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HSBC Staying Put for Now

HSBC’s hunt for alternative office space is over.  The bank, whose lease for 650,000 sq.ft. of space in HSBC Center expires in 2013, had been considering relocating to the Webster Block at the foot of Main Street while also negotiating with current landlord Seneca One Realty LLC on a lease renewal.  Seneca One had offered to build a tower addition on the plaza to keep the bank at the site.  HSBC’s employees make up a sizeable portion of downtown’s private sector workforce.

Neil Brazil, HSBC North America’s Vice President – Public Affairs, released the following statement:

“Following an extensive evaluation process of our real estate needs, HSBC has determined our facilities meet our current needs for the time being, and we do not need alternative space.  We appreciate the interest and support our employees have shown, as well as the engagement of state and local officials throughout the evaluation process.”

The announcement comes two days after the bank discussed efforts to restructure its U.S. operations.  HSBC is currently examining its North American branch network and continue to reduce its mortgage portfolio and shrink or sell its credit card operation. 

HSBC employees occupy 2/3 of the 38-story building straddling Main Street.  The 1.9 acre Webster Block  is bound by Main, Perry, Scott and Washington streets, two blocks south of HSBC Center and directly in front of HSBC’s Atrium office building.

Get out your tea leaves.  And rosary beads.

Have insider information, work for the bank, hear scuttlebut?  Drop us a line.  Anonymity assured.

Written by Sarah Maurer

Sarah Maurer

I moved to Buffalo to attend Canisius College in 2007 and began writing for Buffalo Rising as a journalism intern in 2010. Working with Newell and meeting numerous entrepreneurs, activists and everyday folks who were working to make their city better made a huge impact on my decision to stay here. After witnessing all the positive development and grassroots initiatives happening in neighborhoods throughout the city, I was inspired to pursue a term of service in AmeriCorps and a career in Buffalo’s non-profit sector. I currently work in the housing department at the Lt. Col. Matt Urban Human Services Center of WNY and am excited to be a part of their ongoing efforts to revitalize the Broadway Fillmore neighborhood. I also volunteer as the project coordinator for Artfarms Buffalo. I continue to write for Buffalo Rising because I love having the opportunity to stay connected to those working toward positive changes for the Queen City.

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  • Mike Duff

    I am not sure how to feel about this.
    It sounds to me like the HSBC tower is good enough for now and they’ll make a longer term decision after they let go of a couple thousand employees.

  • elias

    let me get my popcorn…

  • JSmith

    Well, if they *are* going to pull out of Buffalo, I’d rather them just leave HSBC Center vacant then build a new building and then leave them *both* empty.
    If they do stay here, then this is probably the best outcome for downtown Buffalo right now, seeing as how nervous everyone was about what the tower going empty would do to the office space market.

  • flyguy

    Or let the lease run out and then bye bye. Hope not.

  • manski

    I’d focus on the rosary beads.

  • EllicottNick

    What is being done to keep them in Buffalo for more than just the time being? Or are we going to pull a Bass Pro (not that I supported a fishing store) and tell them to $hit or get off the pot? We as a community can afford to have Bass Pro call our bluff; HSBC — we can’t. If Mayor Urkel and Councilman Sharpton aren’t meeting with HSBC leaders and promising them everything under the sun — then shame on us.

  • biniszkiewicz

    This looks ominous. What it says is they aren’t committing to any kind of substantive lease.
    A few years ago I had a client who was very connected (a downstate county chairman of the Republican Party). He insisted then that he had inside knowledge that HSBC was going to pull their management out of Buffalo. He said then that it was a done deal: they wanted to be in Manhattan, where there the pool of banking talent is deep and the location had prestige that Buffalo never would. Their recently announced plans to focus on high income markets dovetails with that prediction.

  • Urban Cowboy


  • DeanerPPX

    This may be good news for now, but definitely has potential to turn sour later on. At the very least, it gives the city and Seneca One some extra time to lobby to keep them in the area.
    If they’re planning on pulling out later (and nothing is done to convince them otherwise), it’s better that they only leave a glut of ONE building rather than two. If they are planning on staying, it gives them some leverage in getting the facilities that they want out of it.
    If they haven’t decided either way, NOW is the time for the city to step up and start convincing them. Waiting a year or two for the other shoe to drop is just going to end up in the same confusion and self destruction we saw last year over the Webster block. The state of NY is going to keep HSBC whether they stay or move to Manhattan, so we can’t look to Albany for help. The action needs to come from the city and county.

  • whatever

    Considering the kinds of functions done by most of the 2,200 HSBC employees still in the tower, the following doesn’t sound accurate:
    Deaner>”The state of NY is going to keep HSBC whether they stay or move to Manhattan”
    I’ve seen reported in the past that HSBC has already quietly moved senior executive functions from Buffalo to Manhattan a few years ago. (That might be what Bini mentioned hearing about.)
    The 2,200 or so still in the tower include a lot of pretty well-paid technical and support professionals, not high-level executives.
    I’d doubt much of that kind of work would move to more-costly Manhattan, but could be moved to many, many places other than here.
    Business First says NYS, Erie Co, and Buffalo govts have already for many months been in talks with HSBC trying to offer incentives to stay. So if they leave, I doubt it would be due to lack of carrots from government, but rather consequences of their overall streamlining plan.—for-now.html
    “City, state and county officials had crafted together an incentive package to keep HSBC’s regional headquarters in downtown Buffalo. They had hoped the bank would not only retain its current workforce, but add more employees.”

  • longgone

    If anyone can’t read between the lines on this…
    And that is not being negative. M&T is just around the corner as well.

  • ExWNYer

    It sounds like HSBC has already made the decision that they are leaving when the lease is up. At least First Niagara is going to be adding jobs over the next few years.

  • Point Given

    They are gone folks it couldnt be any clearer from this, once the lease is up bye bye! When will we ever catch a break???

  • Dagner

    What do you mean by M&T is just around the corner?

  • longgone

    Chris Smith said it best:
    M&T has slowly been moving infrastructure and operations to Baltimore for several years now. The bank has made significant investments lately in the. booming Mid-Atlantc area and the writing is on the wall. Positioning Buffalo as a stateside Bangalore as the BNE/BNP have done is not doing much to attract investment or create a class of entrepreneurs. HSBC will soon vacate Buffalo and M&T will not be far behind them.

  • longgone

    When you stop thinking you catch a break. You do not land or keep major businesses by luck.

  • Point Given

    Its an expression.

  • Point Given

    So we will catch a break when I stop thinking you can catch a break. Makes sense.

  • bobbycat

    I give them 3 more years in Buffalo with an ever shrinking workforce. Too bad they closed their data center here and moved it to Chicago because that would have at least given them a reason to stay a bit longer.
    Someone mentioned Buffalo being a stateside Bangalore. That isn’t likely. The average wage in Buffalo is $15.93 per hour per the Department of Labor statistics, that is higher than most cities our size. Compare it to a Sioux City, ND and wages are almost $3.00 per hour higher here. With our hostile workforce and demand for union scale and benefits I don’t see anyone knocking down the doors to take HSBC’s place.
    I hope First Niagara and M&T double in size so they can pick up the displaced workers from HSBC. If not then there will be a couple thousand more workers leaving WNY to find jobs somewhere else.

  • Amore

    Their management gets rotated all the time and certainly decisions like this aren’t being made locally. I’m not even sure they are made in NY either given their back and forth Chicago NYC trend. I’m not sure anyone knows even in the bank or outside.
    When Brendan McDonagh left the bank it was huge blow for Buffalo. he loved this place, east aurora, was in a top NA leadership position in NYC and saw value in the workforce at low wage salary payments compared to other metro areas. Their is no champion right now for our area in the bank in a leadership position that matters. Buffalo does not have the companies they target. they cut off our marketing money for Q3, Q4, and Q1-2012 this afternoon. Not good signs

  • The Kettle

    I think the sky is falling stuff is part of CS’s act. M+T has been adding jobs here as well as Baltimore.
    I tend to agree with what “whatever” said, if local banking jobs move from Buffalo, they will go to a lower cost area not Manhattan or Baltimore-DC.

  • The Kettle

    Maybe some here are reading too much into this. Could this be simply a matter of a cost conscious business not wanting to construct a new office building?
    FWIW, the commenter “Sally” mentioned how HSBC has been moving back office positions to Buffalo in recent years in another discussion. Not that anonymous blog commenters are always credible sources but she said that this was on their 10-k fillings from the time.
    Another good sign is that Buffalo has historically been a center for back office banking. This doesn’t show any signs of changing as M+T, First Niagara, and Citi have made large investments in the area in recent years. Their success may reflect favorably on HSBC execs.

  • al labruna

    Its impossible to project any multinational business’s plan years out; Goals change, leadership changes, earnings change, the tax code changes, competitors change et al.
    The only constant with business is the bottom line.* Everything else is an ever changing set of variables.
    *thats not a knock, they do what they do.


    Let’s face the facts here.HSBC and every other large company realizes that this area is severely depressed and will not pull out of it anytime soon, if ever.The share holders want profits no matter what and will find them elsewhere.The future of economic profitability is Asia and the far east not in the states and certainly not in western new york.

  • The Kettle

    Karl you work for HSBC? Never would have guessed it.

  • bradman

    I think people need to take a step back, take a deep breath, and try to overcome this ‘Buffalo Always Loses’ mentality where we think HSBC is absolutely positively out of here. Let’s look at some rational points.
    1) They’re trying to cut costs. Of course they’re not going to spend tens of millions of dollars on a new office complex when what they had suits them just fine. I’m sure this drawn out real estate search got them a pretty sweet deal on their space going forward.
    2) HSBC is the #1 bank in Buffalo and, more importantly, they have a surprisingly high number of their target Premier clients compared to other cities. While Stuart Gulliver said some upstate branches didn’t fit with the company and would be sold or closed, they also said they’d be focusing on areas where they have the scale to actually be a major player in the retail market. They have that scale in Buffalo. They don’t have that scale in remote rural branches that are isolated and somewhat disconnected from the rest of the company. I’d guess these are more likely to close than metropolitan branches.
    3) While there will probably be some job losses that doesn’t mean HSBC will leave Buffalo entirely. If the operation performs well then it will continue. As recently as late April HSBC USA CEO Irene Dorner stated publicly that the bank was quite happy with the Buffalo operation. In the current regulatory climate most banks value compliance and competence over the costs of wages and workforce regulation. Buffalo’s workforce is more than just a call center. Important departments like fraud, OFAC monitoring, and underwriting for personal unsecured, mortgage and commercial loans are all based here. Banks pay good money to make sure these tasks are done right and in the big picture Buffalo’s workforce for these tasks may well be a steal compared to higher wage markets.

  • whatever

    Don’t know if it’s what you’re implying, but if anybody is hoping Baltimore’s costs are a lot higher than Buffalo’s, that would sound like wishful thinking. Probably it’s higher there in some ways, but nothing like the difference between either us or Balt compared to NYC.
    For Buffalo’s sake, I’d hope the claim from C.S. is wrong about M&T quietly shifting a lot of work from here to MD. I won’t guess either way if he’s correct unless there’s ever any informed credible reports about it.
    M&T chair Wilmers has always sounded publicly like a big fan of Buffalo, although he’s also been very critical of NYS high taxes.
    About HSBC jobs downtown, from what I’ve heard over the years many are mid-level professional positions at much better pay levels than usual kinds of ‘back office’ jobs. That’s also generally true about M&T and at a smaller number for First Niagara’s jobs here, but I don’t know how they’d compare to the quantity or quality of jobs that other bank co’s (Citi, BoA, etc.) have in WNY. I’d figure the economic impact here of HSBC and M&T are both huge compared to FN, and that here of all other banks even less than FN.
    Btw, curious what’s the clue you’re seeing of Amore being Karl?

  • The Kettle

    Whatever> “Don’t know if it’s what you’re implying, but if anybody is hoping Baltimore’s costs are a lot higher than Buffalo’s, that would sound like wishful thinking. ”
    No need to wish. The Baltimore-DC-Northern VA metro has much higher costs of real estate and wages than Buffalo. That translates into a much lower tab for payroll for similar work done here.
    This Bureau of Labor statistics link shows that Baltimore DC averages about 20 grand per year per employee more than Buffalo for “business and financial occupations.” (Baltimore not including DC is 10 grand more)
    In 2007, the median home price in Baltimore and DC were $278k and $427k respectively versus Buffalo-Niagara’s $91k.
    As far as my buddy Karl, I can just tell by the jokes I guess. Shows I spend waaaaaay too much time on this site.

  • whatever

    Arm, M&T has a big focus in the Baltimore MD market. Why they’d move work from Buffalo to the D.C. part of that mega-metro area isn’t apparent to me. (Hopefully they won’t even move work from here to Balt, but who knows.)
    There’s many “cost calculators” online. Presumably comparisons for business costs are similar enough to what those show.
    Google’s top two results for: city cost calculator
    Using either of those to compare Buffalo, Baltimore, and NYC, results agree with my previous comment rather than your critique of it.
    From 1st link above: Cost of Living Indexes (Overall)
    Buffalo, NY 78
    Baltimore, MD 93
    New York, NY 167
    That shows costs in NYC over double Buffalo’s costs, while Baltimore’s are 19% higher than Buffalo’s.
    2nd link says Baltimore’s costs are 24.6% higher than Buffalo’s, and allows 3 different NYC boroughs to be selected.
    Buffalo NY $100,000
    Baltmore, MD $124,660
    Manhattan $226,123
    Brooklyn $189,655
    Queens $165,935
    Quoting myself:
    whatever>“Probably it’s higher there [Baltimore] in some ways, but nothing like the difference between either us [Buffalo] or Balt compared to NYC.”
    That sounds correct on all counts. I could have even left off the probably.

  • The Kettle

    Baltimore DC are the same metro area. Leaving Washington and parts of VA out of the equation is cherry picking. Although the cost of living stuff you posted for Baltimore alone shows significantly higher costs of living than Buffalo-Niagara.
    That doesn’t mean they can’t move significant operations from Buffalo to Baltimore if they see value in the added expenses. This may ultimately be the case many business move their corporate offices to top 5 metros as they grow (much like Gateway moving from NDakota to SoCal). I just think it is very unlikely that they would be willing to pay on average 10-20k more per employee for work that can be done here just as well.
    Talk of M+T shipping out seems less credible when you consider the work that they have shifted here in recent years. Speaking of which…
    M&T Bank Corp.’s top executive said the bank will create 133 new jobs in Buffalo as a result of its purchase of Delaware- based Wilmington Trust Corp., which M&T wrapped up Monday morning.
    Chairman and CEO Robert G. Wilmers said in an interview that M&T will create the new jobs in information technology, operations, finance, credit and customer service functions. That’s on top of the 5,000 jobs M&T already has in Western New York, up by 1,800 positions since 2000, he said.
    Wilmers said he couldn’t say for certain how many of the jobs are new to the company as opposed to being shifted from Delaware. The bank in February said it would cut 700 of Wilmington Trust’s 2,800 jobs as part of the merger.
    “There are certain services you’ve got to centralize,” he said.

  • caseysmigelski

    M&T slowing moving from Buffalo? I don’t think so…
    Seems like the bank is just being successful and is expanding it’s operations (including in Buffalo, 133 new positions to be created here, up 1,800 jobs here since the year 2000, AND 5000 total jobs in the Buffalo region).