Gen Re In Stamford, Conn., To Move Down The Road

Copyright 2008 The Stamford Advocate The Stamford Advocate (Connecticut)

Distributed by McClatchy-Tribune Business News

July 1, 2008 Tuesday

SECTION: BUSINESS AND FINANCIAL NEWS

ACC-NO: 20080701-AD-REINSURANCE-20080701

LENGTH: 842 words

HEADLINE: Gen Re in Stamford, Conn., to move down the road

BYLINE: Richard Lee, The Stamford Advocate, Conn.

Jul. 1--STAMFORD -- One of the reinsurance industry's major players and employer of 800 people in Stamford will remain in the city but will move to a new home.

Stamford-based General Reinsurance Corp. has negotiated a 20-year lease for nearly 300,000 square feet at 120 Long Ridge Road, a property now occupied by GE Energy Financial Services and owned by Building & Land Technology, a Norwalk property developer.

The GE unit plans to move next year to the former Xerox Corp. headquarters at 800 Long Ridge Road, also owned by the Norwalk company.

"I never imagined them going anywhere else. I've been involved in these negotiations for about a year," said Stamford Mayor Dannel Malloy, citing the company's commitment to the city. "They looked at other locations, but these folks have a fondness for Stamford. They have a large investment in Stamford. We run a city that companies and individuals want to be in."

A $9 million loan from the state Department of Economic and Community Development has played a crucial role in the decision by Gen Re to remain in Stamford.

The loan will pay for fixtures and equipment at the new facility on Long Ridge Road. Building & Land Technology bought the property from GE.

The State Bond Commission is expected to approve the loan at its next meeting.

Gen Re also will be eligible for as much as $19.5 million in Urban and Industrial Sites Reinvestment tax credits and is pursuing $2.1 million in sales and tax exemptions through the Connecticut Development Authority to help defray construction costs. The exemption is subject to approval by the development group's board of directors.

Gen Re will move to its new location in January 2010, said Carl Kuehner, president and chief executive officer of Building & Land Technology.

"It was an arduous process," he said, referring to the negotiations. "We had other (possible) tenants but none for the entire building."

The availability of desirable Class A office space on Long Ridge Road for the first time in many years was an important factor, Kuehner said.

An anonymous source said yesterday that Gen Re's lease at 695 E. Main St., expires Jan. 31, 2010.

"We are very pleased with the public financing commitment from Connecticut, which reinforces our decision to remain headquartered here in Fairfield County," Gen Re Chief Executive Officer Tad Montross said in a statement. "We've been in Fairfield County since 1974, and it has become home to our associates who live in and support the local communities."

After a 16-month evaluation, Gen Re executives said the Westchester County, N.Y., and Fairfield County markets were optimal locations because they offer a skilled labor force and convenient access to many transit options.

Jack Condlin, president and chief executive officer of the Stamford Chamber of Commerce, said he was pleased to hear the company was staying in Stamford, but he expressed concern about the space that Gen Re will vacate.

Gen Re's current 575,000-square-foot facility in Stamford is about twice as large as it needs.

"When they leave, there will be 575,000 square feet back on the market. There's a potential for another financial institution to fill that space," he said.

The retention of Gen Re will contribute to continuing the state's leadership role in the insurance and financial services sector, Gov. M. Jodi Rell said.

"Connecticut has long been a world leader in finance and insurance, but we risk losing that position unless we remain proactive about keeping the companies we have and recruiting new ones to the state," Rell said in a statement. "This agreement with General Re is definitely a win-win for Connecticut. We are retaining more than 800 high-quality jobs and strengthening one of the keystone industries that will sustain economic growth for years to come."

Gen Re, a subsidiary of Berkshire Hathaway Inc., is a holding company for global reinsurance and related operations. It employs 2,300 people around the world in more than 50 locations.

While the new facility also is larger than Gen Re's present needs, future expansion is possible.

The Department of Economic and Community Development will keep a close eye on Gen Re, making certain that it adheres to stipulations in the financial agreements, department spokesman James Watson said.

"Those are tax credits that have to be earned," he said. "In the fourth year, they'll be eligible for 10 percent of the total credit amount. Through year 10, they'll have to come in and tell how they earned those tax credits. Every year, they have to make their case.

"This was more a retention project. Our goal was retaining 800 jobs in Connecticut," Watson said.

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LOAD-DATE: July 2, 2008