economic sector for which New York is not well known. University officials see the new campus as a rare opportunity to get their feet in the door of or expand their presence in a major metropolitan area that has become a magnet for top talent.

Beyond the immediate benefits to the university eventually selected and the city, the mayor’s plan and the investment in university research by city hall are a statement of support for the idea that research universities can be economic drivers in local economies, an idea that many politicians and university officials cite but on which few act. "It’s a vote of confidence in the health of the American research university and the capacity institutions have to make a significant economic impact,” said Lisa Lapin, spokeswoman for Stanford University, one of the universities expected to submit a proposal.

Another New York Campus

New York City has no shortage of colleges and universities. With about 110 institutions serving more than 600,000 students, the city has one of the highest concentrations of students in the country.

What it doesn't have is a reputation as a destination for developing and attracting high tech industries. The city has several engineering schools, including Columbia’s Fu Foundation School of Engineering and Applied Science and the Polytechnic Institute of New York University, though these schools tend not to top rankings. "During the 1980s and '90s, Silicon Valley – not New York – became the world capital of technology start-ups," Bloomberg said in a July speech announcing the request for proposals. "And that is still true today. But if I am right – and if we succeed in this mission – it won’t be forever.”

In talking about the initiative, Bloomberg has repeatedly said that New York needs to focus on developing companies and entrepreneurs involved in emerging sectors of the economy such as information technology. "Technology is critical to our growth -- and there is just not enough of it here,” Bloomberg said in his July speech.

That is why the city is pursuing the new campus. Officials say they want a university with a track record of churning out patents and companies to develop a research and graduate education campus, particularly one focused on engineering, chemistry, physics, environmental science, and/or computer science. Officials said they are less interested in other sectors, such as biotechnology, because the city already has strong representation in those fields.

In exchange for investing in a campus in New York, officials said the city is willing to provide land in one of three sites -- Roosevelt Island, Governors Island, and the Brooklyn Navy Yard -- and up to $100 million in infrastructure improvements. Several officials at universities interested in the city's proposal say the combination of land and investment makes the competition a "once in a lifetime" opportunity.

The New York City Economic Development Corporation, a nonprofit organization overseen by city hall that works on metropolitan improvement initiatives, is overseeing the selection of the partner. The corporation has recruited an advisory panel to consult on the selection of which institution to pair with, and the final decision rests with the Bloomberg administration.

The development corporation's goal, said Seth W. Pinsky, its president, is to grow the chunk of New York's economy generated through technology to a level that it is commensurate with the overall economy.

Who's Biting?

When the development corporation put out its first request for expressions of interest last winter, 27 universities threw their hats in the ring either individually or as part of a consortium. That list included several universities based in New York, including Columbia University and New York University; several prominent U.S. universities, including Stanford University, Cornell University, and the University of Chicago; and several foreign institutions, including Technion – Israel Institute of Technology and the Korea Advanced Institute of Science and Technology.

In July, the city made a request for proposals from the 27 universities that expressed interest in the first round, as well as any university that met a set of criteria that included high rankings in engineering programs, an endowment of at least $1 billion, and a track record of spending a minimum of $75 million dollars annually on research in fields related to the proposed program. On the same day, both Cornell and Stanford announced that they would pursue the campus.

Since announcing their interest, Cornell and Stanford have been the most public about their intended plans if they secure the site and the city's value as a strategic location for expansion.

Administrators at Stanford said the city's request for an institution with a strong focus in technology and a history of developing companies is right up their alley. The university is credited with the development of Silicon Valley -- the only area of the country that receives more venture capital for technology start-ups than New York City -- and has a history of churning out companies based on student and faculty research, such as Hewlett-Packard, Google, Sun Microsystems, and others.

"This plays exactly to our strength as an entrepreneurial university with a culture of innovation and strength in applied sciences and engineering,” Lapin said. "We can bring the expertise that they’re seeking.”

Stanford's vision is to develop the property on Roosevelt Island into a campus of about 100 faculty members and 2,200 graduate students. The initial campus would focus on information technology, entrepreneurship education and research, and executive education in technical fields.

If Stanford were to secure the spot, it would be opening its first full-fledged campus outside of Palo Alto. “While we are engaged as consultants and partners with a number of institutions around the world, we have so far chosen not set up another full-fledged campus primarily because we were concerned that we could not establish a permanent presence with a cohort of faculty and students whose quality matched that of our own campus,” said Stanford University President John Hennessy in his annual university address in April. “But New York is different. We can attract great faculty and great students committed to Stanford to a New York campus."

Cornell administrators also envision a full-fledged campus on Roosevelt Island with programs in areas similar to those proposed by Stanford, though they hope to develop their research endeavors in hubs that focus on particular topics, such as mobile and social computing. These hubs would pull faculty from traditional departments, but unlike traditional departments, they would have a lifespan of decades rather than centuries.

The university already has an established presence in New York City, which is home to the university's medical center, and Dan Huttenlocher, dean of the faculty of computing and information science, said administrators view expansion into New York City as an important component of Cornell's strategy moving forward. "What the city's offering is a site to build a campus and the chance to accelerate in a strategic direction that we were already heading [in]," he said.

While Cornell and Stanford have been the most public about their plans for the New York City campus, other institutions say they are still considering the idea.

A spokesman for New York University said the institution will submit a proposal as part of a consortium that includes several universities and a corporate partner. Their plan focuses on developing a center that focuses on urban science and ideas to improve city life. While different in nature than the programs proposed by Cornell and Stanford, administrators said the center will stress the commercialization of research while furthering the universities' research strengths.

A spokesman for Columbia said the university is planning to respond to the city's request, but would not elaborate on the details. "Our response to the city's [request for proposals] will focus on opportunities that are consistent with our commitment to long-term academic and economic growth in Upper Manhattan,” said Robert Hornsby, assistant vice president for media relations, in an e-mail.

A spokesman for the University of Chicago, which submitted a statement of interest during the first round, said the university was not planning to submit a proposal.

'A Significant Investment'

Universities pursuing the campus must put together a weighty proposal before the Oct. 28 deadline. Administrators from Stanford and Cornell said they have devoted personnel time to the project, brought in outside help to review legal issues and help them understand the development market in New York, and begun crafting responses to the city that will likely total hundreds of pages. Neither university was willing to say how much the development of its proposal will cost.

A spokeswoman for Cornell said administrators have regularly traveled between the university's main campus in Ithaca and the city to work on the proposal. Lapin from Stanford visited Roosevelt Island this week.

The institution that secures the city's blessing will likely have to make a substantial investment to get the campus off the ground. Unlike many branch campuses abroad, where foreign governments have picked up the tab for infrastructure and construction, the city views its investment as seed money, and does not want to underwrite the campus. "We have been clear that that is not our intention," Pinsky said. "The less they ask of us, the more attractive their proposals will be. That being said, we are willing to make an investment if it will show returns."

The city is asking for a first phase of at least 250,000 square feet and a final build out of a million square feet, which could easily end up costing the university billions of dollars.

But the large investments made by Stanford, Cornell, and other institutions competing for the city's space and resources indicate that officials think there is a significant advantage to being in New York City. Administrators cited the attractiveness of the city to students and faculty, the international connections available to institutions in the city, and the substantial business and cultural resources located there.

The city's economic impact study predicted that in the first 30 years, the campus would generate about 400 companies and create more than 7,000 construction jobs and more than 22,000 permanent jobs. Those jobs will likely increase the city's tax revenue by hundreds of millions of dollars, as well as support the local economy. "But most importantly," Bloomberg said, "the new campus will help us build a critical mass toward our ultimate goal: reclaiming our title as the world capital of technological innovation."

 

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