Wednesday, October 14, 2009

Deloitte may move most of its local offices to Chase Tower in downtown Dallas, mayor says

By SHERYL JEAN / The Dallas Morning News

The lengthy courtship of accounting giant Deloitte LLP's growing local offices could be coming to an end soon – with downtown Dallas as the winning suitor.

Dallas Mayor Tom Leppert confirmed Tuesday that Deloitte has agreed to consolidate its Dallas-area operations in its existing office at Chase Tower contingent on City Council approval today of $2 million in economic development incentives. The company also had been considering Irving.

If Deloitte stays in Dallas and adds to its more than 800 employees, it will be another coup for a city that has worked hard to attract blue-chip corporations to help revitalize downtown. Companies such as AT&TCorp., Comerica Bank and Tenet Healthcare Corp. have moved their headquarters to downtown in recent years.

A spokeswoman for New York-based Deloitte said it's premature to discuss its plans.

"We are weighing several alternatives, carefully considering what would make the most sense for our employees, allow for the continued growth we expect throughout the region and help enable us to best serve our clients," said Deloitte's Melissa Norcross Wolf. "We expect to announce a final decision within the next several weeks."

Leppert said Deloitte has not yet signed a lease, but he's confident the company will finalize a lease to consolidate nearly all of its North Texas operations in its existing 150,000 square feet at Chase Tower.

An official with Hines, which owns Chase Tower, declined to comment.

Leppert likened the retention of Deloitte to a new company moving here.

"Clearly, it's a big employer we're retaining, but I think the more important aspect of it is the addition of jobs," Leppert said. "It's pretty hard to come up with another employer that's bringing 450 new jobs. And those are great jobs."

The average Deloitte salary is $100,000, according to a city report to the Dallas City Council Economic Development Committee obtained by The Dallas Morning News. The report estimates that Deloitte would generate an economic impact of more than $3.5 billion to Dallas over 10 years. That impact includes salaries, taxes and spending by employees and clients.

Irving Mayor Herbert Gears said Tuesday that he had "been under the impression for some time" that Deloitte would stay in downtown Dallas after it looked at several sites in his city.

Deloitte employs nearly 500 people at Las Colinas Corporate Center.

Deloitte looked at several Irving sites, including the new Las Colinas Station project, Gears said. Irving did not offer special incentives to Deloitte, but the city helped Las Colinas Station's developer with garages and other public spaces, he said.

If approved, Dallas' proposed $2 million economic development grant would require Deloitte to employ at least 1,111 people at Chase Tower and make $19.9 million in tenant improvements by Dec. 31, 2011. The job creation shouldn't be a problem for Deloitte, which the city estimates would employ 1,420 people at the downtown Dallas office by 2011.

Deloitte plans to add to its already large North Texas footprint by building a $300 million national training center in Westlake. Deloitte received $4.4 million in grants and property tax abatements over 10 years from Westlake and Tarrant County. Construction is to start later this month.

Deloitte's decision to stay downtown would "speak volumes" about the progress in revitalizing the city center, said John Crawford, president of the DowntownDallas economic development group, which also has offices at Chase Tower. The $354 million AT&T Performing Arts Center, which includes the Winspear Opera House and the Wyly Theatre, opened Monday.

"The economic development impact for downtown is enormous, and, frankly, I think this retention ranks side by side with AT&T and Comerica moving their headquarters to the central business district," Crawford said. "This is a sure sign that the central core of our city has firmly turned around."

It makes sense for Deloitte to remain downtown because all the other big accounting firms are there or in Uptown, said Phil Puckett, a real estate broker for CB Richard Ellis.

Downtown office leasing activity fell nearly 80 percent in the third quarter as fewer companies have relocated and existing firms have downsized or closed during the recession. The vacancy rate for Dallas' central business district rose to 29 percent as of Sept. 30, the highest in four years, according to Cushman & Wakefield of Texas Inc.