New York City steps in to help beef up the downtown area. This time by giving quite a large incentive.
Company's move follows other major media companies. Conde Nast will be a Time neighbor.NEW YORK DAILY NEWSPublished: Thursday, May 22, 2014, 11:13 AM
Another publishing giant is moving downtown.
Time Inc. will get $10 million in taxpayer subsidies to relocate from its iconic Midtown office to a new space at Brookfield Place in Lower Manhattan in late 2015.
The company announced Thursday it had inked a deal for a massive 700,000 square feet, six full floors, at 225 Liberty St., citing the neighborhood's "alluring mix of restaurants, retail, culture and transportation access” and, more important, the “incentive package” given to the company by state economic development officials to stay in the city.
The company has been at the Time & Life Building at 1271 Avenue of the Americas at 50th St. since 1959.
"We spent months evaluating competing sites in New York and New Jersey,” Time CEO Joe Ripp said in a statement. “In the end, the downtown Manhattan location, Brookfield Office Properties' plans for Brookfield Place, and the incentive package we received from Gov. Cuomo and Empire State Development drove our decision to stay in New York City.”
[caption id="attachment_1673" align="alignright" width="300"] Time Inc. will abandon its iconic Time & Life Building location in Midtown and decamp to Lower Manhattan in 2015, the company announced today. An incentive package from the state sealed the deal.[/caption]
Time received a $3 million tax credit to refurbish the space in the relatively new building once known as the World Financial Center, said a source close to the deal. The company will also get a $7 million state grant for retaining jobs.
Such handouts are common as city and state officials complete the post 9/11 redevelopment of Lower Manhattan. At nearby 1 World Trade Center, for example, the state gives some tenants as much as $8 per square foot, said Jordan Barowitz, director of external affairs at the Durst Organization, the building’s developer.Time declined to comment on the specifics of the incentive package or how much it’s paying for the space. Rents in the building start at around $50 a foot, according to real estate data firm Compstak.
The deal follows fellow publishing giant Conde Nast's decision to relocate downtown to the World Trade Center later this year.
Creative tenants are driving the office market downtown. Nearly half of all companies that have moved to the Financial District since 2011 have been in the technology, advertising or media sectors, according to the Downtown Alliance.
"There is no better place for a premier media company to do business than in New York City — the media and creative capital of the world-and we are proud of our efforts to keep Time Inc. right where they belong, in the Empire State," said Kenneth Adams, president and CEO of Empire State Development, the state’s business-boosting agency.
Mitch Steir, Michael Colacino, Matthew Barlow and Howard Nottingham of commercial brokerage Studley represented Time in the deal. Brookfield was represented in-house by Jerry Larkin, David Cheikin and Alex Liscio.
Critics will be quick to question a job retention incentive package for a company like Time Inc., which would seem unlikely to leave New York, but brokers said the deal made sense.
"Companies have to be in New York — but not for their entire operations," said Mark Weiss, a principal at brokerage Newmark Grubb Knight Frank. "More and more of our clients are bifurcating their operations to save money."
Time could easily have shipped off its tech and administrative staff to New Jersey without impacting its New York-centric brand, another broker said.