Alphabet, the parent company of online search giant Google, has closed a deal to acquire Chelsea Market at a price of $2.4 billion. The real estate deal will expand the presence of the tech giant in New York City. Chelsea Market consists of 1.19 million square feet and this includes a food hall and ground floor shopping.
The deal is a major win for Jamestown LP, an asset manager, which had acquired a stake of 75% of Chelsea Market in 2003 at a price of $280 million. Per media reports the asset manager bought out the rest of the stake seven years ago in a deal which valued the property at $795 million.
Google’s new building in the Big Apple is adjacent to the company’s New York headquarters which it acquired eight years ago at a price of $1.77 billion. Jamestown developed the building with help from Taconic Partners.According to Michael Phillips, the president of Jamestown, the deal is an indication that New York is an innovation hub as well as a startup incubator. In the city the online search giant has also leased space giving the company a four-block campus.
This comes in the wake of a proposal by the European Union to have Google and other tech firms such as Amazon and Facebook to pay a tax of 3% for making money from digital advertising or data obtained from users in a country without taking into account brick-and-mortar presence. The proposed tax could also eventually apply to other online marketplace platforms such as Uber and Airbnb.
Currently tech firms are taxed based on the profits generated in the country where they have their headquarters. Some of the companies have consequently set up headquarters in countries which offer lower tax rates in order to take advantage of this. Leaders of the European Union are expected to discuss the proposal in a summit which will be held this week.
Among the countries strongly pushing for a kind of digital tax is France. Not all countries in the European Union are for the digital tax however. Smaller countries that include Estonia, Luxembourg and Ireland for instance fear that such a tax would give bigger countries an advantage over them.
The European Commission has also had to refute claims that the proposal was aimed at U.S. firms.
“This is not an anti-American tax, this is not an anti-Gafa tax, this is a digital tax,” EU’s tax commissioner, Pierre Moscovici, said.