Week of May 5, 2003
from Site Selection's exclusive New Plant database
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Fidelity's HQ Relocation Creating at Least 750 Jobs in Jacksonvilleby JACK LYNE, Site Selection Executive Editor of Interactive Publishing JACKSONVILLE, Fla. Significantly lower costs, customer proximity and plenty of room to grow: That combo made up the lion's share of the location rationale in Fidelity National Financial's (www.fnf.com) decision to relocate its California-based headquarters to Jacksonville, Fla.(www.expandinjax.com).
The headquarters reshuffle will create at least 750 high-end positions in Jacksonville. And in the longer term, the relocation could create perhaps as many as 1,000 more new Jacksonville jobs.
Relocation only recently became a front-burner issue at Fidelity, Chairman and Chief Executive Officer William Foley II explained after the Board of Directors voted to begin final negotiations with Jacksonville.
"Over the last several months, we considered many factors in concluding that serious consideration must be given to a relocation of our corporate headquarters," Foley said.
$1.05B January Purchase of Jacksonville-
That purchase also gave the company some serious relocation options. Fidelity's acquisition included the 13-story, 500,000-sq.-ft. (45,000-sq.-m.) headquarters of Alltel's mortgage division. Even more significantly, And that newly acquired facility stood on a site containing a large swath of open space.
That was dramatically different from the scenario Fidelity faced in Santa Barbara. The company was finding expansion space scarce in its current headquarters city of 95,000 residents, which largely bakes its economic bread on its resort-town status.
Even so, the parent firm gave serious consideration to relocating Fidelity Information Services to Santa Barbara. Ultimately, though, Jacksonville's open acreage beckoned as greener pastures.
"While our company has sincerely enjoyed its relationship with Santa Barbara and the state of California," said Foley, "our success and subsequent growth has made it very difficult for us to find property that can accommodate our corporate office space needs in a city the size of Santa Barbara."
New Location Offers Lower
The first new tower will house most of the 750 positions that Fidelity says it will be creating in Jacksonville over the next three years. The Jacksonville jobs will include 250 transferred headquarters positions, including the company's entire executive leadership team and investor relations arm - most probably relocating over the next 12 months, Fidelity officials said.
The other 500 jobs will be local hires. "Access to a highly skilled and educated work force" was a major factor in choosing Jacksonville, Foley said. Fidelity's new Florida jobs will pay about $62,000 a year on average, company officials said.
Fidelity's Santa Barbara headquarters currently has 500 employees. The new tower in Jacksonville, however, will be able to house more workers, including transfers of non-headquarters personnel.
And, with its option of erecting a third building on the headquarters site, Fidelity may create even more jobs. That option could prompt relocating another 1,000 existing jobs to Jacksonville in the future, Fidelity officials said.
The new digs in Jacksonville represent one of the major cost savings that drew Fidelity to the city of some 740,000 residents. "By moving into the large campus that we now own in Jacksonville, we can eliminate the cost of leasing office space for our corporate headquarters," Foley said.
The area's lower costs will also be a boost in transferring Fidelity employees to the headquarters site.
"Our biggest problem in California," Foley explained, "is that people we wanted to move there couldn't afford to live there. They would have to drive from 60 or 70 miles (96 or 112 kilometers) away." Jacksonville's cost of living, said Foley, is half that of Santa Barbara, 95 miles (152 kilometers) northwest of Los Angeles
Alltel Buy Increased Importance of Customer AccessFidelity will also significantly cut its own travel costs by positioning its headquarters closer to many major customers.
"The Southeast coast location, the Eastern Time Zone and the availability of a major airport all provide more efficient access to many of our major customers in the large East Coast business centers and in the country's central and southern parts," Foley said.
The Alltel acquisition made such considerations especially significant.
"These factors are particularly important with respect to those financial institutions that are Fidelity Information Services customers or potential customers," he added. "That business is a very important piece of the future of Fidelity National Financial, and the Jacksonville location will allow me to be more personally involved in the Fidelity Information Services business."
Fidelity is planning on taking optimal advantage of its customer proximity: The company will build a 19,000-sq.-ft. (1,710-sq.-m.), $2.2-million aircraft hangar for its corporate jets at Jacksonville International Airport, officials said.
Incentives Total $10.5 MillionState and local incentives are relatively modest, considering the size and significance of the Fidelity project.
The total incentive package is $10.5 million for the Fortune 500's No. 326 player. That total includes $8 million for job training, $2.5 million for local property tax breaks and $2 million for state road upgrades.
"Fidelity's significant capital investment far outweighs the state and city investment that has been proposed," said Tom Petway, chairman of the Jacksonville Economic Development Commission (JEDC at www.coj.net). The JEDC and the Downtown Development Authority have approved the incentives. The Jacksonville City Council, however, must still OK the project subsidies at its June meeting before the deal is formally done.
Fidelity will be the second Fortune 500 firm to relocate its headquarters to Jacksonville in 2003. CSX in March announced that it's relocating its operations base to the Atlantic Coast city from Richmond, Va.
The nation's largest title insurance company represents Jacksonville's third Fortune 500 headquarters. Winn-Dixie is also based in the city.
Fidelity, however, isn't totally pulling out of Santa Barbara. The company will continue to base Fidelity National Information Solutions in the California city, as well as the company's regional title insurance operations, Foley said.
©2003 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.