CSX confirms in letters to the Downtown Investment Authority that it wants to bring 550 employees Downtown to the Bank of America Tower, if the DIA can work with the landlord to make the move from Southside work financially.
That gap as of Jan. 6 is $1.9 million over the seven-year lease term, down from $2.7 million in a November request.
CSX said with an arrangement, it is prepared to enter into a lease for 120,000 square feet of space over multiple floors at the tower in the city’s urban core.
In a Jan. 20 report to the city, Wallace said DIA staff has discussed job expansion opportunities with CSX. He said Friday he is waiting for Jacksonville-based CSX to get back with the DIA.
The Nov. 30 and Jan. 6 letters from CSX Real Property Inc. President Richard Hood says as CSX has discussed with Wallace’s office, “CSX is under pressure to reduce its overhead costs company-wide.”
It is considering consolidating its operations that have occupied two adjacent buildings in Southpoint for more than 25 years.
CSX has looked at numerous alternatives across the Southside and Downtown, and “has fully negotiated its best deals,” he wrote.
All else being equal, he wrote, CSX would like to bring the employees to the tower at 50 N. Laura St.
That would be in addition to the employees working in CSX’s Downtown headquarters buildings at 500 and 550 Water St.
“Unfortunately, all is not equal, and while comparing alternatives is very subjective with plusses and minuses, some issues do come down to cost,” Hood wrote.
The Nov. 30 letter said an additional $387,000 a year, or $2.7 million over the seven-year lease term, is the “indifference point versus Southside options.”
However, the Jan. 6 letter from CSX said further work by the owner, CSX staff “and a deeper understanding of the financial limitations of the DIA” resulted in a modified request of $271,000 a year, or $1.9 million.
Hertz Investment Group owns the 42-story Bank of America Tower.
James Ingram, Hertz Investment Group executive vice president and chief investment officer, said in late December the company was planning for 100,000 to 140,000 square feet for CSX, although he was waiting to hear “something positive” from the company.
A lease of that size would help fill the approximately 660,000-square-foot tower, where 200,000 square feet is available for tenants, he said then.
Ingram also said the lease would boost the tower from 70 percent leased to 85-88 percent, creating the property’s largest single tenant.
He did not respond to requests for comment late last week.
Ingram said previously CSX would move by the middle of the first quarter of 2018.
CSX spokeswoman Kristin Seay issued a statement in December that as part of the company’s initiative to continually operate more efficiently and reduce overhead costs, it is terminating its lease of the two adjacent Southpoint office buildings in March 2018.
On Thursday, she sent an email that CSX continues to explore opportunities across Southside and Downtown to meet its current space needs in the most cost-effective sites available.
CSX said in mid-December the workers to be moved are in the company’s finance, technology, labor relations and corporate real estate organizations.
Wallace said previously the authority was approached in mid-October about a possible move and he hopes to complete a deal in the first quarter.
He also said CSX was “sincere about looking Downtown” and was adamant it be on the Northbank.
The incentives would have a $1.9 million maximum indebtedness to the Northbank Community Redevelopment Area.
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