| Company | Travelers/Smith Barney (multiple recipient) |
| Deal closed | 9/20/1995 |
| Project Site | 65 East 55th Street, Manhattan |
| Competing Sites | ? |
| Maximum Subsidy | $22,101,000 |
|
$15,300,000 |
|
$6.8 million
($1,000/employee/year) |
| Type(s) of City benefits |
Sales tax exemptions |
| Benefits from New York State | ? |
| Benefits Distributed to Date (according to LL69 Report FY 2002) | 0 |
| Promised Job Retention | 8,970 |
| Projected job growth | 2,100 |
| Total Jobs | 11,070 |
| Jobs Reported in LL69 Report FY 2002 | 8,970 |
| Layoffs | In the wake of the 1998 merger of Citicorp and Travelers Group Inc., the merged company, Citigroup, eliminated about 400 jobs at the Travelers brokerage division, Salomon Smith Barney. |
| Length of Contract | 15 years |
| Project Purpose | The Giuliani administration offered financial services firm Travelers, Inc. this $22.1 million package to keep 8,970 Travelers employees in New York -- most of them employed at the company's brokerage division, Smith Barney. |
| Clawbacks? | If the company lays off between 5% and 25% of its employee base, future benefits will be reduced. For layoffs of between 25% and 40%, benefits will be suspended until employment rises to 75% of the base number. For layoffs of over 40%, the deal is terminated. Transfers out of the city of below 10% can trigger recapture penalties. Over 10% will cause benefits to be terminated, recapture to be assessed, and the agreement to be terminated. |
| Background/Since then | Many in the real estate industry reportedly did not believe that there was a real threat that Travelers would leave Manhattan: The company had bought another brokerage house, Shearson Lehman, just a year earlier, acquiring Shearson's 1.2 million square-foot office building in Tribeca, which Travelers had already decided to use before the city provided the subsidy. This deal represented a second helping of subsidies for Travelers, which also inherited from Shearson Lehman tens of millions of dollars in tax credits and low-cost electricity under a deal struck in the mid-1980's. |
| Corporate Notes | Travelers merged with Citicorp in 1998. Salomon Smith Barney was itself the product of Travelers Group's earlier acquisitions of Salomon Bros., Smith Barney and Shearson Lehman. |
| A note on sources -- Information in this deal comes from GJNY's examination of project agreements obtained through Freedom of Information Law requests, as well as news reports, minutes and notes taken at board meetings, and communication with our allies. The entries are a work in progress. For more information about the documentation behind GJNY's database, or to let us know about any developments that are not yet reflected here, please contact us at gjny@ctj.org or (212) 414-9394. | |
| Date last updated: 2/4/04 | |