Add it to the reasons to move a corporate headquarters to Providence: A head office in the capital costs less than Boston, New York and other major cities in the Northeast studied in a new survey by a New Jersey site-selection consulting firm.
The firm, The Boyd Company Inc., said a 70,000-square-foot headquarters with 325 employees in Providence would cost about $25 million annually, including payroll, taxes, utilities and travel costs. Comparatively, New York City topped the list of 50 large cities at $30.7 million a year and Sioux Falls, S.D. came in the cheapest at $21.1 million a year. In New England, the report found Boston had an annual cost of about $28 million and Stamford, Conn., $29 million.
Boyd Vice President John Boyd Jr. said the results bode well for Providence in an economy where companies are looking to save money any way they can.
“It’s almost in fashion for companies to re-brand themselves as … committed to being efficient and operating in low-cost, less-regulated markets,” Boyd said.
Boyd called head-office locations “the next frontier” in corporate cost-cutting and said gone are the days that large companies felt an intrinsic loyalty to one city.
John Rhodes, a site-selection consultant at Florida-based Moran, Stahl & Boyer, said rents alone help Providence stand apart from its larger neighbors. In Providence corporate offices can cost between $30 and $32 a square foot, Rhodes said. Those figures rocket up to around $60 a square foot in Boston and $85 a square foot in New York City.
“When you look at size and [transportation] access, Providence has a sweet spot,” Rhodes said.
Last month Rhodes delivered his own report to the R.I. Economic Development Corporation. Unlike the Boyd report, Rhodes’ looked at the entire state and locations ideal for not just corporate headquarters but also manufacturing, back-office space and research.
Boyd said polls by his company show those items are important to businesses, in addition to companies wanting a business-friendly court system and business-friendly labor laws.
“Very often Providence lands up the short list [for] people looking to expand in the Northeast,” Boyd said.
Boyd said Providence also offers a good quality of life for employees, proximity to higher education institutions and regional transportation options, including an airport with a discount airline, Southwest.
Michael Giuttari, owner of MG Commercial in Providence, said he was not surprised Rhode Island ended up in the middle of the pack in terms of cost. But he worried that taxes and limited parking would overshadow the relatively low rents.
“I think the corporate tax is a bigger issue than anything else from companies looking to locate in the state,” he said. “We don’t see a lot of companies coming into Rhode Island. We see more shifting around.”
Bucking that trend, United National Foods moved its corporate headquarters from Connecticut to Providence in September, bringing with it 181 jobs. And Webster Bank recently moved its regional headquarters from Swansea to Providence, saying it wanted to be closer to firms that influence the selection of financial providers. •
