UBS Will Remain In Stamford For Five Years & $20M
by Christine Stuart | Aug 23, 2011 4:05pm
(9) Comments | Commenting has expired
Posted to: Business
STAMFORD—The rumors UBS would be leaving Stamford started swirling shortly after Gov. Dannel P. Malloy was sworn in as governor, so he was excited to announce Tuesday that the company would maintain 2,000 jobs in Connecticut.
Currently there are about 3,500 UBS employees in the state and UBS officials were adamant about not releasing the number of employees in any specific location, including their Stamford office.
The news comes the same day the financial services company announced it was laying off 3,500 employees in its global banking operations to reduce its costs by $2 billion. Almost half of the job cuts will be in the investment banking division. The remaining cuts will come from the wealth management and asset management businesses, according to a company press release.
The company which moved to the state during Malloy’s tenure as mayor was unable to announce it was creating jobs, so it will not be considered a “First Five” company. In order to qualify for those incentives the company must promise to create 200 jobs over a specific period of time.
However, it will receive a five year no interest, or low interest loan of $20 million. Connecticut economic development officials refused to disclose how exactly the loan is structured and it was described by Malloy as a “forgivable loan.”
Phil Lofts, CEO of UBS Americas, said the $20 million will be spent on infrastructure improvements and computer upgrades. He said Malloy and the attention he paid to the company had a lot to do with the company’s decision to stay in the state.
“This recognition, as well as the benefits that accrue to that presence, were significant factors in our decision making process around our real estate holdings,” Lofts said at a press conference in the lobby of the building. “UBS will continue to maintain our flagship trading floor and substantial operations across Connecticut.”
The investment was touted by Malloy as a good investment because if UBS had packed up and left the state would lose $70 million in direct and indirect tax revenue. If the company had gone Malloy would have struggled to maintain an image as a governor able to create jobs.
UBS officials refused to disclose how many employees work at the Stamford location with the flagship trading floor that spans two football fields, but they estimated about 3,500 employees work in Connecticut and 16,000 to 17,000 in the tri-state area.
In July New Jersey gave UBS a $27 million tax break to keep about 2,000 of its employees in that state. According to news reports UBS threatened to move the jobs to Connecticut or New York. Reuters reported that disappointing profits discouraged the company from continuing discussions about moving to Tower 3 at the World Trade Center site.
Complaints about the quality of life in Connecticut for younger investment brokers and rumors UBS would move its Connecticut operations to New York continued for most of the Spring.
“We been able to retain good talent. We’ve enjoyed working here and being part of the community,” Lofts said dismissing the rumors. “Connecticut clearly provides a very educated workforce for us.”
Malloy said the Swiss banking company’s decision to maintain a significant presence in Connecticut is important and adds to the number of financial service companies that call the state home.
Malloy said one in 10 employees in the state are employed in the financial services industry.
UBS moved its Americas headquarters to Stamford from New York in 1997 when it received tax incentives from the state. That 10 year deal expired this year, but the new $20 million loan extends that deal five more years.
Catherine Smith, the state’s economic development commissioner, said the original 10 year deal required them to create 2,000 jobs in the state and they created many more than that. She said the same thing can happen this time.
Tags: UBS, labor, layoffs, first five, Malloy, Lofts
(9) Comments
posted by: Disgruntled | August 23, 2011 5:24pm
MattW…you GET to pay increased taxes and enjoy reduced services.
I drove by and saw the Nutmeg Kings polished limo outside UBS. Or I assume it was his. The mayor had to waddle over a block or two for this non-announcement.
Pathetic. The place is a ghosttown. And for that they get $20MILLION?!
Corporate welfare at its finest. I hate to tell Dan this but UBS is GONE. He is throwing good money after bad and the gutless legislature is letting him do it. At some point SOMEONE has to put a leash on the man. He is a loose cannon.
posted by: Disgruntled | August 23, 2011 5:34pm
My hero! The Nutmeg Rocky!
But a few words of caution…
Like any relationship,when you have to pay for it,something is wrong and one might consider avoiding it and cutting your losses.
“I wasn’t going to stand by and lose $70 million a year for the next five years without putting up a fight,” the governor said of the impact UBS leaving would have on the state.”
posted by: GoatBoyPHD | August 23, 2011 5:52pm
Imagine if Rowland said “I’m giving UBS a $20 million dollar forgivable loan and I won’t disclose the details or how many jobs will be saved or how the loan will be forgiven.”
Even at his worse Rowland wasn’t that arrogant.
posted by: Upset.Citizen | August 24, 2011 6:05am
Tax payers beware and heads up state workers! I see a 2014 (or sooner) concessions deal in the works!
posted by: ctperson13 | August 24, 2011 6:54am
This guy has been in office for 8 months, and how many millions in corporate welfare has he handed out already? Many millions via the “First Five” program. This $20 million, which he doesn’t even bother to pretend is anything more than a giveaway. The millions in overpayments for land for the busway, and who knows how much more in connection with his “Big Three” bad ideas—UConn Health Center, busway and Route 11. Meanwhile, what has he done for the average CT citizen? Taken away union benefits, raised our taxes on everything under the sun, and eroded our safety by shutting down prisons and laying off troopers. Whose side is this guy on? Can we really afford to wait out another three-plus years of this guy? What will be left here for the average citizen?
posted by: Disgruntled | August 24, 2011 7:58am
Rowland and $20M ?! He would have skimmed off five for himself to buy a new Mustang and a cottage. Connecticuts own Rod Blagojevich!
As for UBS:
“Corporate tax incentives like [those for UBS] just give the illusion that the governor is proactive and doing something,” said Richard Pomp, a law professor at the University of Connecticut. “But 30 years of research suggests throwing money at a company is just a waste of money because businesses would have done what they were going to do anyway.”
posted by: Disgruntled | August 24, 2011 6:15pm
Just spoke to a friend who works at UBS and is now commuting down to the city.
He was laughing at Malloy for his stupidity and the $20M gift to the company.
Holy cow!
Are we Nutmeggers getting shafted by King Dan,or what?
posted by: Disgruntled | September 18, 2011 10:27am
UBS had $2.6 billion set aside for the end of year bonus pool.
Hmmmmm. I guess that is about shot! Not as many fancy dinners in Fairfield County but the real question is—WILL THERE EVEN BE A UBS SOON? The bank will probably spin off the investment side and Connecticut taxpayers will be left swinging in the breeze thanks to Dan.
I said a long time ago that rolling the dice,and offering “incentives” on an outfit like that (as Dan did when he was mayor) was bad news. The HQ in Stamford is a ghost town and will probably have a for FOR SALE sign one day soon. A very difficult property to get rid of.Far harder than the school they tore down to build the place! An even better clue will be when MORTONS closes and Dan has to remove the contents of his wine safe (if he has not done so already)to the safety of Hartford.
FIRST FIVE JIVE is dead! Long live FIRST FIVE JIVE!