Pandemic prompts Wall Street to look south for Florida’s life and work benefits

December 24, 2020

By Svea Herbst-Bayliss

BOSTON (Reuters) – A bevy of Wall Street executives, bankers and fund managers are abandoning New York for Florida, embracing the Sunshine State over metropolitan New York as the coronavirus pandemic has eliminated many benefits of working from a global financial hub.

Since legions of finance industry employees began working from home in March, Florida’s warm weather, low taxes, affordable space and quick, easy flights back to New York, when needed, have elevated its status.

About 30 major financial firms are “kicking the tires” in South Florida, said Kelly Smallridge, who runs an economic development agency in Palm Beach County. A handful of them are serious about shifting staff there, she said.

Companies including Elliott Management, Citadel and Moelis & Co are among the latest to say they will open satellite offices there or allow their moneymakers to be based in Florida, executives have said.

Goldman Sachs Group Inc is also looking at moving some asset management staff there, people familiar with the matter said.

In the past, Wall Street executives dismissed the idea of locating in Florida because of concerns about schools, culture and networking opportunities.

Much of that has been eliminated as remote working and learning have taken over New York, while restaurants, museums and other venues remain all but closed because of lockdown measures to prevent the virus from spreading.

That has made Florida’s laid-back lifestyle and business-friendly practices more attractive, bankers and investment professionals said.

Florida is part of a broader trend, with big financial companies moving staff from expensive cities like New York and San Francisco to lower-cost hubs in U.S. states like Ohio, Tennessee, Texas and Utah.

For many New Yorkers, Florida seems closer culturally and physically than other states. It is in the same time zone and has more Big Apple expatriates than one might find in Salt Lake City or Nashville, sources said.

Year-round open-air dining is another plus, along with the absence of state income tax. Houses and apartments generally cost less, and commercial rents are about half the Manhattan price in places like Palm Beach County.

“I absolutely love it here and am trying to get some friends to move down here,” said Kevin Couper, senior vice president at Wealthspire Advisors, who moved to South Florida six months ago. “People are able to live their lives down here.”

Couper’s view reflects what many of his fellow executives on Wall Street are saying: If they cannot be in Manhattan’s skyscraper offices and enjoy theater, concerts and restaurants, they would rather be close to the beach.

RISE IN NUMBER OF PATIENTS

Florida Governor Ron DeSantis has prioritized the state’s economy over strict coronavirus protections. In September, he declared Florida open for business, barring local governments from limiting capacity at restaurants even as many other states restricted indoor dining.

Florida is one of 13 states without a mask mandate.

Florida’s coronavirus hospitalizations have increased 32% to 5,634 people on Wednesday from 4,280 on Dec. 1, according to a Reuters tally. That’s the fifth-highest in the country, behind California, Texas, New York and Pennsylvania.

DeSantis supporters argue that his approach has saved jobs and helped Florida businesses.

Couper and others said they take the pandemic seriously, but that people should be allowed to make their own choices about wearing masks and dining out.

Hedge fund Elliott Management, which oversees $41 billion, says it plans to open a West Palm Beach office next year. Its co-chief executive, Jonathan Pollock, has worked from Florida during the pandemic.

Citadel, the hedge fund, expects to open a Miami office next year. Founder Ken Griffin, a Florida native, put the state to the test when he moved some traders from Citadel Securities, his separate electronic trading business, from New York and Chicago to the Four Seasons hotel in Palm Beach.

Blackstone Group Inc also plans to open an office for hundreds of back-office technology staff near Miami, it said.

Goldman Sachs’s asset management arm has been looking at South Florida, sources said. The bank has no specific plans to announce, but is looking to place more jobs in “high-value” locations throughout the country, a spokesman said.

Deutsche Bank Group AG and JPMorgan Chase & Co have long had offices in Jacksonville, while many hedge funds have based around Miami or Palm Beach for years.

Although Moelis does not plan to open an office in Florida, CEO Ken Moelis told Bloomberg TV he was happy to have top dealmakers work from there if they prefer it.

“The pandemic has essentially taken five years of a slow process and accelerated it,” said Alan Johnson, who works with financial CEOs as head of consulting firm Johnson Associates. “Companies realize that you don’t need to be in Midtown Manhattan, and employees are okay with that.”

(Reporting by Svea Herbst; Additional reporting by Lisa Shumaker; Editing by Lauren Tara LaCapra and Howard Goller)

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