By Divya Watal
Computer Generated Solutions, Inc., a 20-year-old New York-based technology company located in Midtown Manhattan, plans to move its headquarters to 3 World Financial Center in Battery Park City.
“It’s quite unique for C.G.S. to relocate its corporate headquarters from Midtown to Downtown,” said Stephen Eynon, a broker at CB Richard Ellis, the real estate firm that negotiated the deal on behalf of the firm. Most corporate headquarters are clustered in Midtown, which makes the move an uncommon one.
“I personally felt we had to make a statement,” said Phil Friedman, the computer firm’s C.E.O. “We’re moving to Downtown, across from the World Trade Center, to show that we will overcome.” He added that lower rental costs and financial incentives make relocation more attractive.
“It was a depressed area, but now it’s coming back,” said Friedman, adding that his company will help Downtown by generating high-level technology jobs in the area.
C.G.S. has signed a 10-year lease and will occupy the 27th floor of the 51-story 3 World Financial Center tower, one of four towers in the complex. The eight million square feet office-tower complex already houses Merrill Lynch, Dow Jones, Deloitte & Touche, and American Express, but there is still a considerable amount of vacant space left.
Companies that employ more than 200 people receive government incentives if they relocate to a site below Canal St. Businesses must be willing to create new jobs in Downtown and retain them for a minimum of seven years, stipulates the “WTC Large Business Job Creation and Retention Program.” The deadline for these incentives is December 31, 2004.
Relocated companies receive tax benefits in the first year of ownership, such as an additional 30 percent deduction for office equipment, new technology, and other depreciable property. Their taxable burden decreases by $59,000 ($35,000 higher than normal) for each year until 2006. They can depreciate leasehold improvements over five years rather than the usual 39 years, generating major savings. In addition, the companies’ electricity transportation and delivery costs decrease by as much as 45 percent for eight years.
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