Mor­gan Stan­ley pledges to hire 800 in Bal­ti­more

Fi­nan­cial firm’s ex­pan­sion gets $5 mil­lion in­cen­tive deal

Baltimore Sun - - FRONT PAGE - By Natalie Sher­man

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.

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