(NEW YORK, NY) — Why did New York pay more than Virginia for Amazon? In an interesting piece by Crain’s, that question is unpacked.
And, while the obvious answer is that New York is expensive, there’s another strong factor, high construction costs.
Amazon will undoubtedly use union labor since it is safer and produces better quality work than non-union hires.
In New York, land costs are 10 times more expensive than anywhere else, and the hard costs of construction represent around 40 percent of development costs, according to Crain’s. The piece also discloses that insurance costs $33-$41 per square foot, more than triple the price in other states.
What are some ways to cut construction costs? It is important to take into account that New York City has the highest workers’ compensation rates in the country. It also important to note that construction-insurance costs could be lowered if the Scaffold Law was dismissed.
Despite the propositions, one thing is for certain. Amazon is here and construction is expected to be on the verge of completion by 2020.