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SEPTEMBER 2004

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NORTH AMERICAN REPORTS

 
HQs Reporting In

The total number of headquarters projects tracked by Conway Data's New Plant Database between 1999 and 2003 comes to 2,236. Out of that total, just 99 (or 4.4 percent) were from Fortune 500 companies.
      In 2003, total HQ projects came to 176, but 15 of them (or 8.5 percent) were from the Fortune 500.
      Among the most recent Fortune 500 headquarters projects has been Charlotte-based Bank of America's 1,400-employee move in New York City, where it plans to occupy half of the 2.1 million sq. ft. (195,090 sq. m.) in the $1-billion 52-story Bank of America Tower. On August 2, 2004 -- the day after a major terror alert in the area's financial district -- Bank of America, the Durst Organization and elected officials gathered for the groundbreaking. BOA President and CEO Kenneth D. Lewis said the tower "represents our commitment to, and belief in, the future of New York City ... not only as the world's financial capital, but as a critical market for companies looking to succeed in financial services at the highest level."
New York City Mayor Michael Bloomberg, New York Gov. George Pataki and Bank of America President and CEO Kenneth D. Lewis break ground for BOA's billion-dollar tower.
Photo courtesy of The Durst Organization.
Repatriation Could
Spur Reinvestment

Pending federal tax legislation -- designed to re-jigger corporate tax rates to appease both the WTO and multinationals -- could have a pronounced effect on corporate real estate. That's because foreign earnings, hitherto taxed at the going rate of 35 percent, would instead be taxed at a rate of 5.25 percent, provided the cash is reinvested in the U.S. within 12 months of the law's enactment.
      Estimates from Smith Barney project a potential $300 billion in repatriated earnings, although a June 2004 update on the issue from JP Morgan Chase Bank raises that sum to $425 billion in possibly returned earnings by the end of 2004, out of a total available pool of $510 billion -- more than half of which is held by pharmaceutical and manufacturing companies.
      An analysis of the repatriation scenario performed for the Congressional Research Service in October 2003 found that currency exchange rates and rate of return would offset much of the "stimulative impact" of repatriation, as net exports would be reduced. But the JPMorgan report cites its own survey, which indicates that 35 percent of the total repatriated amount would be spent on investment or R&D. The report also estimates job gains of roughly 600,000 over two years.
Soccer and
Supplements in Chi-Town?

In the Town of Cicero, Ill. -- a Chicago community with a large Hispanic population -- Mexican nutritional product and soccer magnate Jorge Vergara is proposing to hire 1,000 workers at a new manufacturing and distribution center for his Omnilife Group. Or so the story goes.
      The project -- which would also include a youth sports academy at the now-closed Sportsman's Park racetrack -- would benefit from tax increment financing (TIF). The sports facility, called Chivas Club, would carry the same moniker as the Major League Soccer team Vergara just purchased in Los Angeles and the Guadalajara team he's owned since his $100-million buyout in 2002. He has interests in major film production, having backedY Tu Mama Tambien. And his long-simmering, $678-million, 11-building cultural complex in Guadalajara is expected to finally break ground later this year.
      Omnilife Group currently operates distribution centers in Houston (2), Dallas, and Austin, Texas; Commerce and San Jose, Calif.; Henderson, Nev.; and the Chicago suburb of Bensenville, Ill. According to the Chicago Tribune, the proposed 200,000-sq.-ft. (18,580-sq.-m.) facility would serve the U.S. and Canadian markets. In 2001, Omnilife opened a manufacturing facility near Cali, Colombia. In July 2004, Vergara announced that Omnilife was making inroads with its nutritional products in Russia and planned to build a plant there.
      Town of Cicero President Ramiro Gonzalez hails from the same home state as Vergara: Jalisco. Cicero newspaper El Dia reported in July that Vergara had met with Gonzalez, and that Vergara had confirmed plans for the complex. But repeated requests for interviews with Gonzalez and Town of Cicero attorney Dennis Both went unanswered. And state and Chicago economic development officials are not involved in the project.
      Omar Duque, spokesperson with the Town of Cicero, tells Site Selection that "nothing is finalized on the project yet, and there isn't a location." Hearings are indeed under way, however, regarding a proposed TIF district along Cicero Ave. The town has seen dramatic retail growth in another TIF that used to house the offices of Western Electric, and yet another TIF on Laramie Ave. includes the Sportsman's Park racetrack. The latter property was purchased by the town in 2003, with developer DiMucci Companies planning at that time to invest $150 million in a hotel, shopping, soccer and convention complex. But, says Duque, "that is not where Omnilife is going to go."
      Like a floating corner kick, where -- and whether -- Omnilife has a goal in mind in Cicero is still firmly up in the air.



©2004 Conway Data, Inc. All rights reserved. SiteNet data is from many sources and not warranted to be accurate or current.