Incentives Deal of the Month
from Site Selection's exclusive New Plant database
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New York-Metro Shuffle
The financial-services powerhouse is
sending 3,500 back-office jobs to New Jersey
and Queens from Lower Manhattan where
Citigroup plans to backfill with 2,500 new front-office jobs.
LYNE, Site Selection Executive
NEW YORK Citigroupís
expansion planning team mustíve burned loads of midnight oil
lately: In a sweeping reorganization of its New
York-metro portfolio, the financial-services giant last week
announced that it will relocate 3,500 existing back-office jobs while
creating 3,150 new ones most of them front-office positions.
By the time New York Mayor Michael Bloomberg (R) and New Jersey Gov. James E. McGreevey (D) held separate press conferences announcing the projects, they both were well aware of where Citigroupís jobs were headed. But neither mentioned their rival neighboring state by name until prodded by questions.
Citigroup chose to send its biggest corporate guns to the announcement in Long Island City. The company will house 1,600 of the employees itís relocating in Court Square Two, a $200-million, 14-story office tower that it will begin building next year, Citigroup President Robert Willumstad explained.
The new 475,000-sq.-ft. (42,750-sq.-m.) facility will sit across the street from Court Square One, the 48-story tower that the company built there in 1989. Adding the new tower in Long Island City will more effectively consolidate Citigroupís back-office positions, Willumstad said. Another 300 back-office jobs now in Manhattan will be transferred to Melville, N.Y., 30 miles (48 kilometers) east of Long Island City.
In addition to constructing Court Square Two, Citigroup will fund an upgrade of the local subway connection to accommodate the large influx of new jobs. The company will pay to have an escalator installed connecting the G and Number 7 lines. That escalator will enable passengers to walk underground between those lines, rather than having to walk outside as they do now. The Court Square station is only one subway stop from Citigroupís Manhattan headquarters.
The New Jersey relocation actually means an increase of Citigroupís head count in its home city, company officials emphasized at the announcement.
We are excited about our plans to continue growing in New York City, said CEO Charles Prince. We are the largest private-sector employer in New York City, and we expect to add even more jobs here over the next two years.
Added Willumstad, We have grown in New York City, and we are continuing our growth story here. We are not giving up space in Lower Manhattan.
Citigroup, he continued, plans to add 420,000 sq. ft. (37,800 sq. m.) to its current 9.3 million sq. ft. (171,000 sq. m.) in Manhattan to house the new growth there.
Later, Willumstad was asked if he saw any potential obstacles to the companyís adding 2,500 new front-office jobs in Manhattan in the next two years.
Thatís not been our problem, replied Willumstad, citing Citigroupís 2003 annual sales of some
Bloomberg: ĎA Good TrendíBloomberg similarly characterized Citigroupís reorganization as good news for New York City. If the company hits its Manhattan hiring projections, the city will realize a net gain of 600 higher-end jobs, he pointed out.
Yes, some jobs are going to New Jersey, but more jobs are coming here, and thatís the trend that you want, said Bloomberg. Lower-paying jobs are moving out of the city, and higher-paying jobs with a higher intellectual content are moving to the city. Thatís a good trend.
Citigroupís shuffle definitely continues a good trend for Long Island City. In recent years, the area has attracted sizable numbers of financial-services and insurance industry jobs.
Long Island City has become New York Cityís newest central business district, said Bloomberg. Citigroup was a pioneer in recognizing the economic potential [here].
Added Charles Gargano, chairman of Empire State Development (www.empire.state.ny.us), Citigroup has launched an economic revolution for businesses and residents of Queens here.
Citigroupís local presence has grown to 4,800 employees in the 1.4-million-sq. ft. (126,000-sq.-m.) Court Square One part of the companyís 6,300 total jobs in all of Queens. Metropolitan Life is another of Long Island Cityís major players. MetLife relocated 1,800 Manhattan employees to the city last year.
New Jersey Subsidies WereBut New Jersey, Citigroup demonstrated, was definitely still running and using a considerable chunk of money in the process.
Pivotal in Edging Out Connecticut
Weíre very proud to welcome this significant Citigroup investment in New Jersey, said McGreevey. Thanks to our wise investments, the stateís economy is creating jobs at an outstanding pace, and more people are employed today in New Jersey than ever before in history.
New Jerseyís estimated $52.7 million in subsidies will come from the stateís Business Employment Incentive Program (BEIP). The BEIP awards cash grants of as much as 80 percent of the income tax thatís withheld from any new jobs created by a qualifying project.
McGreevey last year tried to suspend the subsidy program. Facing a $5-billion state deficit, the governor unveiled a fiscal 2004 budget that proposed temporarily dropping BEIP.
But New Jerseyís business community raised a major ruckus, including the state Chamber of Commerceís (www.njchamber.com) Whereís the BEIP? campaign. McGreevey soon changed course, signing a revamped BEIP into law in September of last year.
Citigroup is among the targeted industries that qualify for the new programís maximum subsidies. BEIP targets financial services, along with biotech, high tech, logistics and transportation.
Citigroup Will Invest $80
Million in Former Lucent Campus
Citigroup has chosen a vacant five-building campus in Warren Township
that was formerly occupied by Lucent Technologies.
The company will occupy three of the five facilities in the
829,000-sq.-ft. (74,610-sq.-m.) complex. SJP Properties owns the campus,
which sits some 33 miles (53 kilometers) west of New York City. Citigroup
will invest $80 million in the Warren Township property, company officials
©2004 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.