Home > About BNE > Press Room > 2007 Archive > February > Expansion of back-office

 By JONATHAN D. EPSTEIN

News Business Reporter

2/22/2007 

Citigroup officials said Wednesday the banking giant chose to expand in the Buffalo area over dozens of locations globally because of the quality of life and dedication of the work force - not $15 million in government incentives. And Gov. Eliot Spitzer said the doubling of the bank's operations here could lead other companies to take another look at Western New York.  The $1.8 trillion-dollar bank formally announced it will build a second back-office facility in Amherst's Cross-Point Business Park, with 156,000 square feet of added space next to its current building that opened in November.

Plans currently call for hiring as many as 700 employees over the next three years for various behind-the-scenes tasks - doubling the bank's Western New York workforce of 750, according to the bank and Empire State Development Corp. But the new building, estimated to cost more than $50 million when completed, could ultimately house up to 1,000, marking a significant investment for Citigroup. Speaking at a press conference with more than 200 employees and dignitaries, Hans Morris, head of operations and technology for Citi's Global Markets and Banking division, said the bank could have set up shop anywhere, since it operates in 102 countries. But it chose Amherst because of the bank's 30 years of experience working here. The bank opened its local operation in 1976 with 10 employees and now has 650 after moving from an older site on Ridge Lea Road and adding 200 jobs. It also has 100 employees in Smith Barney offices and had 21 branches in Buffalo and Rochester before selling them to M&T Bank Corp. last year.

"Citi chose Buffalo because of the character of the people here," said Morris, who is also chief financial officer of the division within Citigroup's Corporate and Investment Bank. "I love this city. I love our staff here. Back at [our headquarters], I am called Mr. Buffalo because I love this place so much."

 But the bank is also getting significant financial benefits. It has been tentatively approved for the Empire Zone program as a "regionally significant project," expected to bring $13 million in tax credits over 10 years. And it accepted a $1.75 million economic development package from Empire State Development's Jobs NOW program, with $1.5 million for the construction of the new facility and the creation of 500 jobs, and another $250,000 if it adds 150 more jobs by January 2012. It will also receive an energy discount of about 2 cents to 3 cents per kilowatt for five years from the New York Power Authority, through National Grid. That's worth it, Spitzer said. "These are the jobs that we want to draw here," he said. And he said Citigroup's decision could create a domino effect, as businesses see that outsourcing no longer makes sense compared to hiring at home.

"You're going to see this city become a financial center and thrive," he said. "We think there is a tipping point, where people see that this is a place to site these sorts of jobs." Already, the area has thousands of financial services employees at M&T, HSBC Bank USA, Geico Corp., Bank of America Corp. and Washington Mutual, in addition to Citi. Other financial companies also have looked at the area, said Thomas Kurcharski, president of Buffalo Niagara Enterprise. "That's what we kind of envisioned we were going to be as a region," he said. "All the research we've done said we would be a very viable alternative for financial services."

The new positions - which Morris called "real knowledge jobs" - will range from entry-level to senior management, and will be in capital markets and banking operations, Global Transaction Services, fixed-income analytics, risk, compliance and finance. More than half of Citi's revenues come from abroad, and employees will support the bank globally, such as settling a foreign exchange deal. The average starting salary will be $45,000.

 e-mail: jepstein@buffnews.com