After winning election in part due to his mayoral successes filling in Stamford”™s skyline beginning with UBS AG in 1997, one of Connecticut Gov. Dannel P. Malloy”™s first projects may have to be reaching out to the Swiss giant with a new package of incentives in a bid to keep it in Stamford.
And Malloy would have to do so with a new head of the Connecticut Department of Economic and Community Development, after Commissioner Joan McDonald accepted New York Gov. Andrew Cuomo”™s invitation to lead that state”™s transportation department.
As UBS eyes multiple large leases approaching expiration in the tri-state area over the next four years, real estate observers say the company continues to assess its options ”“ and that abandoning Stamford remains one very much on the table.
”˜We are committed to Stamford”™
Stamford insiders have long considered the company”™s longtime presence a safe bet, given the ready access to a significant cluster of financial talent who live and work in Fairfield County and given the company”™s signature trading floor in Stamford, the largest in the world when it was built.
“I don”™t see that happening,” said Jack Condlin, president of the Stamford Chamber of Commerce, whose past chairman Joyce Mazur is associate director of corporate real estate for UBS Americas in Stamford. “They really, really struggled through this bad economy, and when people struggle like that, there”™s a lot of things put on the table and discussed ”¦ If they left there, where would they go? If anything I would think they would shut down some of their other locations and bring people here.
“If they were continuing to downsize, I could see them saying, ”˜Yeah, this building is killing us,”™” Condlin added. “But they seem to be rebounding.”
What”™s more, in late December UBS renewed a lease for 1 million square feet of space at the Lincoln Harbor complex in Weehawken, N.J., where it has a similar sized operation, rather than attempting to consolidate those operations in New York City.
A year ago, a UBS spokesman was quoted in a Bloomberg News story run in the Stamford Advocate that its lease at 677 Washington Blvd. does not expire until 2017, and that its intention was to “maximize use of the site” through that date.
Entering 2011, UBS spokesman Kris Kagan said there was not much to add.
“We always analyze our space (and) office needs versus our staff at all of our locations,” Kagan said. “As a matter for firm policy, we don”™t comment on our lease negotiations. As you can imagine, given our real estate needs, there is always some kind of negotiations going on. However, we are committed to Stamford and enjoy the quality of life the city and region offers our employees.”
Significant incentives to stay
Stamford has absorbed its share of shockers over the years, from onetime telephone giant GTE terminating its Stamford headquarters to relocate to Texas, to International Paper inking a headquarters lease in Memphis, Tenn., abandoning both Stamford and the access it offered to tri-state area executive talent.
Any loss of UBS would strip Stamford and Connecticut of the anchor employer that sparked the gold rush of financial companies to Fairfield County, and as such the company would be able to lean on the state for significant incentives to stay. An economic development group recently recommended that Malloy focus scant resources on retaining existing businesses in the state rather than attempting to lure new ones, arguing it is an easier proposition.
“If they did leave, I am sure another financial company would move in,” Condlin said. “But it might take a while.”
Connecticut does not lack incentives to wage battle with New York or New Jersey for UBS jobs ”“ last year it offered United Technologies Corp. $100 million in incentives to keep a pair of Connecticut plants open, a deal ultimately rejected by UTC.
Under its Urban Reinvestment Act Tax Credit program in the past several years, Connecticut has extended $100 million in incentives to bring RBS to Stamford from previous locations in Greenwich and New York City, and $75 million to outbid New York in luring Starwood Hotels & Resorts Worldwide Inc. to Stamford from White Plains, N.Y.
The law allows companies to take a tax credit on a dollar-for-dollar basis for investments exceeding $5 million in economically distressed communities or $50 million in economically healthy locales. Under a 10-year schedule, companies vest the credits in the first four years, and starting in year four can begin “spending” the credits against their corporate income tax at a rate of 10 percent for four years, and 20 percent in each of the final three years.
The city has gotten a payback on that investment in more ways than just paychecks ”“ UBS has been a model corporate citizen, donating more than $12 million for civic, education and other initiatives, and serving as the longtime sponsor of one of Stamford”™s signature events, the annual pre-Thanksgiving balloon parade.
The company has done so even as it has borne multiple inquiries and fines from state agencies in Connecticut for varying infractions, most prominently from former Attorney General and new U.S. Sen. Richard Blumenthal who berated the company following a federal investigation into secretive overseas accounts U.S. citizens were suspected of using to evade taxes.
