Drawn by nearly $100 million in state incentives, Starwood Hotels & Resorts Worldwide Inc. confirmed it will relocate from White Plains, N.Y., to Stamford in two years, giving outgoing Mayor Dan Malloy a final exclamation point in an impressive economic development record during 14 years in office.
Gov. M. Jodi Rell announced Starwood Hotels”™ plans in mid-November. The Fairfield County Business Journal first reported Oct. 16 of Starwood”™s renewed interest in Stamford and specifically in 333 Ludlow Street, the new headquarters building it will lease from Norwalk-based Building and Land Technology (BLT).
Starwood plans to bring 800 jobs to Stamford in 2012, though given White Plains”™ close proximity to Stamford, most Starwood employees who live in New York will not need to go house hunting in Connecticut.
BLT is leading development of Harbor Point, and earlier this fall said it had a potential tenant interested in securing 250,000 square feet of space in an office it had yet to build, for which it needed city approval to proceed. Some in the industry have speculated General Electric Co. could be that phantom tenant, given GE”™s occupancy of multiple other BLT buildings in Fairfield County.
Scotiabank has also been rumored to be scouting Stamford for a large new office building in recent weeks, and many think Greenwich-based Nestle Waters North America is taking a long look at the Long Ridge Road building currently occupied by Oracle Corp. as a new headquarters.
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“Stamford is electric,” summed up Gerard Hallock, who in November was named head of the Stamford office for FirstService Williams, a commercial real estate brokerage company.
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Starwood”™s interest in Fairfield County been rumored off and on ever since the company made the decision more than a decade ago to relocate its headquarters to the East Coast from Arizona.
It is the highest profile cross-border relocation of a business operation since Royal Bank of Scotland PLC began moving into a downtown Stamford office building last summer from Greenwich and from New York City; and conversely, since Time Warner Cable abandoned its Stamford headquarters to move into New York City, even as it went public in an initial public offering of stock.
Starwood Hotels will be one of the largest companies based in Fairfield County, with 145,000 employees entering 2009, although it has cut an undisclosed number of jobs this year. Starwood earned $178 million in the first three quarters of 2009, with revenue off 22 percent this year to under $3.6 billion.
“I am thrilled to see a company of Starwood”™s stature make the business decision to move here and invest here,” Rell said, in a prepared statement. “It is a triumph for Connecticut ”“ and it speaks volumes about what our state has to offer businesses.”
Starwood is set to receive up to $75 million in tax credits and a $9.5 million loan from the Connecticut Dept, of Economic and Community Development, as well as an additional $5 million in sales tax exemptions on building materials if approved by the Connecticut Development Authority.
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“After an extensive search for new office space for our worldwide headquarters, it became clear that this particular space in Stamford was an ideal choice,” said Frits van Paasschen, CEO of Starwood and a resident of Greenwich, in a statement. “Not only did the state of Connecticut provide meaningful incentives that translate to a savings of 20 percent per year in rent, but we will also have the opportunity to design office space that reflects Starwood”™s leadership in global hospitality, design and brand-building, as well as our commitment to the environment and our communities.”
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The owner of the Sheraton, Westin and St. Regis brands is on track to open between 80 and 100 hotels this year, after opening a company record 87 locations in 2007. At the same time, Starwood has been working to reduce the percentage of hotels it owns outright, from 56 percent of its branded hotels in 2004 to less than 20 percent down the road.
The company”™s portfolio of hotels it owns is skewed toward luxury venues, and as a result has been hit hard in the economic downturn.
“It is a pretty hard time to sell very much,” van Paasschen said, in an October conference call with investment analysts. “What we basically have done is taken a hard look at assets that we believe are either ”¦ noncore or that are so attractive that we can still get a good multiple for those. What we”™re definitely starting to see is more money available and more interest than even a few months ago. If the capital markets continue to rally the way they have and as people develop more confidence, we think there will be even more money coming in and that should give us opportunities to sell.”
