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The Tally Ho

Tuesday, July 13, 2004

Citigroup Leaving Manhattan

Did you catch NY Times writer Charles V. Bagli's article today titled "Citigroup to Move Employees"?
Citigroup is moving more than 1,000 employees to New Jersey from Lower Manhattan, according to government officials and real estate executives, in a major realignment that raises new doubts about the pace of economic rejuvenation downtown.

The bank also is expected to announce today that it is moving more than 700 employees from Midtown to Long Island City, Queens, where it plans to build a 14-story office building across the street from its 48-story tower at Court Square.

That move could solidify a 15-year effort to create a less costly office district in Long Island City that can compete with Jersey City and stem the flow of jobs leaving New York. But at least in the short term, the bank's realignment hurts Lower Manhattan, where, nearly three years after the Sept. 11 terror attack, there is plenty of vacant space and corporations are still skittish about making commitments.

While this is good news for Jersey and Queens, if this trend continues the future of lower Manhattan and the tax base of the city will be negatively affected. Midtown and Lower Manhattan are transportation hubs whereas there are limited transportation options to Jersey City and Queens. Remember a few years ago when the NYSE was considering moving out of the city? Lowering property taxes to pre-Bloomberg levels is one thing that should be done (how about abolish it altogther?), but it wouldn't change what seems to be a trend. Why they are planning on building oversized buildings at the WTC site is a good question. If a higher vacancy rate exists, why are we adding more offices instead of attracting new businesses into those spaces? One could make the argument that spreading the wealth is good for the boroughs, but it seems like much of the Northeast around NYC is this "post-suburban" living. How much cheaper is Long Island, West Chester County, North Jersey, and Southern Connecticut than much of Brooklyn and Queens? In any case, the article ends with this:
Charles A. Gargano, chairman of the Empire State Development Corporation, declined to discuss details of Citigroup's plans. But, he added, "I was assured that the space in Lower Manhattan would be backfilled by high-paying jobs over the next several years."

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