Hey, I realize the taxes have gone up a hair and there's a slight uptick in crime...but honestly guys don't you have any sentimental attachment to Frank? How can you just leave for the f-cking South! So what if they have lower cost, better-educated labor, and right-to-work laws! Have you no shame?
New York loses $1 trillion in Wall Street business as firms flee the city.
By Shannon Thaler, NY Post
August 21, 2023
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A giant, sucking sound is coming out of Wall Street — and it’s siphoning staggering sums of money out of the Big Apple while handing business to Florida and other states farther south.
Nearly 160 Wall Street firms have moved their headquarters out of New York since the end of 2019, taking nearly $1 trillion — yes, that’s trillion with a “T” — in assets under management with them, according to data from 17,000 companies compiled by Bloomberg.
Looking to dodge rampant crime, stiff taxes and an increasingly exorbitant cost of living, 158 fed-up financial firms representing a whopping $993 billion in assets have packed up and left the Big Apple, taking thousands of high-paid employees with them, the data shows.
Icahn Capital Management — headed by billionaire corporate raider Carl Icahn — is among the most prominent firms to decamp to the Sunshine State. In August 2020, the firm ditched its posh Manhattan digs atop Fifth Avenue’s General Motors Building in favor of a 14-story office complex in a Miami suburb.
Icahn’s firm, which manages $22.2 billion in assets, now conducts business less than a mile away from his mansion in Indian Creek Village.
Meanwhile, hedge fund tycoon Paul Singer’s Elliott Management — which oversees a total of $59.2 billion after shaking up investment targets including AT&T, Twitter and the government of Argentina — moved its headquarters from Midtown Manhattan to West Palm Beach, Fla., in October 2020.
Of 158 NY-based companies managing $993 billion in assets, 56 have decamped to Florida, including hedge fund tycoon Paul Singer's Elliott Management and closely-watched stock picker Cathie Wood's ARK Investment Management.
One year later, closely watched tech-stock guru Cathie Wood — famous for her bold windfall bet on Elon Musk’s car maker Tesla — moved her firm ARK Investment Management, and its $24.7 billion worth of assets, to St. Petersburg, Fla.
In all, 56 of the New York firms have decamped to Florida, while most of those remaining also headed to warmer states such as Texas and the Carolinas, according to the report. New York isn’t the only major loser, with California also having lost $1 trillion in financial assets under management to Florida, Texas and other lower-cost states.
Other major losers to Florida include Chicago, which lost billionaire Ken Griffin’s giant hedge fund Citadel to Miami last year.
The mass migration threatens a crippling economic blow: Last year, Wall Street accounted for 16% of all the economic activity in the city and 7.3% of economic activity statewide. The latter figure is the highest in the nation by far, towering above the national average of just 1.7%, according to an October report by New York state Comptroller Thomas DiNapoli.
Likewise, the exodus has grave tax implications for the city and state. Last year, financial firms paid $5.4 billion in New York taxes and accounted for nearly a quarter of all personal income tax collections, according to the report.
According to New York state Comptroller Thomas DiNapoli’s latest figures on the securities industry, Wall Street bonuses could slump by as much as 45%. The dip doesn’t spell good news for the state, which relies on personal income taxes.
Tax revenue from the industry this year is headed for a “significant decline,” the report warned. It also noted that New York’s share of financial industry jobs was 17.6% in 2022 — down by nearly half from a third in 1990 — and noted that “jobs have shifted to lower-cost regions.”
High-profile examples include Goldman Sachs, which has been heavily investing in Dallas, where the cost of living is about 40% less than it is in New York, according to Salary.com.
Goldman Sachs is in the process of erecting a three-building campus just outside downtown Dallas, according to documents filed with Dallas’ city plan commission obtained by the Dallas Morning News.
The nearly $500 million, 815,000-square-foot development was made possible with the $18 million in tax breaks the city of Dallas granted the Wall Street bank last July in exchange for bringing as many as 5,000 jobs into the city.
When the campus opens in 2027, staffers will enjoy underground parking, a first-floor retail space, a 1.5-acre urban park, a hotel and residential towers, the filings showed.
Other prominent firms moving their headquarters from New York to Sun Belt refuge states: Icahn Enterprises and AllianceBernstein. Meanwhile, Goldman Sachs is betting big on Dallas.
A spokesperson for Goldman said the bank has no plans to abandon its downtown Manhattan headquarters at 200 West St.
Mammoth money manager AllianceBernstein moved its headquarters from New York to Nashville in May 2022 — taking a staggering $685 billion in managed assets with it. In the process, the mega-firm also relocated 1,000 jobs in a shift that Bloomberg reported at the time would save the global asset management firm $80 million a year.
The Nashville move was driven by hard numbers that show the massive savings that can come with an exit from New York: According to Statista, companies spend a median of $94 per square foot for corporate space in Manhattan, while offices in Nashville run for a median of $31 per square foot.
Altogether, the cost of living is nearly 42% less in Music City than it is in the Big Apple, according to Salary.com‘s cost-of-living comparison tool.
Representatives for the company did not immediately respond to The Post’s request for comment.
AllianceBernstein moved its headquarters from New York to Nashville in May 2022, relocating 1,000 jobs in an effort to save the global asset management firm $80 million a year.
Charles Schwab, which oversees more than $7 trillion in assets, officially re-designated its headquarters from San Francisco to Westlake, Texas, outside of Dallas after it acquired TD Ameritrade in 2020.
The 1.1 million-square-foot campus was over three years and $100 million in the making, with amenities that include a “café, training center, multiple collaboration spaces, employee services and more,” according to the investment firm’s website.
Wells Fargo — which has assets under management totaling $603 billion — is also spending nine figures to develop an 850,000-square-foot North Texas hub.
After receiving more than $30 million in tax breaks, Wells Fargo is spending $500 million to construct two buildings and a 4,000-space garage that will play host to over 3,000 workers by the end of 2026, Bloomberg reported.