Morgan Stanley, a $115 billion financial services giant, plans to consolidate its wealth management group in Harrison with the help of up to $21 million in tax subsidies.
The Westchester Industrial Development Agency approved up to $13 million in sales tax exemptions Nov. 23 on at least $200 million in renovations at Morgan Stanley”™s Harrison campus. The company is negotiating up to $8 million in property tax abatement with the town of Harrison, according to county officials.
Morgan Stanley bought the 2000 Westchester Ave. campus in 2002. More than 1,200 people are employed there and up to 1,100 jobs could be added, according to a July 24 memo by IDA economic development consultant Michael Grella.
The company was looking at several locations around the country, for its wealth management group, and claimed it needed tax breaks to offset high construction and operating costs in Westchester.
The tax breaks “will make the Westchester campus viable for the applicant,” the Grella memo states, and without the assistance “there is a possibility that existing jobs currently located at the Westchester campus could be relocated out of New York State.”
Some of the jobs will be relocated from New York City.
Morgan Stanley requested confidentiality for certain details in its IDA application, according to the minutes of an Oct. 8 IDA meeting.
The IDA has withheld the public record for several days, to allow a Morgan Stanley attorney to recommend redactions. The IDA”™s outside counsel, Michael Curti, of Harris Beach PLLC, said the application could be released later this week.
Information that would be blocked, he said, could provide an advantage to Morgan Stanley competitors.
Joan McDonald, the IDA chairwoman, also cited the sensitivity of relocating jobs from Manhattan, as a factor, in a brief telephone interview. Morgan Stanley”™s counsel, Joseph Carlucci, of Cuddy & Feder, told the IDA board on Nov. 23 that the company has no intention of closing any buildings in New York City.
The project application lists the details of tax breaks and benefits as ranges, depending on the final scope of work, according to the Grella memo, and so as not to give competitors an advantage, according to Curti.
The sales tax exemption, for instance, ranges from $6.5 million to $13 million, over three to seven years. The property tax abatement would range from $3 million to $8 million.
By granting a sales tax exemption first, without a property tax deal in place, Morgan Stanley can begin work right away, Curti said.
The 750,000-square-foot complex and 107.4-acre property opened in 1977 as Texaco”™s world headquarters. Morgan Stanley uses most of the space and also leases offices to Atlas Air Worldwide.
The renovations are expected to take from three to seven years. The goal is to enhance the quality of the workplace, to improve productivity, Dan Haggarty, managing director of Morgan Stanley told the IDA on Oct. 8.
A fitness center and TV studios would be upgraded, for example. Physical therapy rooms and a small convenience store would be provided. Conference rooms and meeting rooms would be enlarged and redesigned.
The project would create 923 construction jobs, according to the Grella memo, retain from 1,200 to 1,350 employees, add from 700 to 1,100 jobs, and create another 100 to 500 jobs for food services, security, maintenance and landscaping and other work, according to the Grella memo.
The county would bring in from $15 million to $25 million in new property taxes and sales taxes over 10 years, the memo states. For every $1 the county awards in tax breaks, Grella calculated, it will get back from $1.75 to $2.50.
Morgan Stanley booked $45.4 billion over the past year, as of the Sept. 29 quarterly report, and a profit margin of 21.7%. It”™s share price, as of today, was up 30% for the past 52 weeks, compared with 16.8% for the S&P 500 index.
More corporate welfare, but why? Struggling homeowners and residents shouldn’t have to pay up while these corporate entities make millions- on just the tax abatements. With deals like this its no wonder NY has turned into a tax hellhole that no person or company would move too.