Friday, February 27 2015
The company will generate 1,000 jobs with an average salary of $82,000
Tempe, AZ -- Chicago-based private banker Northern Trust will open a $95 million office complex and bring 1,000 jobs to Tempe's Discovery Business Campus as part of a deal struck with the Arizona Commerce Authority and the city.
Northern Trust is expected to occupy about 450,000 square feet in three new buildings near the northwestern corner of Elliot Road and Loop 101, with the first building ready by December. The company could begin filling a second office tower by 2018 and finish the complex by 2021, according to a Tempe government report.
State and city officials rolled out incentive packages to help lure the 125-year-old financial institution to the Valley, including a $4 million grant from the Arizona Commerce Authority's "Arizona Competes Fund." The grant comes with two major conditions: Northern Trust must make $26 million in capital investments and generate 1,000 high-wage jobs within three years, ACA President Sandra Watson said.
Tempe is offering a 20-year agreement with Wentworth Property Co. to offer lower property taxes for the Northern Trust site, saving the bank about $7.3 million over the term. In exchange, Northern Trust will pay about $7.3 million for naming rights at the Tempe Center for the Arts. The Tempe City Council approved the deal at its meeting on Thursday.
The Discovery Business Campus in Tempe was previously owned by Freescale Semiconductor and was sold to Wentworth Property Co. in 2011. While Freescale maintains its presence within the 136-acre complex, Wentworth has taken the lead in developing the surrounding property.
Landing Northern Trust is the most recent in a string of development successes at the Discovery Business Campus and in Tempe in general.
A new office for Shutterfly is under construction next door to the future Northern Trust site and should be open by May, according to Wentworth Managing Director Tim Chester. The developer also is working on a deal that would bring two national-brand hotels, Wentworth co-owner Jim Wentworth Sr. said.
Tempe has also landed State Farm regional headquarters along Tempe Town Lake and a new GoDaddy office with 1,000 employees and eye-catching perks like go-karts and an indoor climbing wall.
Tempe Mayor Mark Mitchell said the city has made significant investments in infrastructure like transportation and parks to help pave the way for the current success.
"Everything we do with economic development is for residents to have the opportunity to live, work and recreate within our community," Mitchell said.
Aileen Blake, director of enterprise change for Northern Trust, said the company picked the Phoenix area in part because of its large, robust talent supply.
"There is a relatively significant financial-services presence in the Phoenix area already, and we believe we can leverage this in a number of ways," Blake said. Expanding in Arizona also allows the company to increase time-zone coverage and bring services closer to clients in the western U.S., she said.
Northern Trust provides wealth- and asset-management services rather than retail consumer banking. The company boasts more than 15,000 employees worldwide and claims to be the world's eighth largest hedge-fund administrator.
Most of the 1,000 or so jobs will be new and range from entry level to leadership positions, according to the company. That will likely include jobs in accounting, operations, information technology, client services and investment management, Blake said. The average annual salary among those jobs is estimated to be $82,000.
Gov. Doug Ducey and Watson both described the Northern Trust deal as a validation of Arizona's pro-business climate. Greater Phoenix Economic Council head Chris Camacho touted the company's reputation for community involvement.
"The brand of Northern Trust is one that's embedded in great corporate philanthropy," Camacho said. "In addition, these are high-wage jobs that are going to create new disposable income for the marketplace. They're going to drive more spending, going to create a new tax base."
While Tempe's incentive agreement provides a benefit for the bank with reduced property taxes, it also provides a direct public benefit in a new source of funding for the Tempe Center for the Arts.
"We are at the beginning efforts of creating an endowment for our arts program because we want to grow and expand and start a second phase for the Tempe Center for the Arts," city Economic Development Director Donna Kennedy said. "All around this helps us (with) fundraising and event planning."
In addition to the naming-rights agreement, Tempe is also waiving up to $250,000 in permit fees for the project.
Tempe's Discovery Business Campus apparently won out over two Scottsdale sites also in the running. The mixed-use complex is now fully planned, with a 12-acre speculative office project also expected to start construction this year and the two hotels in the works. A small retail component is already open, with restaurants including Smashburger and Chipotle.
Source: Parker Leavitt and Darren DaRonco, The Republicazcentral.com