NJ Insiders: Newark’s Hot HQ2 Bid Did More than Changed the Narrative — It Confirmed What We Already Knew
by Josh Anderson
NEWARK, NJ — In many headlines, the story generally goes that Newark’s HQ2 bid (more specifically, the positive reaction from Amazon) turned around the narrative for the famous, but often struggling, city. But for many local Newark developers and insiders, it solidified what many already knew – that Newark has been ripe for a major breakthrough for quite awhile. This was the topic of discussion during the Special Luncheon Discussion: The Future of Newark from a Policy and Practical Point of View, Developer-Administration Point/Counterpoint at CapRE’s Newark Commercial Real Estate Summit in July.
Asked Moderator Ron Simoncini, President of Axiom Communications to panelist John Saraceno Jr., Co-Founder and Managing Principal of Onyx Equities, LLC. ”John you’re a recent entrant to the Newark market, with One Gateway,” he began. “But you were an observer here for a long time. What was it about the timing of all of this – did the Amazon HQ2 pitch have anything to do with your interest in Newark, or did that just solidify what you guys were going to do in terms of your development plan?”
“Being in New Jersey and being around commercial real estate for twenty-five or so years, we always looked at Newark,” replied Saraceno. “Actually I was sort of thinking through this before, and when One Gateway sold fifteen or twenty years ago, we were actually the second bid on that. So we had sort of toured it and explored the idea. It never really fit into a particular sort of investment philosophy at the time. It just never happened.”
However, Saraceno definitely thinks that the Amazon HQ2 bid had a compounding effect on the conversation, and therefore decisions. “When a company that big identifies an area like Newark New Jersey as a [member of a] Top-20 list (and if the rumors and the stories are correct, it is actually high on that Top-20 list), well if you don’t follow that news, then you’re asleep at the switch. And we like to think that we’re not. It was clearly validation for Newark as a whole.”
As for the special ingredient that turned Amazon’s eye? “I think that it’s not any one thing,” he asserted. “You could look back as far as the Prudential Center. We’ve seen things in pieces over the last 15-20 years that continue to sort of stack the sticks on top of the camel, but none of them have broke its back. It’s sort of allowed Newark to be considered differently. In my personal view, Amazon gave validation to a wider array of people that otherwise would not have considered it.”
“This has sort of allowed us, both from the standpoint of the comfort of institutional advisors and investors, as well as, how to bring it to a community, because that’s how we do business,” he shared. “That’s a great validation for us, if you’re an institutional equity source, and I’m bringing Newark to them and they say, oh they’re bringing Amazon! That wasn’t the conversation they had with me ten years ago. The conversation was a whole lot different than it was today. So the Amazon HQ2 bid helped.”
Saraceno then shared how it not only helped to change the perception from outside Newark, but also for many within. ”With the city did and what amazon did with regard to the Pitch Book and how they presented it, it was enlightening,” he explained. “It always confounds me that that doesn’t happen more often, and that there isn’t more interaction on both the municipal levels and the city levels, to attract companies. And what goes into that process, if you take the time to read the Amazon pitch, that Newark did, the surrounding information is enlightening, to say the least. I was in the business for twenty-five years, and over half of it was stunning to me. And I thought I knew what the hell I was doing. So Amazon is a big piece of what is going on here.”
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