A Wall Street investment firm passed over Charlotte for Nashville, Tenn., for its new corporate headquarters at least in part because of the Queen City’s existing financial services base.
Records obtained by the Charlotte Business Journal shed some light into the process for the pursuit of AllianceBernstein (NYSE: AB), code-named Project Stella in emails and other records.
An email from a business recruitment manager at the Economic Development Partnership of North Carolina dated May 1 confirmed that Charlotte had lost the project to Nashville, the same day media outlets began reporting the news.
AllianceBernstein’s project involved 1,050 jobs and capital investment of $69.2 million, according to the EDPNC email. The relocation would have been a big win for any city but seemed a suitable match for Charlotte, which has an established reputation of being the Southeast’s banking and financial services hub.
However, as the May EDPNC email confirmed and was previously alluded to by the CBJ, the “exisiting (sic) strength of the financial services industry in Charlotte” meant the company would have the “ability to be a newer, bigger player in Nashville.”
The email also said Project Stella was filed under “Excessive Land/Building Costs” as the reason for the loss. Construction and land pricing are on the rise nationally, including in Charlotte, with price-per-square-foot rates in office space continuing to rapidly grow, particularly in new construction projects. Because of the scope of AB’s investment, the company would likely have needed to kick off a new tower had it selected Charlotte for the project.
In Nashville, it appears AllianceBernstein has zeroed in on the site and downtown project it will occupy, according to the Nashville Business Journal, a sister paper of the CBJ. AB is said to have chosen the $430 million Fifth + Broadway mixed-use development, in which Charlotte real estate developer The Spectrum Cos. is a partner.
Another email dated Jan. 30 said a phone call between the CEO of AllianceBernstein and Gov. Roy Cooper was scheduled for the next day. Proposals for Project Stella were being actively discussed late last year, according to correspondence between North Carolina business recruiters. Charlotte was the only listed city in North Carolina under consideration for the project.
In early November of last year, AB was projected to add 809 jobs averaging $105,000 in annual salary over four years, according to an email from Newmark Knight Frank, the brokerage firm that worked with AllianceBernstein on its real estate search. That headcount has now topped 1,000 — its portfolio management, research, trading and private-wealth management businesses will stay in New York but most everything else, including top leadership, will relocate to Nashville.
In the fall, AllianceBernstein had Atlanta, Dallas and Omaha, Neb., as other cities being considered for the relocation, with Charlotte being seen in North Carolina as having a competitive advantage because of the presence of AXA, AllianceBernstein’s majority owner. By November, Atlanta and Charlotte were finalists, according to a project briefing memo.
In fact, as the NBJ has reported, Nashville wasn’t on the company’s radar initially, when it had 30 cities listed as potential new headquarters locations. Seth Bernstein, CEO of AllianceBernstein, said in Nashville that the relocation to Tennessee would allow AB to offer advantages it “simply couldn’t do in the New York City metropolitan area,” such as lower taxes and housing costs and a higher quality of life.
A response to AB’s request for proposals was due Nov. 14. CBJ obtained the RFP, which listed a 200,000-square-foot Class A facility with room for expansion or a build-to-suit opportunity as site requirements for AB. “Critical location factors” included labor availability and cost, “regulatory and environmental permitting and procedures at all government levels compatible with the specifications and expedited timelines of the project,” excellent amenities and vibrant quality of life.
In Charlotte specifically, AB had identified “real estate opportunities” in uptown, the University area, Ballantyne and SouthPark.
The N.C. Department of Commerce declined to provide information about state incentives offered to AllianceBernstein, citing a provision in N.C. law that says only “requests for discretionary incentives” may be disclosed if a business decides not to expand or locate within the state or does not receive the incentives.
A letter from the city of Charlotte’s economic development office indicated AB would likely have been eligible for a five-year Business Investment Program grant, with a preliminary estimate putting it at about $1.6 million over five years jointly from the city and Mecklenburg County.
Another letter indicated AB was interested in the N.C. Community College System’s customized training programs. The program partners companies and community colleges around the state with customized plans for workforce development, which could include pre- or post-employment training.