The Hertz Corporation (NYSE: HTZ) announced that it plans to relocate its global headquarters from Park Ridge, New Jersey to Estero in Lee County, Florida.
The ostensible reason given for the relocation is that they need to consolidate operations in one location after their acquisition of Dollar Thrifty, which is based in Tulsa, Oklahoma.
As the company moves its corporate operations to Estero, Florida will gain 700 high-paying jobs with average annual wages of $102,000, not including benefits.
The company’s current employees in Park Ridge will be able to retain their positions in the new headquarters in Florida. Dollar Thrifty and Hertz together have more than 2,000 employees in New Jersey and the NYC metro area, who will remain there, including about 150 in Park Ridge.
The company will retain eCommerce and other financial services functions in New Jersey, while Oklahoma will retain IT, customer care and some financial support functions.
Hertz chairman and CEO Mark P. Frissora said the relocation should not be taken as slight of Oklahoma or New Jersey, because both states have undertaken significant job creation and business climate improvement efforts.
He added that New Jersey would have continued to be their home indefinitely had it not been for the Dollar Thrifty acquisition. Frissora specifically singled out the New Jersey Partnership for Action (NJPAC), which he said had been very active in their efforts to get Hertz to stay in New Jersey.
But NJPAC was never going to win this one, because relocating to Florida allows Hertz to be in the middle of America’s biggest travel and tourism market. Florida rents more cars per capita than any other state, and Orlando is the largest car rental market in the world.
More specifically, Lee County was chosen because of its diverse community, easy accessibility to the major tourism markets, and an available workforce. The county also recently agreed to reduce the impact fees they charge for development work on new projects, which makes it easier for Hertz can get all the site improvement infrastructure they need.
State and local authorities in Florida have been working on the Hertz project for nine months, and have offered the company $19 million in incentives for the relocation.
As per the agreement the company has entered into with Lee County and Florida, Hertz will invest $46.25 million by the end of 2014 for the relocation and construction of a new corporate headquarters in Estero. They will also create 350 jobs by Sept 30, 2015. In return, Lee County has approved $4 million and the state is chipping in with another $14.4 million.
Hertz will get $7 million right away from the state, and another $2 million from Lee County when it fulfills the aforementioned investment and job creation commitments by Sept 2015.
To receive the balance from both Lee County and the state, Hertz would have to add at least another 350 jobs for a total of 700, and must make a capital investment of $60 million.
While the new corporate campus in Estero is being built, Hertz is looking at three other locations for a temporary headquarters.