Mercedes-Benz USA HQ Finds New Home

New Jersey’s loss is Georgia’s gain, as the German automaker decides to relocate its headquarters to a warmer climate.

Montvale, NJ headquarters

By Gail Kalinoski, Contributing Editor

Saying it is designed to better serve its customer base and strengthen the company’s position for long-term, sustainable growth, Mercedes-Benz USA will move its U.S. headquarters from Northern New Jersey to Atlanta.

The German automaker said it will start relocating employees from its Montvale, N.J., offices to a temporary facility in Atlanta’s Central Perimeter on an interim base in July. About 1,000 employees will be affected so MBUSA will phase in the move.

MBUSA plans to build a new state-of-the-art headquarters in the Atlanta area for about $93 million by 2017. The Atlanta Business Chronicle is reporting that Daimler AG, the parent company, is considering a seven-acre site at Georgia 400 and Abernathy Road in Sandy Springs, Ga., to build a 250,000-square-foot headquarters.

“Atlanta is a premier city which places us closer to our ever-growing Southeast customer base, our port in Brunswick, Georgia, and to Mercedes-Benz U.S. International, our Alabama manufacturing facility, which accounts for half of the vehicles we sell here in the U.S.,” MBUSA President & CEO Stephen Cannon said in a news release. “For our employees, Atlanta offers a strong quality of life, terrific schools and wonderful cultural and recreational opportunities.”

MBUSA has been in Montvale in Bergen County since 1972 and currently occupies four buildings. The company said it will keep several operational areas in both Montvale and Robbinsville, N.J., after the headquarters is relocated.

“New Jersey has been a wonderful home to our U.S. operations for our first 50 years, and still is today,” Cannon said in the release. “The state has worked tirelessly with us as we evaluated our options. Ultimately, though, it became apparent that to achieve the sustained, profitable growth and efficiencies we require for the decades ahead, our headquarters would have to be located elsewhere. That brought us to Atlanta.”

A spokesman for New Jersey Gov. Chris Christie told Commercial Property Executive Christie took “a direct role in trying to keep Mercedes-Benz USA in New Jersey, including a series of meetings and calls with its CEO. In each conversation Mercedes USA made one thing very clear about its decision to leave – the cost of doing business and the tax environment is just too high here to be competitive with a state like Georgia. This only reinforces Governor Christie’s repeated calls to lower taxes and change the business climate if we are to keep more jobs in New Jersey and attract new ones.”

New Jersey’s loss is clearly Georgia’s gain, according to Georgia Gov. Nathan Deal who called the relocation a “huge win for our state.”

Deal cited his state’s “pro-business environment and strategic resources” as reasons for MBUSA’s decisions.

MBUSA did not specify any incentives it could receive from Georgia or Fulton County for moving to the Atlanta area. But the Atlanta Business Chronicle reported it had been offered from $40 million to $50 million in incentives. The Associated Press noted that the Fulton County Development Authority met briefly Tuesday to talk about an incentive package for MBUSA but did not release details. Bloomberg reported MBUSA is asking the development agency to sell municipal bonds to finance the project with the car company leasing the land from the FCDA for 10 years.

Bob Hess, executive managing director, consulting, with Newmark Grubb Knight Frank Global Corporate Services, told CPE incentives are “gravy” but not the only reason a major company like MBUSA would relocate its headquarters.

Hess, who did not work on the MBUSA deal, said he was familiar with New Jersey’s economic development team and is certain they were also aggressive when offering their incentive package to the car company.

Robert Martie, executive vice president, NJ region, Colliers International, agreed, noting the state has had recent success with its Grow NJ incentives program.

“While some tenants such as Mercedes-Benz leave to undertake their long-term business initiatives, others commit long term and expand in the process,” Martie told CPE. “New Jersey continues to be a dominant contender in attracting and keeping jobs in a rapidly evolving global business landscape.”

Hess said companies like MBUSA are “constantly evaluating their options because the world changes quickly.”

“It’s about the business and the customer base,” Hess added. “The whole automotive business has been migrating to the South and Southeast for decades.”

He noted that other German companies like Porsche, also a luxury car manufacturer, have been heading South in recent years in part because of the accessibility to global transportation like Hartsfield-Jackson Atlanta International Airport. Porsche, currently in Sandy Springs, will move next year to a new $100 million headquarters near the airport that will include a 150,000-square-foot office building and a test track, according to 11 Alive, an Atlanta television station.

MBUSA will be the latest automaker to move operations and headquarters to the South. Last April, Toyota, citing similar reasons, announced it was moving its North American headquarters and about 4,000 jobs to Plano, Texas. About half of the relocated jobs would come from Torrance, Calif., while others would move from Erlanger, Ky., and New York City.

JLL, which also worked with Toyota on moving from Southern California to Plano, provided site selection, economic incentives consulting, tenant representation, capital markets and project development services to MBUSA. Michael Sessa and Meredith O’Connor from JLL’s Chicago office; Brad Selner from the Dallas office and Rob Metcalf from JLL’s Atlanta office are serving as project leads on the MBUSA relocation.