Morgan Stanley pledges to hire 800 in Baltimore
Financial firm’s expansion gets $5 million incentive deal
Morgan Stanley said Thursday that it plans to deepen its presence in Baltimore, hiring 800 more people over the next four years and opening a second office in the heart of downtown.
The expansion, which would nearly double the firm’s footprint in the city, comes with a $5 million package of state and city incentives. It’s the third round of taxpayer-financed subsidies the New York-based financial services giant has received since it opened an office in Baltimore in 2003.
State and city leaders hailed the plans as a message from a major company that Baltimore is a good place to do business. They said the new white-collar jobs will build on economic momentum already underway, as companies including Comcast relocate or add jobs in the city.
Gov. Larry Hogan called the Morgan Stanley announcement “a tremendous win.”
Employment in Maryland’s financial
activities sector peaked in 2006, according to the Bureau of Labor Statistics. In Baltimore, the number of jobs in the field has fallen by nearly 50 percent since 2000.
Growth from a high-profile company like Morgan Stanley could catch the attention of similar businesses as well as support the ones that remain, said Karyl B. Leggio, a professor of finance at Loyola University Maryland’s Sellinger School of Business.
“We are rebuilding our core as a financial services city, and that’s good because that attracts other companies to think about Baltimore as well,” she said.
The Morgan Stanley deal is one of several recent incentive packages from the state, some of which have been criticized as corporate welfare.
The administration announced last month a roughly $60 million mix of loans, grants and tax credits for Marriott International to retain its 3,500-person head count in Maryland and build a new headquarters. The administration also sought to extend a $20 million forgivable loan to Northrop Grumman, which is tied to the company’s maintaining its 10,000-person workforce and investing $100 million, but that has been held up by General Assembly leaders.
The latest Morgan Stanley incentive is smaller by comparison.
The company employs more than 55,000 people globally and about 1,000 people in Baltimore. Like other financial companies trying to rein in costs, it has worked to shift employees to less expensive locations, like Baltimore with its relatively low cost of living, a strategy leaders highlighted on a recent call with investors.
The expansion in Baltimore is tied to consolidation elsewhere at Morgan Stanley, said William H. Cole IV, head of the Baltimore Development Corp.
He said it’s one of the reasons Morgan Stanley chose to open a second office at the Bank of America building at 100 S. Charles Street.
In total, Morgan Stanley expects to occupy more than 250,000 square feet of office space in Baltimore.
In addition to its Harbor Point offices, the company is leasing about 69,000 square feet at 100 S. Charles Street — two floors — with the option to add more, said Abdi Mahamedi of New York-based Carlyle Development Group, which bought the property last year with plans for a major renovation that would orient the building to Pratt Street.
He said he expects Morgan Stanley to start moving in next fall.
“We believe in Baltimore’s resurgence and renaissance,” Mahamedi said. “We think it has a good future and this … will give this part of town a lot of credibility.”
The expansion adds to hiring plans Morgan Stanley announced several years ago when it was in line to receive more than $6 million in state and city incentives linked to its new building in Harbor Point.
At the time, the company said it expected to employ 1,500 people in Baltimore by the end of 2018, but those goals were scaled back amid the slow recovery from the economic downturn. The incentive package also was reduced, said Karen Glenn Hood, a spokeswoman for the state Commerce Department.
Through a spokeswoman, Morgan Stanley officials declined to be interviewed.
Baltimore is the company’s largest base in North America outside of New York, according to its website. Its Baltimore office handles operations, compliance and technology, and the expansion here could add divisions such as trade support.
“Morgan Stanley has established a strong footprint in Baltimore over the past decade, successfully expanding our local operations in partnership with the city,” Sheila Welch, managing director, head of global workforce strategy at Morgan Stanley, said in a statement. “The firm is pleased to move forward with this new strategic initiative and continue growing our presence in the area.”
Shannon Landwehr, president of the Economic Alliance of Greater Baltimore, helped establish Morgan Stanley’s Baltimore office.
She said the company, which went to the Economic Alliance for data when it started scouting for a location, likes the workers it has been able to recruit from local universities.
“Morgan Stanley is incredibly strategic about these decisions and certainly looked at all options,” she said. “They see this as a place where they can do business, grow business. They like the workforce here, and they want to continue to be a part of this community.”
The incentives for this expansion include a $4.5 million state grant, contingent on the company’s investing $10 million, hiring at least 800 people by 2020 and keeping those employees for at least five years, Glenn Hood said.
The city is also providing a $500,000 loan that can be forgiven if the company meets hiring targets by 2020.
“Economic development is a competitive process,” Glenn Hood said.
Morgan Stanley, which reported about $5 billion in profit in the first nine months of the year, is also eligible for numerous tax credits, including for job creation and locating in an Enterprise Zone.
The credits are likely to be worth at least $800,000, but a more precise estimate was not available.
Not including the tax credits, the company is in line to receive about $6,250 on a per-job basis.