Week of August 2, 2004
from Site Selection's exclusive New Plant database
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Will Add 200 Jobs
by JACK LYNE, Site Selection Executive Editor of Interactive Publishing
NEW YORK Cantor Fitzgerald (www.cantor.com), which suffered the most devastating corporate casualties on 9/11/01, has picked a permanent new headquarters home in New York City.
The prominent bond-trading company and eSpeed (www.espeed.com), its electronic- trading subsidiary, on July 26th jointly signed a 16-year lease on 125,000 sq. ft. (11,250 sq. m.) of Midtown Manhattan space. The new headquarters will be located in the 110 East 59th St. building thatís now the headquarters of the Bloomberg L.P. media empire. (Financial terms of the lease agreement havenít been released.)
Coming almost three years after the terrorist attacks, the Cantor Fitzgerald deal is being facilitated by more than US$30 million in federal, state and local incentives.
Cantor lost 658 employees whoíd begun their work day on 9/11. That was more than 60 percent of the companyís entire work force. ESpeed also suffered heavy casualties, losing 180 employees. Cantor and eSpeed at the time occupied 250,000 sq. ft. (22,500 sq. m.) on the 101st through 105th floors of the World Trade Centerís 110-story north tower. The first jetliner hijacked on 9/11 hit near the top of that structure.
The company has set up temporary headquarters in two different Midtown buildings while searching for a permanent address. The move to 110 East 59th will facilitate Cantorís adding 200 new jobs to its current 618-employee work force, said Howard Lutnick, the companyís chairman and chief executive.
This is a milestone in completing our rebuilding process, he said. It puts the rebuilding of the firm behind us, and allows us to now feel that weíre going forward with expansion and growth.
Lutnickís brother Gary was among the Cantor employees killed on 9/11. Howard Lutnick happened to be away from work that day, taking the morning off to accompany his son to the first day of kindergarten.
New Site Supplies High-GradeCantor considered 70 locations during a two-and-a-half-year search before picking its headquarters site, according to officials with Cushman & Wakefield (www.cushwake.com), which served as the companyís broker. The 110 East 59th property provides the company with a tony Manhattan address that matches its prestige within the financial industry.
Telecom in Low-Altitude Space
More importantly, the site gives employees something they very much wanted: a low-altitude location. Cantor is leasing floors two through seven in the 59th Street building, as well as part of the first floor. The companyís lease also includes an option to take 20 to 30 percent more space if needed. The new headquarters includes a staircase thatís well inside the building not on the periphery, as was the case at the WTC.
In addition, the 110 East 59th building supplies Cantor with the high-powered telecommunications infrastructure that it needs. Along with a well-thought-out disaster plan, the companyís technological expertise helped it survive a staggering loss that wouldíve destroyed most firms.
Cantor has not only survived; itís now turning record profits. That success has enabled Cantor to provide $140 million through June 30th to the families of its employees lost on 9/11. The company is donating 25 percent of its profits to those survivors for five years. Cantor is also paying for the familiesí health-care insurance for 10 years.
The company is working with the Guggenheim Museum to design an appropriate monument in the plaza outside its headquarters site.
Cantorís Mirror Site, Outside HelpOur success over the past nearly three years is due in no small part to the dedication and resolve of each of our employees, whose hard work has made this announcement possible, said Lutnick, who personally donated $1 million to the Cantor Fitzgerald Relief Fund (www.cantorusa.com).
Put It Back in Business in 47 Hours
Perhaps the most critical steps in the companyís comeback came immediately after the attacks. Somewhat miraculously, Cantor and eSpeed managed to be back up and running when the New York bond market reopened at 8 on the morning of Sept. 13 not yet 48 hours after 9/11ís attacks.
One key recovery element was the mirror site that Cantor had established at its data center in Rochelle Park, N.J. The New Jersey operation replicated all of the machines, connections and functionality inside the companyís WTC headquarters.
Another key element was Cantorís surviving headquarters employees. With the companyís three-shift, round-the-clock schedule, some Cantor employees werenít scheduled to work at the time of 9/11ís attacks. Others were on vacation. (Or just incredibly lucky: One senior technological worker, for example, was slightly late leaving for work after making a quick grocery run for cake ingredients. His wife that morning had burned their daughterís entry for a school bake sale.)
Consequently, Cantor still had a surviving headquarters work force of some 300 employees, many from the information-technology staff.
Those workers feverishly rerouted connections, sending many through the companyís London office. Employees also called customers to advise them on reconfiguring their servers to access the London office, and they expanded customer access to eSpeedís network.
Cantor got critical help as well from other companies, including competitors, vendors and other financial firms.
One of the biggest assists came from rival electronic trading company ICI/ADP (www.iciadp.com). While eSpeedís IT staff was able to restore many trading system applications, it couldnít resuscitate the system for settling transactions which wouldíve made reopening for business impossible. Thatís when ICI/ADP stepped in. It volunteered to clear and settle eSpeedís transactions through ICI/ADPís connections to banking institutions.
Another financial player that stepped up big for Cantor/eSpeed was UBS PaineWebber (www.ubs.com), which provided free temporary office space in Manhattan.
Two Other HQ Deals Fell ThroughUBS PaineWebberís space and the Rochelle Park center were the first of Cantorís temporary homes.
The company later took Midtown space at a building at 299 Park Ave. After than, Cantor moved again to a facility at 135 E. 57th Street, near its new permanent headquarters.
We are excited about our decision to re-establish our global headquarters in New York City in the neighborhood that has served as our temporary headquarters for the past two years, said Lutnick.
The company will begin fitting out its new home during the fourth quarter of this year, starting move-in during 2005ís first quarter, Lutnick explained. Bloomberg is scheduled to begin its move to a new headquarters early next year.
Cantorís decision ends long-running speculation about where the company would relocate. After 9/11, Lutnick vowed that his company would never again set up its headquarters in Lower Manhattan or in a skyscraper. That resolution, though, seems to have come into question during the site search.
A year after the terrorist attacks, Cantor reportedly wanted to spend as much as $100 million in renovating 170,000 sq. ft. (15,300 sq. m.) in a Midtown building near Union Square. But that deal fell through.
So, too, did the plan to move to a Lower Manhattan site at 10 Hanover Square that Goldman Sachs had vacated. According to state officials, that deal disintegrated after Lutnick wanted an additional $12 million in city incentives for the Lower Manhattan relocation.
Cantorís new headquarters incentives include a $23.5-million grant from the federal governmentís Disproportionate Loss of Workforce Program. The company lobbied before Congress in 2002 for the appropriation. Empire State Development Corp. (www.nylovesbiz.com ) is administering the federal program in New York State.
Cantor is receiving another $6-million federal grant from a program to create and retain jobs in post-9/11 Manhattan. In addition, Empire State Development gave the company a $1.4-million grant in late 2003 in exchange for Cantorís commitment to maintain the 393 jobs that the company then had in the city.
Cantor could receive $4.6 million more from the state in 2008 if it has created 580 new jobs. And that certainly looks like a real possibility, given Cantorís remarkable rebound.
©2004 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.