Fidelity Investments this month took the next step in its Rhode Island expansion, breaking ground on the third building at the company’s Smithfield campus.
The $200 million, 569,000-square-foot office building at 900 Salem St. will be the largest in the state, Fidelity said. The architect is Gensler Associates, an international firm with an office in Boston; Providence-based Gilbane Building Co. is the builder.
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The building, slated to be completed in 2008, will be home to three subsidiaries of the Boston-based Fidelity: Pyramis Global Advisors, Fidelity Investments Institutional Services and Fidelity Personal Investments, the company’s retail brokerage unit.
The new building will allow Fidelity to consolidate its offices in Smithfield, allowing all three subsidiaries in the state to grow here, said John Muggeridge, the company’s Rhode Island general manager. (Fidelity will maintain a retail presence in Providence, however, in the GTECH building, a company spokesman confirmed.)
Fidelity said it will add 1,000 new jobs in Smithfield once the project is completed. It now employs about 2,000 people in Rhode Island, including about 325 in its personal investments arm who moved into the former American Express building in Providence this summer.
“Financial services are becoming a cornerstone of the Rhode Island economy, and we are very pleased to have our business growing here,” said Ellyn McColgan, president of Fidelity Brokerage Co., which includes the personal investments arm. “The state’s diverse array of excellent colleges and universities provides a rich talent pool for our business. Right now, we have almost 400 local graduates working for Fidelity in Rhode Island, and we hope to attract even more.”
Pyramis, which now has 90 employees in Rhode Island, is one of Fidelity’s newest offshoots. It is an investment company focused on the needs of institutional clients including retirement funds, endowments, foundations and other investors. It manages about $129 billion in assets. Once 900 Salem St. opens, Pyramis President Peter J. Smail said, “we will look forward to welcoming clients from the U.S. and around the world.”
At the Oct. 12 groundbreaking ceremony, Fidelity and state officials credited the Smithfield expansion to the state Jobs Growth Act approved last year by the R.I. General Assembly.
The measure allows large companies that increase their high-wage employment in Rhode Island to reduce the state tax rate their workers pay on performance-based pay – such as bonuses – to 5 percent (from as much as 9.9 percent) by paying the difference to the state on the workers’ behalf. To qualify, a company has to create at least 100 new full-time jobs with average pay of no less than 125 percent of the average pay of all employees in the state.
The R.I. Economic Development Corporation also aided the company’s expansion, through a 2002 eminent-domain taking that provided Fidelity with an additional 40 acres of land on which to expand. In return, Muggeridge said, Rhode Island will get another economic boost from the financial-services sector, which he said already contributes a larger share of the gross domestic product in this state than in all but four others.
“Fidelity’s continued growth demonstrates our commitment to Rhode Island,” Muggeridge said.
Gov. Donald L. Carcieri said Fidelity’s decision to expand in Rhode Island is a positive indicator of the state’s efforts to boost its job market.
“This is a vote of confidence, as far as I’m concerned, in our state and your experience here,” Carcieri told the Fidelity officials at the ceremony.
