Morgan Stanley Plans $200M Renovation of Harrison Office Complex Thanks to Westchester IDA Incentives
John Jordan | November 27, 2020
WHITE PLAINS—The Westchester County Industrial Development Agency announced on Nov. 25 it recently granted final approval for incentives ranging from $6.5 million to $13 million to Morgan Stanley for the financial services firm’s planned more than $200-million renovation of its corporate office complex at 2000 Westchester Ave. in Harrison.
The Industrial Development Agency stated that the IDA Board voted in favor of the incentives at its Nov. 23rd session. Morgan Stanley, which has occupied the majority of the 750,000 square-foot building since the early 2000s, is planning a comprehensive interior redesign, renovation and additional investment in its Westchester campus to enable the facility to consolidate certain functions. The complex, which was built in 1977, is the former world headquarters of Texaco.
The incentive package could be more or less than the $6.5 million to $13-million range depending on the final scope of the project, the Westchester IDA stated in its announcement. Morgan Stanley is also seeking a PILOT agreement with the Town of Harrison that has not been finalized.
According to an economic benefit analysis prepared for the IDA by Camoin Associates, the number of jobs to be created over the course of the project is estimated in the range of 700 to 1,100 new positions. The project is also estimated to retain between 1,200 and 1,350 employees and create approximately 923 construction jobs.
The analysis estimates new property tax revenue over 10 years in the range of $12 million to $18 million as well as $15 million to $25 million in county property and sales tax revenues over the same 10-year period.
The Morgan Stanley renovation project will incorporate energy efficient and sustainable features.
“Today’s important vote by the IDA reaffirms Westchester County’s reputation as having a business-friendly climate where companies both large and small can prosper and grow. We applaud Morgan Stanley for their significant investment in our county that will create and retain thousands of well-paying jobs. In today’s difficult economy, this is great news indeed,” said Westchester County Executive George Latimer.
“The financial incentives approved today for Morgan Stanley will result in significant and long-term benefits for Westchester County and its ability to attract new businesses. Today’s vote also demonstrates the critically important role that the Westchester IDA plays in the economic strength and vitality of our county,” added IDA Chair Joan McDonald.
The planned investment follows other major corporate users in the county that have undertaken significant renovation programs, including PepsiCo, which embarked on a more than $240-million capital improvement program on its Westchester County properties. PepsiCo assistance from the Westchester County IDA and New York State in 2012.
According to minutes of the IDA’s Oct. 8th session posted on the agency’s website, Joseph Carlucci, a partner with White Plains-based law firm Cuddy & Feder, presented the Morgan Stanley (MS Harrison) application to the IDA. He stated that, if approved, Morgan Stanley planned to relocate its Wealth Management division to the Harrison complex.
Morgan Stanley is considering several locations around the country in which to consolidate their wealth management group, the IDA minutes state. “Some key considerations are cost of construction, tax benefits that are available, abatement of property taxes, etc. Other locations have lower costs therefore the Westchester location does have some shortcomings, but the IDA benefits would make Westchester competitive with other locations by evening out the cost,” according to the IDA minutes. Carlucci said the project is contingent on IDA benefits due to the high costs of construction, labor and taxes. Morgan Stanley would not be able to sustain this facility without the IDA benefits,” the IDA minutes state.
Dan Haggarty, managing director of Morgan Stanley, also spoke about the project at the Oct. 8th session. He noted, according to the meeting minutes, that the goal of the project is to improve the workplace of the employees as well as improve the amenities for the employees, such as increasing the size and design of the conference and meeting rooms.
Other planned upgrades include lighting improvements and paving in the parking and drop-off areas.
The IDA minutes further state that Haggarty told the IDA the renovation of 2000 Westchester Ave. might also include building a walkway from the parking lot, developing a solar field to assist with the property’s energy efficiency, increasing circulation routes within the building, upgrading the lobby, and instituting a better integrated experience with the landscape of the building. The company also intends to update the fitness center and provide physical therapy rooms and a health center. Other planned amenities include an ATM, a small convenience store, upgrading the TV studios and other areas for employees and visitors. Morgan Stanley could not be reached for comment at press time.
Morgan Stanley bought the property in 2002 and Atlas Air Worldwide Holdings is a major tenant at the property that has a lease that extends through May 2027. In the fall of 2009, Atlas Air announced it was renewing and extending its headquarters lease long-term at 2000 Westchester Ave. and investing nearly $38 million on office space upgrades and equipment.
Atlas Air reported it had signed a long-term lease renewal for its approximately 120,000-square-foot headquarters at the former Texaco headquarters. The company told Real Estate In-Depth at the time that its extension did not involve any increase in the size of its headquarters space and that the company’s $37.5-million investment over the next five years would involve efforts to optimize its existing space. The company said it would retain the 568 jobs currently housed at the four-story, 750,000-square-foot building.