Yelp is on the Way!

Such has been the mayor’s plans in transforming New York City into “Silicon Alley.” Should the city follow its “Digital Road Map,” the city’s comprehensive strategy unveiled in May, New York is expected to become one of the country’s leading digital cities by 2014.

The city appears to be heading toward its target.

Tumblr is here and growing. Foursquare, fresh from picking up $50 million in funding this summer, will move into two top floors at 568 Broadway. Foursquare’s soon-to-be new neighbors include ZocDoc, which has $75 million in Goldman Sachs funding, and Digital Sky Technologies, a Facebook investor. The other big players—Twitter, Mashable, Google and Zynga, for example—already occupy space throughout the city.

“The talent pool is in New York, so it is a question of how we can bring more people into New York and keep it thriving,” said Mr. Coffey.

Despite the feel-good nature of Yelp’s arrival—the city inches closer to fulfilling its “Digital Road Map,” landlords get fun and exciting tenants and New Yorkers get a burgeoning job market—at the end of the day, little is known about how successful Yelp will be in New York City.

Yet it doesn’t matter. When a building already has Apple and Net-a-Porter as tenants, a landlord like Kaufman can take chances on smaller firms like Yelp.

The landlords—and Yelp—safeguarded themselves by building the new office as a generic office, beer taps not included, said a person familiar with the new office space.

“If [Yelp] goes out, they built a generic space and [Kaufman] can recycle it to the next tenant,” said the person, who spoke on the condition of anonymity. “Spend the money once. The second time around all they do is change the paint and carpeting … it’s worth the risk.”

And if Yelp thrives and grows and takes on additional office space, it will be a coup for Kaufman.
“If you establish a relationship with a tech company [like Yelp] early, you can have this in your portfolio for many years,” said a city official, who declined to give his name.

Yelp is paying approximately $50 per square foot for the space, according to a person close to the negotiations. The asking rent was $55 per square foot.

The length of Yelp’s lease is “short-term,” although its exact length was not immediately revealed.
drosen@observer.com