Been around lately to see how many floors are vacant on the waterfront of JC - It doesn't look good !

http://www.siteselection.com/features/2010/jan/New-Jersey/


?Jersey City worked in a real partnership to make this deal happen.?
? Jay Biggins, executive managing director, BLS & Company, and lead site selection consultant to DTCC

River Crossing For the Ages

The relocation of 1,600 high-salaried jobs from Manhattan to Jersey City
may change perceptions of the New Jersey business climate.

by RON STARNER
ron.starner@conway.com

DTCC will lease 415,000 sq. ft. (38,554 sq. m.) for 20 years in Newport Office Center VI (pictured) in Jersey City. Up to $45 million will be invested in facility improvements. The development is in line to be reimbursed for up to $14.6 million, or just under 20 percent of the total eligible project costs for the redevelopment, by a new state incentive program.

Not since 1609 has a trip across the Hudson River had the potential to generate such a dramatic and enduring economic impact.

Henry Hudson changed the course of history four centuries ago with his famed exploration of the waterway that would later become the boundary separating New York from New Jersey.
On Oct. 13, 2009, the Depository Trust & Clearing Corp. made history of its own when it announced plans to relocate 1,600 staff members from Lower Manhattan to the Newport Office Center just across the river in Jersey City.
?After lengthy deliberations with officials in New York and New Jersey, we have concluded that a move to New Jersey is the right decision,? said Donald F. Donahue, chairman and CEO of DTCC, in announcing the largest lease of the year in Jersey City. ?New Jersey offers us a favorable business climate, convenient access to our customers in the greater metropolitan area, and also allows us to disperse our staff more widely for business continuity purposes. New Jersey will benefit from an infusion of 1,600 highly skilled professionals who specialize in financial services, information technology and operations. We are also excited to tap into New Jersey?s skilled work force as our business grows in the future.?
The move, expected to occur in early 2013, is significant for both cities. The relocating jobs pay an average annual wage of $130,000.
The real estate component alone is huge. DTCC will lease 415,000 sq. ft. (38,554 sq. m.) for 20 years in Newport Office Center VI. Approximately $45 million in facility improvements will be made at the waterfront development of The LeFrak Organization.
?We intend to make investments in both the technology and infrastructure at our new offices in keeping with the needs of this location,? says Anthony Alizzi, managing director, DTCC, by e-mail. ?However, it is important to underscore that DTCC has multiple data centers and operating centers, more than a thousand miles apart, both in the U.S. and overseas. This vast network ensures that we have the resiliency and business continuity to continue operating under both ordinary and extraordinary circumstances.?
The incentives that made the deal possible are groundbreaking. Totaling about $100 million, the package of government assistance includes tax abatements and grants from the New Jersey Economic Development Authority, state Department of Labor & Workforce Development, Jersey City and Hudson County.
How the deal happened reveals as much about the transformation of New Jersey as it does the complexities of the high-stakes securities industry.
DTCC, through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. DTCC is also a leading processor of mutual funds and insurance transactions, connecting funds and carriers with financial companies and third parties that market these products.
DTCC?s depository provides custody and asset servicing for than 3.5 million securities issues from the U.S. and 117 other nations and territories, representing a total value of $27.6 trillion. Last year, DTCC settled more than $1.88 quadrillion in securities transactions.

Incentives Reduced DTCC?s Costs
To comprehend the reason for the move, one must first understand the business model of DTCC. Even a fraction of a penny saved per transaction can add up to millions of dollars a year in potential cost savings for the company.
DTCC is owned by its customers ? the major global banks and securities firms that do the trading. Any profits made by DTCC are distributed back to the owners in the form of lower fees.
Occurring as it did during the middle of the financial market meltdown and global economic crisis, the corporate relocation project was driven by the need to reduce the overall operating costs of DTCC in the New York metropolitan area.
While the company will retain 700 jobs at its existing headquarters in Lower Manhattan, the incentives

offered by New Jersey made the decision to cross the Hudson River easy for DTCC executives.
?Gov. Jon Corzine and the New Jersey Economic Development Authority actively pursued DTCC and were very responsive to our needs and concerns throughout this process,? Donahue said of the state?s then-chief executive, who will be replaced by newly elected Chris Christie on Jan. 19, 2010. ?The governor personally called me several times to discuss the economic and business advantages of relocating to New Jersey and made a persuasive case on the benefits of this move. The process, which began last year (2008), considered a wide range of variables. We looked at numerous options, but in the end we concluded that relocating these operations to New Jersey would allow us to manage our cost structure and position the company for continued business expansion in the years ahead.?
Donahue said DTCC used a broad set of criteria to make the decision, including the competitive costs for a long-term lease, economic incentives, availability of infrastructure support such as telecommunications and transportation, accessibility to DTCC headquarters, the ease of commuting for employees, ability to retain and recruit highly skilled staff to the location, and other quality-of-life issues for DTCC workers.
According to people involved in the negotiations, the incentives provided by New Jersey sealed the deal in favor of the Garden State. Several programs were tailored to meet the needs of the project:

In November, the New Jersey EDA approved an incentive under the new Economic Redevelopment and Growth Grant Program to help the project move forward. Under the agreement, the Newport Office Center VI will be reimbursed for up to $14.6 million, or just under 20 percent of the total eligible project costs for the redevelopment. The ERG program, designed for projects challenged by a financing gap, essentially uses future incremental state or local taxes as the source of the grant funding.
The company will benefit from the Business Employment Incentive Program (BEIP), a credit against state income taxes paid by DTCC workers, worth an estimated $74.6 million over 10 years.
The New Jersey Department of Labor & Workforce Development made a commitment to build a customized training grant program for DTCC. ?We worked with them on the specific kind of skill development to upgrade their existing work force or bring on new workers,? says David Socolow, commissioner of the department. ?Most of that will be existing workers, as they are just moving their location and their employees will have a slightly different commute.? Under this matching grant program, the employer puts up half the money. The total value of this training grant could be up to $1,000 per worker, or up to a total of $1.6 million.

The Jersey City Economic Development Corp. issued a $1-million Urban Enterprise Zone business relocation grant, which will be paid over four years. ?The first payment is due in the first year after their certificate of occupancy is issued,? says Rosemary McFadden, deputy mayor of economic development for Jersey City.
$10 million in bonds for gap financing was provided through twin allocations of $5 million each from Jersey City and Hudson County, according to McFadden. ?Through the federal economic stimulus program, we had received economic recovery zone bonds which we were able to use for this project,? she says.
DTCC also benefits from locating in an Urban Enterprise Zone that has a sales tax rate of only 3.5 percent. ?There is no corporate income tax or personal income tax in Jersey City,? adds McFadden. ?And the 07310 Zip Code has the highest level of post-graduate education in all of New Jersey.?

Quantifying the Deal?s Impact
The economic impact of the deal will be substantial, notes McFadden, who as former president of the New York Mercantile Exchange put her Wall Street experience to use. ?They (DTCC) will spend $45 million to retrofit and equip the office space, and Jersey City residents will be employed in the construction,? she says. ?An economic impact analysis using Bureau of Labor Statistics numbers shows that DTCC employees could be spending $11.6 million annually on food, entertainment and services in Jersey City. Plus, DTCC informed us that they will require about 700 room nights a year for corporate visitors. In addition, some employees will relocate to Jersey City to rent or purchase a home or condominium. If 20 to 30 percent of the workers do that, mortgage and rents locally could be about $10 million a year, which would boost our real estate market.?
Gov. Corzine, in announcing the deal, trumpeted it as one that would generate $260 million in economic impact over 20 years. Jerry Zaro, head of the New Jersey Office of Economic Growth, estimates that the state will collect $186 million in income taxes over the next two decades because of the project.
Caren Franzini, the New Jersey EDA CEO who worked on the project for over a year, said that the ?net benefits to New Jersey are extremely high, particularly to have these high-paying jobs in our state.?
Franzini tells Site Selection that the generous incentives were necessary to win the project. ?Recognizing that we do have some cost issues, we have adopted some major incentive programs to counterbalance those cost hurdles,? she says.
Jay Biggins, executive managing director of BLS & Company LLC in Princeton, N.J., served as the site selection consultant for DTCC on the project and applauded the cooperation that he and his client received from New Jersey. ?This was very much a real-time creative process of working between the state, the company and the city,? says Biggins. ?The entire process took more than a year; the complex facilities requirements made for a complex site search.?
In the final analysis, notes Biggins, ?reducing costs to deliver the lowest-cost transaction platform for the capital markets was the primary driver in guiding the location evaluations. Another important factor was the availability of talent with a high degree of financial markets expertise.?
The site search encompassed a range of location scenarios, says Biggins. Potential sites included Northern New Jersey, Connecticut, and Brooklyn and Westchester in New York. A few sites outside the region were also considered.
The Big Apple competed intensely to keep the jobs in Manhattan. ?Along with New York City, we worked to encourage DTCC to retain their operation in NYC with a competitive incentive package,? said Empire State Development Public Affairs Manager Lisa Willner. ?We did not provide DTCC with incentives to maintain their headquarters here.?
David Lombino, senior vice president of public affairs for the New York City Economic Development Corp., offered the following statement: ?We take the potential loss of any New York City employer seriously, and we actively engage with these companies. Rather than competing dollar for dollar with other cities? incentives, we?re confident that our strategy of investing taxpayer monies in maintaining the city as a place that businesses want to locate will ensure the greatest return in the long term.?
?DTCC has a long history of working with New York, and had productive conversations with the Mayor?s Office about our plans for the end of this lease,? writes DTCC?s Anthony Alizzi. ?With support from the City of New York, we negotiated for space at our current location in lower Manhattan to accommodate our corporate headquarters and a number of new growth businesses. Senator Charles Schumer was also particularly active in these discussions and played an important role in our decision to keep our headquarters and senior management positions in New York.?

Building Completed the Puzzle
In the end, though, the offer from New Jersey was simply too good to pass up.
?This was a rare opportunity to design legislation and economic development programs with real projects and how they actually work and see how the company would really value the incentives,? Biggins says of the New Jersey package that was formed during the spring and summer of 2009. ?That was very valuable for the state, and it enabled the company to explain how the program would apply to its project. It was an interactive and collaborative process that was corporate end-user driven.?
While not divulging what New York offered to retain the DTCC jobs at 55 Water Street in Manhattan, Empire State Development Public Affairs Manager Lisa Willner said,?Along with New York City, we worked to encourage DTCC to retain their operation in NYC with a competitive incentive package. ... We did not provide DTCC with incentives to maintain their headquarters here.?
The final piece to the puzzle was the available 12-story building at 570 Washington Blvd. in Jersey City, which now ranks as the 12th largest downtown commercial office market in the country.
JP Morgan Chase is leasing the Newport Office Center VI building but is vacating the space that will be taken by DTCC in 2013.
Ed Cortese, senior vice president of marketing and corporate relations for LeFrak, says his firm is thrilled to land a tenant with the stature and prestige of DTCC. ?We keep attracting blue-chip firms to the Jersey City, and a deal like this will definitely drive other tenants to the market,? he says. ?Newport attracts people.?
Biggins concurs. ?Jersey City worked in a real partnership to make this deal happen,? he adds. ?They were responsive and quite determined to be successful. They recognized that they were in a highly competitive situation.?
Corporate real estate attorney Ted Zangari, who represented sub-landlord JP Morgan Chase in the real estate portion of the deal, says the new incentives adopted by New Jersey have the potential to completely change the perception of the state?s business climate.
?There is no question that the incentives tipped the analysis in favor of New Jersey,? says Zangari, chair of the Public Incentives and Government Relations Practice Groups at Sills Cummis & Gross in Newark and Princeton. ?The New York EDC officials were genuinely frightened by the prospect of these new New Jersey incentives. New Jersey now has its game face on. We are running on eight cylinders for the first time in my 28 years of doing corporate real estate law.
?We are not perfect yet,? Zangari adds, ?but we are light years ahead of where we were before. New Jersey is getting its act together.?
http://www.siteselection.com/features/2010/jan/New-Jersey/

Jersey City Council to finalize deal with Wall Street firm

By Melissa Hayes/The Jersey Journal
October 27, 2009, 11:15AM

William B. Aimetti, President and Chief Operating Officer of the Depository Trust & Clearing Corporation (DTCC), announced Oct. 13 the move of 1,600 of his company's employees from Manhattan to the Newport section of Jersey City. With him are, from left, New Jersey Development Authority CEO Caren Franzini, Gov. Jon Corzine, Mayor Jerramiah Healy, Chairman and CEO of the LeFrak Organization, Richard LeFrak, and Hudson County Executive Tom DeGise.The Jersey City Council is expected to approve a package of financial incentives for the Depository Trust & Clearing Corporation at its meeting tomorrow night.

Gov. Jon Cozrine joined Mayor Jerramiah T. Healy at a press conference Oct. 13 announcing the Wall Street giant's move to Jersey City. The company will keep its headquarters and 700 employees in Manhattan, but move 1,600 employees to 570 Washington Blvd. in Newport.

The company holds the assets for most major banks and processes much of the world's financial transactions.

New York and New Jersey officials fought over the company for a year. Eventually nearly $90 million in financial incentives convinced DTCC to move most of its staff across the river.

DTCC plans to renovate the 415,000-square-foot, 12-story office, including converting a floor of parking into office space, before moving employees in 2013.

The City Council is set to vote on allocating $5 million in Recovery Zone Facility Bonds, a tax-exempt bond available to large cities and counties under the American Recovery and Reinvestment Act. Jersey City qualified for just under $10 million in recovery bonds.

The council will also vote on a resolution endorsing allocating a $1 million relocation grant from the city's Urban Enterprise Zone funds.

City officials said Hudson County will also contribute $5 million in recovery zone bonds. Also, the state Economic Development Authority's board approved $14.6 million in grants Oct. 13 to help with renovation costs. That's in addition to $74.6 million in tax incentives the board had already approved.

Council members said during Monday's caucus that they felt DTCC would help the local economy by bringing in 1,600 employees who would shop and eat in Jersey City.

Officials said they also felt that other financial businesses could follow DTCC to the city.

"This is a great way to grow Jersey City and I think it's a good investment on our part," Councilman-at-Large Mariano Vega said.

Actually the IRS figures you cited from City Journal were from 30 or 40+ counties around NYC (read the data footnotes). My figures were strictly Manhattan jobs. Without historical context, your data doesn't mean much to me. I can provide mine if you like. The metro region is highly populated, very expensive and the idea that people leave comes as no surprise.

I question your premise that these were established people/families going somewhere else, forgiving that we began this conversation talking about businesses leaving. I'll also forgive that City Journal is an agenda driven publication.

But, if you'd really like to make a point of it, you need to put it in some context.

-Who were these people? College students? Families?

-Apples to apples, we need Manhattan specific numbers.

-How did Philly and Boston compare? Because the "domestic migration" of almost all of the northeast is outward. The Democrats are grateful.

-Twenty year trend? Considering the massive influx of the 90s into NYC.

Yes, City Journal citing IRS data that anyone can find for themselves. The entire population of NYC is about 8 million so I suspect your workforce figures are from the greater NYC metro area that includes everything out to PA.

More to the point you do not seem to understand the importance of net domestic migration. It is simply the number of people who live in one part of the U.S. and move to another minus the people who move in. It is the quintessential measure of people voting with their feet.

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Domestic migration? City Journal? oh ok. Yes, we know it's expensive and people leave all the time. It seems they found new ones to take their place.

NYC workforce from the Bureau of Labor Stats:

Jan 2000 9157152
Aug 2009 9749217

The NY-NJ-CT region is a good place to do business for multiple reasons. The higher taxes pay for services and infrastructure that make doing business in the region more efficient. Roads, rails, airports, ports all cost money to maintain. The region also has many educated workers, in part because higher taxes have also paid for better schools.

The region also maintains many businesses that tend operate together. Corporate headquarters for many companies are here because the banking industry is here which provides capital for every business sector. Legal services are here because the corporate headquarters are here. Because the capital and the legal teams are here, corporations move their headquarters here. Once there is a critical mass of corporate officers in a location and services to support the corporations, it makes sense for other businesses to locate in a geographic region because it often makes sense to be in proximity to business partners.

One excellent example of this is Bentonville, Arkansas, which has seen dramatic growth as corporations have moved offices to the area to be in proximity to a critical retail partner, which is headquartered there. The more businesses that move there, the greater the infrastructure is built up-- including airline flights to major East Coast cities.

While the NJ-NY-CT metropolitan region offers an excellent place to do business, many companies have been moving less important employees out of the metropolitan region because it is expensive to be here. Its not just taxes, but the cost of labor and real estate as well. Moreover, many jobs linked to the ports are heading west to California to service goods coming from China, rather than goods being exported to Europe.

Assuming that you are replying to my immediately previous post, here is the evidence (from IRS data) that there is indeed a mass exodus:

"From 2001 to 2008, New York lost more than 1.5 million domestic migrants?a larger loss than any other state?s (see Chart 1). That?s also the largest percentage loss of any state?more than 8 percent of New York?s 2000 population?even beating out Katrina-ravaged Louisiana."

and:

"Losses were concentrated in metropolitan New York City, which accounted for more than 1.3 million net domestic outmigrants?nearly 90 percent of the state?s loss. (Metropolitan New York City is defined as the New York State counties within the Census Bureau?s 30-county ?New York Consolidated Area.?) Almost 11 percent of the metropolitan area?s 2000 population was lost to domestic migration, compared with less than 3 percent in the rest of the state."

http://www.city-journal.org/2009/nytom_migration.html

The data shows that I'm not the one who is delusional. Costs of doing business matter, taxes matter, and the most profitable new businesses can locate where they chose.

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Sure, no one's denying that. But costs do matter, and if NYC/NJ wanted to spur investment and job growth, they'd make it less expensive to do business there.

NYC has over a half million small businesses. Real estate and human resource prices trump these meager incentives any day. But, people still open new businesses there every single day because of the location/exposure, potential client base and educated workforce. The intangibles are limitless.

The high cost of doing business there has been far outweighed by fostering some of the greatest entrepreneurial spirit in the world.

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How?

You make it sound like there's some mass exodus or the one factory in town is leaving. You're completely delusional.

With respect to a business like DTCC, clearance and settlement can be done anywhere in the U.S., and much of the work could be done abroad, so ultimately we live in a global economy.

The problems caused by high costs in the NYC metro area can't be dealt with by collusion between state governments. The root of the problem is the high cost of doing business driven by: high taxes, an entrenched and oversized public sector, and a generally anti-business environment. As if this wasn't enough: subsidies also just give small startups, that can locate anywhere, another reason to not be here; given that they won't get the breaks and will be competing on an unfair playing field.

The attitude of public officials is not encouraging: "Mayor Michael Bloomberg who told the New York Times, ?Any company that makes a decision as to where they are going to be based on the tax rate is a company that won?t be around very long. If you?re down to that incremental margin, you don?t have a business.?"

His presumption is that companies only leave NYC when the only way that they can survive is to gain a tax benefit. I have seen many companies decide that leaving NYC is "free money" on top of an already profitable business. Of course many other factors (and NYC suffers in many of these) matter in a location decision but to claim that taxes don't matter at all is silly.

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The least ability to pay are not paying the taxes.

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It's actually a gain because people with more after-tax income will spend on goods and services.

Jersey City's 1,600 jobs boost from Deposity Trust & Clearing Corp. good sign for future

October 18, 2009
The Jersey Journal

Pointing to the decision by a Wall Street colossus to move 1,600 jobs from its Manhattan digs to a waterfront office building in Jersey City, Star Ledger columnist Tom Moran writes today that New Jersey remains "a rich state with some strong fundamentals" -- even as he skewers the main gubernatorial candidates for not having plans to hoist the Jersey economy out of its doldrums.

Chris Christie, he writes, offers "traditional Republican gruel. Gov. Jon S. Corzine, of Hoboken, "more of the same, with tweaks."

About the plan of the "earnest" and independent Chris Daggett to cut property taxes and expand the sales tax, Moran writes that he "floats far above the political realities."

The Corzine administration bundled $90 million worth of incentives to woo the the Depository Trust & Clearing Corp. jobs, which will come to Newport in 2013.

There were the other reasons for the Wall Street giant to move to New Jersey, and to Jersey City in particular: a skilled workforce, good public schools, excellent transportation, much lower rents, and a high quality of life for employees, Moran writes.

Did NYC Miss the Boat With DTCC?

By Cody Lyon
globest.com

NEW YORK CITY-The Depository Trust & Clearing Corp.?s Tuesday announcement that it will move 1,600 employees to Jersey City?s Newport Office Center in early 2013 is sending a slight chill down the Lower Manhattan office market. That, despite the holding company?s announcement it will still keep its headquarters as well as around 700 workers on Manhattan Island.

The New York Post reported the 415,000-square-foot DTCC New Jersey space will be subleased from JPMorgan Chase for a price in the low $20s. Currently, Downtown space averages around $42 per square foot, according to Cushman & Wakefield. DTCC, founded in 1999 through the merger of Depository Trust Corp. and National Securities Clearing Corp., is currently located at 55 Water St. Downtown, where it occupies 900,000 square feet.

?There were a variety of factors we took into consideration when we were looking at our relocation plans for the future,? a spokesperson for DTCC tells GlobeSt.com. He says the company had been in internal discussions ?for the better part of a year now.?

But reportedly the decision was hastened by the enticing efforts of New Jersey Economic Development Assoc. officials who sweetened the pot extensively, promising DTCC around $90 million in added incentives and tax financing. The incentives, along with the move itself, have been earning headlines across the region, offering evidence that the recession might be re-stoking incentive-centric border wars between Manhattan and its less pricey Gold Coast neighbor across the Hudson.

?The city and state made an effort to keep Depository Trust & Clearing Corp. in the city,? Steven Spinola, president of the Real Estate Board of New York, tells GlobeSt.com. ?They formed a working group, made some offers and there were some meetings.?

He jokingly says the New Jersey incentives ?basically write a check to the company, for somewhere close to 90% of what the employees end up paying in income tax.?

Actually, New Jersey?s Business Employment Incentive Program or BEIP offers grants based on the number of new jobs created. By adding 25 qualified jobs, ten for qualifying tech companies, within two years, companies can get reimbursed for up to 80% of gross withholding tax aid by new employees for up to 10 years, to a maximum of $50,000 per employee.

And, Spinola says New York City "will continue to lose tenants to New Jersey, because we have nothing like that.? Still, he acknowledges, therein lies an important question: ?should we match, dollar for dollar, what other states are offering??

More importantly, Spinoloa says the motivation ought to be keeping existing tenants in New York. Matter of factly, Spinola says ?over the next couple of years, most of the city?s jobs will be coming from companies already here.? He says REBNY has suggested an incentive program that basically says if ?a tenant signs a new 10-year lease and invests in its space, we?ll give you something in return.? Ultimately, he says, ?We need to keep those jobs here.?

But, even if the REBNY recommendations were written in stone, Spinola doesn?t think it would have made the difference in the case of DTCC, because in this case, New Jersey?s incentives were so much greater than what REBNY has recommended.

A spokesman from the New York City Economic Development Corp. apparently agrees, telling GlobeSt.com that first and foremost, it was glad the company was maintaining its headquarters in Lower Manhattan. And, the spokesman adds, although ?we?d like all of its operations to be here, we?d rather use scarce taxpayer dollars to invest in our future than engage in a reckless bidding war with New Jersey.?

But, New Jersey economic czar Jerry Zaro, calls that ?a bit disingenuous,? saying New York City ?bid very aggressively.? But, he adds, ?I?d probably be doing the same thing if we?d lost.?

He points to the economic benefits of the planned move, noting, ?right now, New Jersey makes zero dollars on DTCC. After this deal, they?re coming in with $81 million of capital expenditure, immediately on the construction of their facility, furniture and equipment,? but ultimately, he adds, his mission, is ?putting people to work.

Some worry that in these challenged economic times, New York City should also be doing all it can to retain and attract new tenants to the city. After all, shrinkage in the financial industry has cast doubt on the city?s future job growth engines.

?Based on current unemployment trends, retention of existing tenants should be a clear priority for all participants in the marketplace, ? says Robert Knakal, chairman of Massey Knakal Realty Services.

Sources closer to the negotiations between the city and DTCC say government officials presented several discretionary incentives to persuade the company to keep all operations in the city, as well as other "very significant" incentive packages. However, in the end, they say it would not have been in the best interest of the city to offer more, especially since nothing they came up with compared to the package from across the river.

Good Jobs New York is an advocacy group that seeks to promote policy holding government officials and corporations accountable to taxpayers, particularly in the realm of economic agencies giving subsidies to large corporations that threaten to leave New York. GJNY project director Bettina Damiani tells GlobeSt.com that ?there?s enough smoke and mirrors, on both sides of the river, for people to feel they don?t have all the information about how tax breaks were involved in this project.?

Besides that, she says, ?big corporations will tell you, they don?t make business locations based on tax breaks. That?s just not smart business.?

But Spinola says critics of government incentives have never actually been involved in the complicated, thorny process that attempts to try keeping tenants in New York City. ?I did it when I was with the city,? he says. ?Saved some, lost others and I used to say, you?d never know if you gave them too much to stay, but you always knew if you?d given them too little.?

But Damiani counters, pointing out a 2001 quote by New York City Mayor Michael Bloomberg who told the New York Times, ?Any company that makes a decision as to where they are going to be based on the tax rate is a company that won?t be around very long. If you?re down to that incremental margin, you don?t have a business.?

With that, Spinola agrees, saying no corporation is going to make a location decision solely on whether there?s a tax incentive. He says it?s true, companies like DTCC are looking at everything New York and New Jersey have to offer. For example, ?in New Jersey, they offer the tax incentives and the suburban office park. But in New York, there?s more excitement for the employees, greater access to your competitors, vendors and clients.? He says companies compare all of those things, including the incentives. And while some companies will pay anything to be in New York City, right now in a recession, ?most companies have to look at the bottom line.?

Clearly, says Spinola, ?anytime we lose jobs like this, it?s a blow to the city of New York,? and to the real estate community. However, ?my understanding was, that the owner of 55 Water St. was included in the discussions with what to offer DTCC. Everybody made an effort here,? he says.

Spinola adds, ?I?m not sure if anything could have been done to change this. When these decisions are made, frequently they are made under the guise of an economic decision, and then, you find that in many cases, the people making the decision, end up moving the company closer to where they live. Sometimes you can?t change that no matter what you do.?

The DTCC spokesman tells GlobeSt.com that it mainly considered competitive costs for a long-term lease, availability of infrastructure support, telecommunications, transportation and accessibility of site to the headquarters in Manhattan. The spokesman says there were also issues for employees, such as commuting, the ability to recruit highly skilled staff, and yes, overall quality of life issues.

In the end, the DTCC spokesman tells GlobeSt.com that it was not just the incentives that coaxed its planned move to New Jersey. Besides, the address remains in Lower Manhattan. ?We have a longstanding, excellent relationship with New York. I think that?s evident in the fact that we?re keeping our headquarters here, with 700 employees.?

For more in depth coverage about the DTCC move, from the other side of the Hudson, check out how New Jersey Nabs New York Jobs.

I agree.

But like in any investigation of the mob there is one who will break. I, like ianmac, think all tax deals to get jobs should be abandoned becasue it unfairly and ultimately lays the tax buden on those with the least ability to pay.

BUT, assuming a deal betweeen NYC and all of Hudson County, then we'll hear generous offer from New Rochelle, or Darien, or Bergen or Essex County...and on and on.

The game is ususally called "beggar thy neighbor" and the losers are all those who play.

The problem here is that we live in a regional economy that doesn't really care about artificial boundaries on a map. Services are regional. People play, shop, and live regionally. New York's loss is our loss, and our loss is New York's loss.

Thieving a few hundred jobs from NYC at the cost of tax avoidance schemes doesn't help the regional economy. Having large businesses threaten to leave Manhattan for New Jersey and receiving heavier subsidies from NY doesn't help the regional economy. Instead, NYC and Jersey City and both states need to be working together to bring new businesses to the region and stop the unproductive game of undercutting the other.

More importantly, the region needs to work towards ensuring jobs are created in transit accessible urban centers rather than in outlying office parks. Urban centers like Jersey City, Newark, Long Island City, and of course Manhattan mean employees are more likely to use mass transit, which in turn means less investment in expanding highways and roadways. Dense urban centers also means protecting the watershed that quenches the population's thirst, and allows for more locally grown produce to feed us.

Instead of focusing on the our state / their state mentality, we need to look at how we can be mutually beneficial components of a larger system. A Manhattan address has the prestige that can lure businesses to the region, and Jersey City has the inexpensive commercial real estate that can make the move affordable. We don't need to go back and fourth driving down tax collections from businesses that area already in the region.

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Did J.P. Morgan Chase reduce the number of jobs in Jersey City? In that case, we don't have an increase of 1600 jobs.

Getting 1,600 jobs in JC is great and doubtless some of those folks will relocate to NJ (and pay taxes here). What many people don't realize is that "subsidies" are typically breaks on taxes rather than cash payouts. So the choice comes down to getting nothing (if the business doesn't relocate) vs. getting a lot but less than one would theoretically get via high taxes.

With respect to the New Jersey Policy Perspective (http://www.njpp.org/aboutus.html), their web site clearly describes them as big government lovers:

"Our efforts reflect these fundamental principles:

* Government has an active role to play in helping people reach their full potential.
* Reliance on the market isn't enough to bring prosperity to all.
* A strong public sector is the cornerstone of a civil society.

New Jersey is at a crossroads. It's not clear that the gains of the past will be protected or that the building process, far from complete, will continue."

The "gains of the past" in recent NJ history - really? It seems that a lot of those "gains" have resulted in NJ having to bribe companies to come here rather than have a more business friendly environment than even NYC.

Quote:

Yeah, it's a pretty big deal. It's just one more notch on the JC belt that will lead to critical mass (at some point). Once that happens, the city and state will no longer need to extend tax incentives. This eventuality will require a few catalysts. Goldman was one, this is another (and there have been a few others).

One wonders if the non-partison thinktank has incorporated this point into their research calculus.

1600 to such a small area around newport is significant. It should have a measurable impact to the area across all levels, not sure how much benefit they will bring to the other parts of jc though.

UPDATE 1-Clearing firm to move 1,600 jobs to Jersey City from NYC

Tue Oct 13, 2009
By Joan Gralla

NEW YORK, Oct 13 (Reuters) - New Jersey has succeeded in persuading the Depository Trust & Clearing Corporation to move 1,600 employees to Jersey City from Manhattan, starting in 2013, Governor Jon Corzine said on Tuesday.

Depository Trust & Clearing Corporation, which settles and clears equity, debt and derivative trades, will receive various financial incentives as part of the deal, Corzine said in a statement.

These include a job creation grant worth about $75 million.

The company may receive nearly $15 million of grants to customize the Jersey City building in the Newport area near the Hudson River, pending approval by the Economic Development Authority, a spokeswoman for the authority said.

In return, New Jersey expects to receive about $100 million in corporate business taxes over 20 years -- the term of the lease -- and $186 million in personal income taxes, said the authority spokeswoman, Nicole Royle.

But the subsidies were criticized by a nonpartisan research group called New Jersey Policy Perspective. The group said the state offered Depository Trust & Clearing Corporation many advantages that even the company cited, from lower cost real estate to mass transit.

Referring to the office complex, Naomi Bressler, a policy analyst for the nonpartisan New Jersey research group, said that "although the addition of new jobs to the state is always welcome news, we are concerned that providing Newport with nearly $12 million and Depository Trust & Clearing Corporation with another $74 million in tax breaks that should be going to the state will further hurt New Jerseyans."

Depository Trust & Clearing Corporation said it will keep 700 employees in lower Manhattan, as "part of its ongoing and long-standing commitment to New York City and State."

New York City and New Jersey often compete to attract financial companies with high-paying jobs.

A spokesman for New York Mayor Michael Bloomberg had no immediate comment. Both Corzine, a Democrat, and Bloomberg, an independent, will stand for re-election in November.

After the Sept. 11, 2001 attacks, many financial firms in Lower Manhattan relocated employees to midtown as well as to Jersey City and the surrounding suburbs, although some returned to Manhattan in subsequent years.

In a separate statement, the Depository Trust & Clearing Corporation said it had finalized an agreement with the New York Stock Exchange for a new derivatives clearing arm, called New York Portfolio Clearing. The joint venture should be running by the second quarter of 2010, depending on regulatory approvals.

=========================

WALL STREET GIANT
1,600 finance jobs coming to Jersey City

Wednesday, October 14, 2009
By MELISSA HAYES
JOURNAL STAFF WRITER

Nearly $90 million in incentives did the trick.

After trying for more than a year to woo a Wall Street giant across the Hudson, Gov. Jon S. Corzine joined local officials yesterday to announce the Depository Trust & Clearing Corporation is bringing 1,600 finance jobs to the Newport Office Center in Jersey City.

"This is a very good day," Corzine said, standing in front the company's future home at 570 Washington Blvd. "I'm almost troubled that it is in the midst of a political campaign because this is something that is real for this city, county and state."

The company holds the assets for most major banks and handled more than $1.88 quadrillion in securities transactions last year, officials said.

It will occupy a 12-story building that housed J.P. Morgan Chase, which is moving across the street.

DTCC plans to renovate the 415,000-square-foot office, including converting a floor of parking into office space, before moving employees in 2013.

New York and New Jersey fought over the company, which decided to keep 700 jobs, including its executives, at its headquarters at 55 Water St. in Lower Manhattan.

DTCC president and chief operating officer William Aimetti described the company as "the most important Wall Street firm you've never heard of," and said he looks forward to the move.

"New Jersey offered us a friendly business climate and convenient location," Aimetti said.

Mayor Jerramiah T. Healy welcomed the company and said the city is contributing $1 million in Urban Enterprise Zone relocation grants over four years.

Why shouldn't NJ do their best to compete with NYC? Mayor Bloomberg has been bitching about this too. The problem for both is that the real competition is coming from other states with fewer "essential services" and lower taxes that nonetheless offer a similar talent pool at lower cost.

A further problem is that both NYC and NJ are attempting to incent big companies to stay/move without addressing their structural spending/taxation problems. The high cost of doing business here is driven by taxes and trying to avoid addressing this by bribing large companies only makes smaller businesses pay more. To the extent that they can, they will leave.

I read this article a couple time to figure out if they were taking about JC or not, but it's not very specific. Could be Secaucus, Mahwah, Morristown, or any other corporate park-like town now plastered with commercial leasing signs trying to woo the big guys over from NYC.

Unless I am missing something, which is entirely possible. If so, I trust y'all to correct me.

New Jersey Takes Another Run at a Major New York Employer

New York Times
By CHARLES V. BAGLI
Published: February 20, 2009

The cross-border war for jobs is heating up again.

New Jersey has offered the Depository Trust and Clearing Corporation, a major employer in Lower Manhattan, a lucrative subsidy package if it moves its offices and 1,600 employees to the west side of the Hudson River.

State and city officials in New York are also negotiating with Depository Trust over enticements to keep the company?s main offices at 55 Water Street, where its lease expires in 2012.

The competition for jobs among New York, New Jersey, Connecticut and Pennsylvania were relatively quiet during the boom years. But with layoffs coming by the tens of thousands and corporations suddenly in a cost-conscious mode, governments are once again outbidding one another for employers. And critics contend it is at taxpayers? expense.

Earlier this month, the New Jersey Economic Development Authority granted tentative approval for a 10-year grant to Depository Trust, worth an estimated $74.6 million, under the state?s business employment incentive program. The grant would be based on a rebate of state income taxes should the company move to New Jersey, according to Glen J. Philips, a spokesman for New Jersey?s development authority.

Depository Trust holds, clears and trades securities for brokerage firms and banks; it is intimately connected to the business of Wall Street.

Stuart Z. Goldstein, a managing director of Depository Trust, confirmed that the company was exploring its options, but said that it was early in the process and that no decisions have been made.

Depository Trust may be the kind of company Mayor Michael R. Bloomberg had in mind on Wednesday when he discussed the city?s job initiatives and competition across the Hudson. ?The State of New Jersey, unfortunately, has been recruiting our companies here in New York City very aggressively,? he said, ?and we?re working as hard as we can to keep them here.?

Or, real estate brokers say, he could have been referring to ImClone Systems, a biotechnology company acquired by Eli Lilly last year for $6.5 billion. ImClone has offices downtown on Varick Street, although some officials are trying to lure the company to the city?s nascent East River Science Park in Manhattan. The brokers said that New Jersey is also wooing ImClone, which has offices in Branchburg, N.J.

New Jersey usually trumpets its lower taxes and office rents, although rents are falling sharply in New York. Critics say that no one wins when states compete against one another by offering increasingly large tax breaks.

?Cross-border wars in the metropolitan region are truly counterproductive, since this is one economy where governments should be working in sync,? said Kathryn S. Wylde, president of the Partnership for New York City, an alliance of the city?s largest companies. ?During a recession and fiscal crisis, when the public sector can barely afford to maintain essential services, it makes no sense to drive up the cost of business incentive packages.?

In the past, New York companies routinely visited potential office sites in New Jersey to leverage subsidies from New York. With the exception of subsidies for Goldman Sachs and the New York Yankees, Mayor Bloomberg has been far more stingy on this front than his predecessor, Rudolph W. Giuliani.

?We take the potential loss of any employers seriously and actively engage with these companies,? said David Lombino, a spokesman for the New York City Economic Development Corporation. ?In the long term, we?re confident that our strategy ? to invest taxpayer money to keep the city a place businesses want to be, rather than competing with other cities? offers of incentives ? will generate the greatest return for New York?s taxpayers.?

This is not the first time that Depository Trust has gone to the public well. Fourteen years ago, Mr. Giuliani gave the company a tax break worth $18.5 million after the company threatened to leave New York.

?We were strongly wooed by New Jersey, and without the incentives, we just can?t justify what the cost of the lease would have been,? Edward McGuire, corporate secretary of Depository Trust, said in June 1995.