Border Crossing: New York-Based ISO
Relocating 1,400-Employee HQ in New Jersey
In a major salvo in the ongoing global business incentive wars between adjoining areas, Insurance Services Office Inc. (ISO at www.iso.com) has announced that it's moving its headquarters to New Jersey from New York. The announcement means that more than 1,400 New York- and New Jersey-based ISO employees will relocate in the information clearinghouse's new high-rise home office in New Jersey, said Gualberto "Gil" Medina, chief executive officer and secretary of the New Jersey Commerce and Economic Growth Commission (www.state.nj.us/commerce/).
Insurance Services Office will leave its current base at New York's World Trade Center in the first half of 2001 to occupy 394,000 sq. ft. (35,460 sq. m.) of space in a 22-story waterfront tower in Jersey City, company officials said. All told, 1,400 employees from five ISO sites will be relocating inside the New Jersey operational base. Roughly 1,300 of those workers are currently based in New York, ISO officials explained.
Of the 1,400 relocating employees, 770 are presently working at ISO's current headquarters in New York City's World Trade Center, company officials said. Another 500 employees from ISO's Pearl River facility in upstate New York will also relocate to the New Jersey headquarters. The remainder of the employees who'll move to the 22-story New Jersey center will be drawn from two New York sites in Manhattan and one site in Rahway, N.J.
In making the move, ISO will receive a state Business Employment Incentive Program (BEIP) grant that's worth nearly US$12 million over a 10-year period, company officials say. Companies creating new jobs in New Jersey may be eligible to receive a BEIP grant for up to 10 years, state economic development officials explained. The grant can equal from 10 percent to 80 percent of the total amount of state income taxes withheld from newly created jobs. Businesses establishing jobs in targeted metropolitan municipalities are eligible for the grant with as few as 25 new jobs. According to New Jersey economic development officials, BEIP grants over the last three years have generated more than 39,000 jobs, with more than 160 companies making a total capital investment of $4.6 billion. But ISO Chairman and CEO Fred R. Marcon said the bigger relocation issue was the new location's cost-effective capacity for consolidating at one single location operations presently dispersed in five separate locations.
"This is an exciting step for our company," Marcon said. "New Jersey has made it possible for us to enhance the productivity of our operations by consolidating various components under one roof, while significantly reducing our costs."
According to ISO officials' estimates, consolidating operations in Jersey City will enable the company to realize a cash savings of $6 million in rent per year, a total savings of $120 million through 2020.
Other factors that will reduce ISO's costs in New Jersey, state economic development officials added, include state skill-training grants for ISO's New Jersey-based work force, lower unemployment insurance costs, and tax credits for additional local employees who are hired. New Jersey's lack of an occupancy tax will also save ISO "millions of dollars in the years to come," state officials asserted.
New Jersey Gov. Christine Todd Whitman (www.state.nj.us/governor) greeted the announcement by saying she was "delighted that Insurance Services Office has seen the benefits of relocating to New Jersey, as other companies have.
"The business environment we have been fostering is one that is highly supportive of business and statewide economic development," Whitman continued. "We have removed barriers to economic growth by lowering taxes, lessening regulation, and putting in place a broad range of incentives that have transformed New Jersey into a most desirable business address."
Secretary Medina echoed the upbeat mood among New Jersey economic development officials.
"The company's decision is a reflection of our efforts to showcase New Jersey's advantages through innovative incentives and financing programs," Medina said. "Through these programs, more and more companies are choosing New Jersey, and creating new jobs," Medina continued. "In fact, since Gov. Whitman took office in 1994, we've added more than 400,000 jobs to New Jersey's work force."
ISO's announcement came soon after Gov. Whitman released the 1998 New Jersey Commerce and Economic Growth Commission Relocation Report.
According to that report, 116 companies relocated to New Jersey in 1998, creating more than 10,500 jobs. Those are the highest totals that the report has recorded since its inception in 1984, Whitman said.
More than half of 1998's relocated jobs will be in the state's metropolitan areas, she added. Obviously, totals for 1999's New Jersey Relocation Report will get a big boost from the ISO deal.