BRADENTON, Fla. - The recent announcement that Mercedes-Benz will relocate its U.S. headquarters to Atlanta is credit positive for Atlanta and Fulton County, Ga., according to Moody's Investors Service.
The move calls for the company to invest nearly $93 million in the construction of a new headquarters that will employ up to 1,000 people, Moody's said in a special report Jan. 15.
The new facility likely will be built in Sandy Springs, just north of Atlanta, Moody's said.
"Metro Atlanta is attractive to Mercedes, as well as other companies such as Porsche, which recently broke ground on a new headquarters in the area because of its strong connectivity to the Georgia Ports Authority ports in Savannah and Brunswick, and the Hartsfield-Jackson Atlanta International Airport," said analyst Lauren Von Bargen.
The area offers relatively low labor costs and a low tax burden, she added.
The auto maker, a subsidiary of Daimler AG, is negotiating with the Fulton County Development Authority for a $93 million bond issue to assist in building the new headquarters.
Georgia also offered as much as $50 million in tax incentives, according to reports.
Moody's also said the relocation of Mercedes is also credit negative for Montvale, N.J., where the company is the city's second-largest private employer and fifth-largest taxpayer. Mercedes joins a group of companies leaving New Jersey, a highly taxed state, in favor of a southern state where the costs of living and doing business are more affordable, Von Bargen said.
Other companies leaving New Jersey for the south include the Hertz Corp., which announced relocation of its national headquarters to Estero, Fla., in 2013, from Park Ridge, N.J. In June 2014, bubble wrap manufacturer Sealed Air Corp. announced plans to move its headquarters to Charlotte, N.C. from Elmwood Park, N.J.
Moody's said the cost of doing business in New Jersey is the fourth-highest in the U.S., while Florida ranks 14th and does not have a personal income tax. Georgia ranks 20th and North Carolina ranks 48th.
"New Jersey remains a high-income state, with per capita income equal to $36,027, or 128% of the nation," Von Bargen said. "But statewide income growth remains flat given recent job losses and increases in lower-paying industries, such as retail and hospitality."
As the fifth-largest tax payer in Montvale, Mercedes paid approximately $1 million in property taxes. City officials do not expect any loss in property tax revenues because Mercedes will continue to pay taxes until its property is sold to new tenants.
Mercedes officials said the company will keep a Northeast regional headquarters and training center in Montvale, and some operations in Robbinsville, N.J., he said.