When a Fortunate 500 corporation leaves a city, what happens to who is left behind? What happens to the local restaurant owners? The real estate market? The club sports teams? The charities? In this post, I want to explore a similar case study involving GE departing the Connecticut town of Fairfield.
Dino Sakakini, owner of a restaurant called Layla’s Falafel, was quite pessimistic about UBS’ impending move back to Manhattan. “Stamford will be crushed,” he exclaimed. “Plain and simple. We’ll become a ghost town.” At Morton’s steakhouse (which is now closed), Danny Ryan, who was a bartender and server, said, “It just doesn’t make any sense. Why would they build this stunning building with the biggest trading floor in the world, and then leave?”
Peter Charpentier, who claims he sells “a whole lot” of brown-bagged bottles of liquor to UBS employees every evening, said: “The State of Connecticut should be begging them to stay. I’m a man who believes in trickle-down economics. You take away UBS and it affects everything and everybody. What happens to all the restaurants? How about the window washers? The elevator operators? The janitors, the gardeners? It would be disastrous.”
One comparison that I can draw between UBS and RBS departing Stamford is another Fortune 500 company departing a city in Connecticut, which is GE leaving Fairfield. The company had 800 people working in its corporate headquarters. When GE left Manhattan for Fairfield in 1974, executives were drawn to Connecticut’s lower taxes, good public schools, and walking-accessible towns. Yet in 2016, GE announced that they would be moving all of their corporate headquarter activity to Boston. The company planned to sell all 68 acres of their lot, and are selling their remaining offices in 30 Rockefeller Plaza.
Local leaders and residents were the first to raise concerns about the loss of tax revenue and hundreds of high-paying jobs. GE was Fairfield’s largest property-tax payer, with bills fluctuating between $1.6 to 1.8 billion over recent years.
Similar to the departures of UBS and RBS, the GE’s move did not raise many eyebrows. The corporation had previously voiced their displeasure with the state of Connecticut after state legislators passed tax increases and limited the use of business tax credits for corporations.
Besides the financial loss, the departure of GE has tangible community-wide ripples. Over the decades, GE employees who retired would stay in Fairfield or neighboring towns, volunteering, donating to charities, or sitting on town boards.
At one time, the Morton’s below UBS flourished when the banking industry was expanding and the trading business was making large profits. Now, the Morton’s is closed. Remnants of the UBS workers will move across the street to RBS. While UBS has often been seen as an “anchor” of Stamford, perhaps this is not all doom and gloom for the city. Time will tell if the new owner of the UBS building will attract equally valuable tenants.