by Mike Sharkey
Staff Writer
Sometimes an offer is simply too good to pass up regardless of the current business and personal climate. And that’s exactly what CitiGroup may be facing when its current lease in Baymeadows expires in a couple of years.
According to State Sen. Jim King, the City of Birmingham is poised to lure CitiGroup and its 11,403 employees statewide from Florida. The bait? An economic incentive package that essentially can’t be matched through any combination of state and local incentive packages — $100 million for 10 years, including grants, tax breaks and low-interest loans.
Locally, CitiGroup employs about 4,000 people at its Baymeadows credit card call center office, one of 10 such offices in the nation, with Jacksonville being the largest. Because King’s constituency includes Jacksonville, he became concerned that a major employer in the area could leave. As a state senator, he’s also looking out for the other Florida communities that could be affected.
Once he learned of the Birmingham offer, King immediately notified Gov. Jeb Bush and Mayor John Delaney seeking their input.
“I got the feeling that CitiGroup nationally was looking elsewhere and that there were cities blowing in their ear,” said King. “They have a significant number of employees in the state and here in Jacksonville and I wanted to make sure Mayor Delaney and Gov. Bush knew about it. I want to make damn sure we don’t lose somebody we already have.
“I have gotten a lot of input from the governor and his economic development people to see what kind of package we can put together. The only reason I haven’t talked to Mayor Delaney is because I’ve been out of town.”
Delaney said there were two major hurdles that must be considered locally.
“One, for existing companies, it’s very difficult to utilize economic incentives,” said Delaney. “And, two, CitiGroup is in a part of town that we do not use incentives. There are exceptions and I have always said there could be exceptions.”
Because a vast majority of the Jacksonville Economic Development Commission-approved incentives go to new and existing companies north and west of the St. Johns River, and CitiGroup is located on the Southside, it will be difficult at best to create any kind of package that might appeal to CitiGroup. Delaney said he was relying on two things to keep CitiGroup not only in Jacksonville, but in Florida. One, everyone associated with the Jacksonville office seems to love it here and, two, moving an entire office and that many people is a complicated, time-consuming process that could be more trouble than it’s worth.
“We want to give them a reason to stay,” said Delaney. “The employees are happy, they are good corporate citizens and they are good people. I think we’re going to make it happen.”
Bruce Reid, a corporate spokesperson for CitiGroup in Jacksonville, agreed with Delaney’s assessment of CitiGroup’s relationship with Jacksonville. However, he conceded that the decision would ultimately be made by executives at CitiGroup’s headquarters in New York City.
“We are starting to look at long term location options, that’s pretty obvious,” said Reid. “We do that from time to time. We have been in Jacksonville 12 years and we are simply looking at the economics of business and what makes the best sense for us. Our options remain open at this time. We’ve been in Jacksonville for 12 years and we are very pleased. It feels like home.”
CitiGroup came to Jacksonville in 1990 as AT&T Universal Card with a very small staff that issued Visas and Mastercards over the phone. The initial response was so overwhelming that the company was forced to grow exponentially during the first several weeks.
“We started with zero employees and had a couple hundred by the end of the first week,” said Reid. “Within 78 days we had over one million accounts. In the first 24 hours of being open we had 250,000 calls from customers wanting cards. Our expansion began almost overnight. Within the first year we had in excess of 2,000 employees.”
In 1997 the company was purchased by CitiCorp, which became CitiGroup in 1998. Despite the corporate and name changes, Reid said executives remain as enamored with Jacksonville today as they were years ago when the company was initially looking at Jacksonville.
“It has a very good labor market,” said Reid of why Jacksonville was chosen over other cities. “Plus, AT&T American Transtech was already here. They are a division of AT&T and were already in town with 4,000 to 5,000 employees just down the road. It was very attractive to join them.”
King said he will do everything he can to keep CitiGroup in Jacksonville but admits he needs some help. The City’s current economic incentive structure will make it very difficult to divert funds from the areas the JEDC focuses on to other parts of town. King said he hopes he can convince Delaney to shift some incentive money to the Southside in order to save the CitiGroup office.
“Even if it’s marginal, some local money would help,” said King. “Something this size, we need to keep here. Our guys have talked with CitiGroup and it’s not a matter of them leveraging us, it’s just us figuring out a way for them to stay. They are thinking about building an office in Jacksonville, unfortunately it’s not on the Northside.
“They are not asking us to match what Birmingham can do. They are just asking us to show them good faith.”
Reid stressed that the decision is one corporate will make and regardless what is decided, it will in no way reflect negatively on Jacksonville.
“The decision will not be made overnight and I want to emphasize that we have been very pleased with Jacksonville,” said Reid. “It is in the review process and the project will take time.”