Time Inc., the publisher of Time, Sports Illustrated, People, and many other magazines, is planning a move from Midtown to downtown Manhattan, with the help of public subsidies. WNYC has learned the terms of the deal allow Time to cut close to one third of its jobs, with no penalty.
Last year, Time was reported to be looking for a smaller headquarters in New Jersey. New York State responded by awarding the publisher a package of grants and tax breaks worth $10 million to stay in New York. At the time, the exact terms of the package were not reported.
Government subsidy deals often include a guarantee to add or retain jobs. But according to documents obtained by WNYC, Time can cut its staffing from 2,917 to as low as 2,000, by the end of 2017 – or nearly a third – and still keep a $7 million grant under the World Trade Center Job Creation & Retention program.
Time also got a $3 million Excelsior Jobs Program tax credit. The company pledged $150 million in investments in its new offices at Brookfield Place, near the World Trade Center, in order to secure the tax break.
“It is unusual when you see a subsidy deal like this that is going to a company where it's generally assumed they're downsizing,” said Elizabeth Bird of the group Good Jobs New York, who requested the state document.
Time Inc. was spun off of the Time Warner media conglomerate last year. In a federal filing last December, Time said it will cut costs by sending jobs overseas: “We anticipate additional headcount and efficiency measures in the future including global sourcing of personnel, streamlining the editorial process, centralized procurement, and further elimination of duplication across brands.”
In January, Sports Illustrated laid off its entire staff of six photographers.
Just months before the subsidy package was announced in May 2014, an attorney with New York's Empire State Development office, Lawrence Jacobs, left ESD to become general counsel at Time, Inc. Both Time and the ESD said Jacobs was not involved in the subsidy deal. Time first approached ESD for assistance in February 2014; Jacobs left ESD in October 2013.
In an emailed statement, Time said it is "very pleased to be staying in New York, and is looking forward to participating in the revitalization of lower Manhattan, where its main headquarters will be located for many years to come. While we received a compelling offer to relocate to New Jersey, the New York State Incentive Programs, including the WTC grant, combined with attractive lease terms, are keeping us in New York."
Empire State Development defended the deal as necessary to prevent companies moving to New Jersey. A spokesman for the ESD in an email said, "The bottom line is our efforts will result in thousands of jobs staying in New York."
ESD did not say how common it is for its jobs-related subsidy programs to allow substantial employment cuts without penalty. But a review this year of ESD’s programs by State Comptroller Thomas DiNapoli noted that the organization “makes no public assessment of whether its disparate programs work effectively together, whether such initiatives have succeeded or failed at creating good jobs for New Yorkers.”