Contact: Colleen Roche 212 788 2958, Bernadette O'Leary (212) 312-3523 (EDC) & Caroline Quartararo (212) 474-8418 (ESDC)
NEW YORK CITY (City Hall) -- Mayor Rudolph W. Giuliani and Governor George E. Pataki announced today an agreement with The McGraw-Hill Companies that ensures the company will remain in New York City.
The agreement keeps 4,010 jobs in the City. It also ensures annual City tax revenues of $40.4 million derived from the presence of the company and preserves the City's status as the information capital of the world. Standard & Poor's, a division of The McGraw-Hill Companies, was considering consolidating its 2,057 bond rating agency and financial information services employees, as well as 1,372 other McGraw-Hill employees in a new office tower in Jersey City. Instead, the company will move Standard & Poor's into a 937,000-square-foot space at 55 Water Street in Lower Manhattan.
In addition to securing these positions, the agreement also keeps The McGraw-Hill Companies' remaining 581 jobs in the City for the next 22 years and projects the creation of an additional 2,631 jobs over that same period.
Mayor Giuliani said, "With this agreement with The McGraw-Hill Companies, we are confident that New York City will continue to rank as the Business Capital of the World. Today's agreement, which will keep 4,010 jobs in the City, is also a testament to the continuing success of our Lower Manhattan Revitalization Plan, initiated by my administration and signed by Governor Pataki."
Governor Pataki said, "This is a great day for New York City, The McGraw-Hill Companies and the people of New York State. We are keeping a major employer and financial information services company in New York, the capital of our global economy. We are building a base of economic renewal that will bring a growing State economy roaring into the 21st Century. With an annual City payroll that will grow from $218 million to $359 million, this agreement is a down payment that will help ensure the next generation of New Yorkers a shining economic future."
The agreement was negotiated by the New York City Economic Development Corporation (EDC) and the Empire State Development Corporation (ESDC), and must still be approved by the City's Industrial Development Agency (IDA) at its next board meeting in May. McGraw-Hill will receive a maximum of approximately $19.7 million in sales tax exemptions as well as $4 million in energy discounts in return for the retention of 4,010 jobs. In addition, if the company is able to create the additional 2,631 new jobs, it will receive a maximum of $10.8 million in sales tax exemptions.
In addition to Standard & Poor's Ratings and Financial Information Services Groups, the agreement includes the retention of The McGraw-Hill Companies' corporate headquarters, School Publishing, Professional Publishing, College Publishing, Construction Information Group and other publication units. Since The McGraw-Hill Companies generate $40.4 million annually in total City tax revenues, the payback period to the City for the incentives is 4.4 months.
"Our decision to stay in New York City fulfills the best interests of The McGraw-Hill Companies and the many audiences we serve, especially our employees, our customers and our shareholders," said Harold McGraw III, President and Chief Operating Officer of The McGraw-Hill Companies. "The McGraw-Hill Companies was founded in New York City in 1888. We are pleased that today's agreement guarantees our corporation will maintain a significant and long term presence in the Big Apple. We are grateful for the significant efforts of Governor Pataki, Mayor Giuliani and other New York City and New York State officials for working vigorously to bring about this positive result."
The State and the City are committed to keeping New York City competitive with other localities. By creating the right economic climate, New York City prevails as an ideal place to do business.
Charles A. Gargano, Chairman of ESDC, said, "The key to helping Standard & Poor's make a commitment to New York was to create a competitive business environment in which to grow. Governor Pataki has done just that by his aggressive policies of tax cuts, workers' compensation reform and regulatory relief for business. This is indeed the new Empire State, with a new way of doing business."
"We are excited that McGraw-Hill has decided to remain in New York City, especially in the face of such an aggressive tax incentive offer and a new ad campaign from New Jersey," said EDC President and IDA Chairman Charles Millard. "This agreement shows that the Mayor is committed to keeping jobs in the City, and that even with incentives and ad campaigns from other states, companies recognize the benefits of New York City's business-friendly environment."
In the event the company does not maintain the specified job level, the agreement calls for the repayment or reduction of some or all of the benefits taken, as well as penalties, and an elimination of any unused benefits.
Including this agreement, the Giuliani Administration has now retained 27 major companies through its business retention program, representing 61,454 jobs retained and a projected 23,435 new jobs over the next 10 to 20 years. The total tax revenue generated by these companies to the City is $875.62 million a year.
The McGraw-Hill Companies is a leading information services provider, meeting worldwide needs in education, business, finance, the professions and government. Founded in New York City in 1888, the Corporation today provides information and analysis in multiple media through its rich portfolio of valuable brands. Sales in 1996 were $3.1 billion.
ESDC, New York State's economic development agency, is a public benefit corporation. It acquires, constructs, and improves commercial, industrial, civic and residential projects that will create jobs and relieve economically stressed areas. ESDC provides grants and loans for these programs.
EDC is the City's primary vehicle for economic development services. Using its real estate and financing resources, EDC helps develop businesses and create jobs throughout the five boroughs.