Archives of the Mayor's Press Office

FOR IMMEDIATE RELEASE
Date: November 19, 1996

Release #597-96

Contact: Colleen Roche (212) 788-2958, Deirdra L. Picou (212) 788-2971 or,
Bernadette O'Learyn (212) 312-3523 (EDC)


MAYOR GIULIANI ANNOUNCES
AMERICAN INTERNATIONAL GROUP TO KEEP 5,180 JOBS
IN LOWER MANHATTAN AND NEW YORK CITY

GIULIANI ADMINISTRATION RETAINS MORE THAN 50,000 JOBS TO DATE

Mayor Rudolph W. Giuliani announced today an agreement with American International Group, Inc. (AIG), to remain in New York City for at least the next 15 years. The agreement will retain AIG's 5,180 jobs, most of which are located in Lower Manhattan, and will create an incentive for AIG to increase its work force in New York City. With this agreement, the Giuliani Administration has retained 55,082 jobs as part of its business retention program.

AIG is among the nation's largest underwriters of commercial and industrial coverage and the largest U.S.-based international insurance organization. The company was prepared to move its offices outside of the City, but instead will keep its approximately 2.5 million square feet of office space in Manhattan, primarily in Lower Manhattan.

Over the term of the agreement, negotiated through the New York City Economic Development Corporation (EDC) and approved by the City's Industrial Development Agency (IDA), AIG will receive a maximum of approximately $47.3 million in benefits if it is able to maintain its current 5,180 jobs in New York City. The City's portion of these benefits is $29 million. AIG is also eligible for an additional $8.4 million in benefits if it is able to create a projected 1,858 new jobs. Of the City's total contribution to AIG's benefits package, 22.5 percent is contingent upon growth by the company.

"Lower Manhattan has seen a dramatic revitalization since we created the Lower Manhattan Plan last year, and the retention of AIG is an important ingredient for the success of this neighborhood," Mayor Giuliani said. "AIG's member companies are represented in 130 countries worldwide, and AIG's decision to keep its headquarters in New York City is evidence of our unique and thriving international business community."

"AIG is a major international insurance company and we are pleased that it is choosing to keep its headquarters in New York City," said Fran Reiter, Deputy Mayor for Economic Development and Planning. "Not only will this agreement keep the company and its 5,180 employees in our City, but it will help AIG finance tenant improvements to its buildings throughout Lower Manhattan. This is an agreement that will have long-lasting benefits."

"Mayor Giuliani has made job creation and retention one of his top priorities and the agreement with AIG is evidence of how great a benefit this is for the City," EDC President and IDA Chairman Charles Millard said. "The impact that AIG has on our economy is significant, both from the immediate tax revenues it generates, and from the "ripple effect" from the vendors who service the company to the restaurants that serve its employees. And with the possible creation of nearly 2,000 additional jobs, AIG will continue to be a top employer in Lower Manhattan."

With this agreement, the Giuliani Administration has now kept 22 major companies in the City, representing 55,082 jobs retained and a projected 18,954 new jobs over the next 20 years through its business retention program. The total tax revenue generated by these companies to the City is $803.55 million a year for the next 10 to 20 years.

In the event AIG does not maintain the specified job level, the agreement calls for the repayment of some or all of the benefits taken, as well as penalties, and/or a reduction or elimination of any unused benefits. In addition, the company cannot take advantage of any benefits tied to job growth until it certifies that it has created the specified number of additional jobs above and beyond those it has agreed to retain.

The company, its employees and its suppliers generate economic activity which results in more than $64.8 million annually in total City tax revenues. As a result, the payback period to the City is just under 7 months.

EDC is the City's primary vehicle for economic development services. Using its real estate and financial resources, EDC helps develop businesses and create jobs throughout the five boroughs.

IDA is a public benefit corporation contractually administered by EDC and established to encourage business development and expansion.



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