The backstory of Buzzfeed’s New York tax credits
Buzzfeed explored the option of moving 200 of its employees to office space in New Jersey before New York's chief economic development agency entered into an agreement giving the company $4 million in tax credits to promote the retention and creation of in-state jobs, Capital has learned.
"While we would likely continue to maintain an office in NYC for employees who meet frequently with others in NYC...the pricing differential between the real estate we have seen in NYC and the real estate in New Jersey indicates that relocating 200 of our current employees to a New Jersey office may make sense," the digital media powerhouse said in an application to New York state's Excelsior Jobs Program, obtained by Capital through a F.O.I.L. request.
According to the release announcing Buzzfeed's deal with the Empire State Development Corp. the company had "considered several other locations" before committing in December to keeping the majority of its workforce in New York City, its headquarters since its founding in 2006. (The company, whose edit team is now based at 40 West 23rd, has signed a lease for 200,000 square feet on the 11th through 16th floors of 225 Park Avenue.)
Buzzfeed has promised New York State that it will create 475 new in-state jobs over the next five years and retain its current New York workforce of roughly 400 employees. In its application, the company estimated that 100 of those new jobs would dedicated to video production, implying an intention to split its video operations between its Los Angeles and New York offices: "If we receive assistance from the state, it would make it economically viable for us to locate more of the video jobs we expect to hire for in New York as opposed to continuing to base our all of our video production in L.A."
Claiming video as a "significant investment area" in its tax credit application, Buzzfeed has begun posting jobs listings for video producers based in New York or Washington D.C.
Having just raised $50 million from the venture firm Andreessen Horowitz last August, the digital media firm cited the "excessive" expenses of New York City rents and building out a studio for its New York video team as the main hindrances to establishing permanent headquarters in New York. The specific New Jersey office locations that Buzzfeed said it had considered in its application were redacted in the copy Capital obtained.
“New York is tricky, New York is not easy to grow in,” Buzzfeed chief financial officer Mark Frackt said at Capital's TAMI Talks event in New York last October. “When you are American Express or Sony, and you are growing at a rate that is fairly predictable on an annual basis, you can plan your real estate more practically, when you are a high-growth company, it is frankly harder to do.”
Buzzfeed would not have been the first New York-based media company to move employees across the Hudson River: Forbes Media decided to relocate 350 staffers to Jersey City after the New Jersey Economic Development Authority approved the publisher of Forbes magazine for $27 million in tax credits under the Grow New Jersey Assistance Program, the garden state's initiative to attract businesses and promote job creation.
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