Citibank To Spend $10 Million On New Offices For Executives?
Bloomberg is reporting that Citibank is planning to spend at least $3.2 million for basic construction, and as much as three times that much after architects fees and other expenses are paid, to renovate the executive offices at the bank's Park Avenue headquarters.
According to Bloomberg, Citigroup said the project will help it save money over time, as part of a space saving measure.
"Senior executives in our corporate headquarters are moving from two floors to smaller, simpler offices on a single floor," the company's statement said. "Based on estimates made when the project was initiated, we expect to generate savings in the next few years well in excess of the project costs."
The project was initiated in June, before the whole global economic meltdown thing really got going.
The new executive suite will be located on the second floor of Citigroup's office on 399 Park Avenue, a floor below the one Pandit, 52, inherited when he took over as CEO from Charles "Chuck" Prince in December 2007. The second floor previously contained offices, which are being demolished, as well as boardrooms and executive-dining quarters.
Plans and instructions for the bank's contractors, on file with the city, specify the installation of at least one Sub-Zero Inc. refrigerator and icemaker in the renovated space, along with "premium grade" millwork and Madico Inc. "Safety Shield 800" blast-proof window film. The project encompasses 17 private offices, each with space for administrative assistants, as well as two conference rooms and open areas with "soft seating," according to the plans.
Should we freak out about this?
Citigroup May Spend $10 Million for Executive Suite (Update1) [Bloomberg]
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Comments:
This sounds reasonable.
10 million probably won't get you a good office....
just kidding :).
Well, um, at least they are helping stimulate the economy by employing builders?
Or, in other words, "I'm so depressed that I don't even care any more."
Well, on the plus side, at least they're finally spending money in a way that will help the economy, instead of just wasting it on execs who send the money to oversees accounts. Disgusting, but probably the least disgusting thing corporate America has done recently.
What next, we're gonna get angry that they have to buy pencils? Bring out the torches and pitchforks because they need new chairs or computers?
I don't defend these scum bags at all, but shit still has to get DONE too. Okay, so they're redoing their buildings. They're giving money to building companies and decorators. Don't building companies need money too?
The AIG thing? We have a right to freak out over that. This, though? Why get worked up that they're improving their workspaces, which they started before this shit all went down. What do you want them to do, leave it half finished until you decide they can finish?
I dont care.
This should be illegal or something.
I say no, b/c if I have learned anything from TV, spending 10 million on construction/renovating will equal at least twice that down the road when the property comes up for sale.
Bloomberg is reporting that the offices of AIG are using 3-Ply toilet paper and toilet seat protecters that are a paper/cotton blend.
/imagine's Barney Frank getting "spitting mad" over this
Fear not, Citibank execs! I know of some empty buildings in Florida that are empty and move-in ready! Mmmm, free honey.
@Eldritch : maybe people are angry because they think that if your company is in so much trouble they need government help, a $6000 refrigerator probably shouldn't be top of your shopping list
Is the fridge energy star?
But seriously, come on. This is getting absurd, media.
Business as usual, this is needed to keep the talent. We don't know how it works...
"Howard Beale to makeup"
Downsizing isn't free and is actually quite expensive. HOWEVER, the amenities are the points of contention for me. I have no problem with a refrigerator but a $6000 one?
The problem we have is not with making changes, it is the frugality of the choices.
@Trick: Exactly! How can you expect them to keep the best employees if they don't have solid gold toilets to sit on?
@masonreloaded
Maybe true, but I'm convinced that America has and "I know better than you" problem. I'm not going to tell Citi or AIG how to fix their problems, that's there job. If they pay us back (which they will), WTF do I care if they refurnish along the way.
And one more thing, can we PLEASE stop calling this a bailout. Having to give the US Government 5% dividends is a lot of things, a bailout isnt one of them. In fact if the terms of these "bailouts were any more severe, the US Government would be on the Consumerist as a preditory lender!
$10 mil. (before architect fees, etc...) may be a bit excessive, although I'm sure the execs are really feeling the pain and see it as "slumming." In the long run though, the money is not lining the pockets of individual execs, and the money is going into the company for "mostly" tangible assets that the stockholders can account for. It's certainly something worth keeping an eye on (especially when it comes time to tally the entire bill), but nothing to get upset about at the moment...
So if they swap the Sub-Zero for a Maytag with those little ice-cube trays, the subprime market will stabilize?
I don't know how to embed a picture in a comment here, but I got a picture of a 10 million dollar home. If you think that 17 *SEVENTEEN* executives and their personal assistants needs digs that posh to do business you need your head examined. People around here need to get some freaking perspective.
They can renovate after they pay their debt back.
I have worked a few places that were too damn cheap to provide chairs that were decently useable. So this office suite nonsense is a bit beyond the pale. I guess they learned nothing from AIG's trouble with their spa outings or John Thain's multi-million office redecoration.
@Trick:
Yes, the top talent might leave and go to one of the 99% of companies that have a hiring freeze or are laying off people.
Considering it IS on park avenue, and IS for 17 Executives, it should be ok. I mean seriously, wasn't it $2 million just for the BoA guy's office?
Citi laid me off in December. Actually they did away with my entire department. This was right after spending several thousand dollars remodeling the bathroom right next to said department. It was fine the way it was.
I signed a disclosure saying I wouldn't bad mouth the company but I have already received my severance payment now so FUCK YOU CITI!!!! Vikram Pandit may be the biggest idiot in the corporate world. I know that layoffs are a fact of life in the business world and I wouldn't be angry if CITI didn't mismanage everything. Less than a year ago, they completely renovated the lobby of our building with fancy new furniture, artwork and large, plasma monitors on the walls.
My manager's manager called about a month later and offered me a job in a different department and you could tell she was reading off of a piece of paper. I told her in the most pleasant voice I could muster that taking her job offer would be the equivalent of getting thrown off of a sinking ship and as the ship is still sinking, you accept an offer to reboard. I'm going back to school and getting a second degree in something related to the medical field. The baby boomers will ensure that as layoff proof for quite a while.
I'm getting tired of everyone poking their nose in company business now that the gov't owns parts of these companies.
"According to Bloomberg, Citigroup said the project will help it save money over time, as part of a space saving measure."
South Dakota has an excess of space that is a lot cheaper than NYC and Citi even has a little credit card business there...
Love the Sub-Zero in place of executive dining quarters. They truely ARE slumming when execs have to send their own assistant to microwave their daily lunch...
Yay! Now some more construction trades people will have work ... and a paycheck. This is a stimulus effect.
I can't believe the commentors on this board who spend so much of their time defending these companies over and over. Are you guys just copying and pasting at this point? Is your sense of outrage limited to a guy who gets screwed at Best Buy? I don't understand why you would waste your time on these boards.
Great. Cool. Whatever.
I've stopped caring about all of this since it really misses the larger picture. That is, the widespread societal upheaval that should be happening that ultimately never will because everyone knows, even subconsciously, that they've all gotten too fat from the teat of American culture to ever stand up against their banking masters.
I include myself in that latter part.
@Zombie_Belvedere: How is $7 million on imported furniture (most of which is probably made in China despite the hefty price tag) helping OUR economy?
@Radi0logy: This comment is a bit misleading. I mean where's the $10MM home you're talking about? I'm going to guess not midtown Manhattan.. Not to mention you're talking residential versus commercial... two completely different beasts. Have you tried buying a door for your house? dirt cheap... try getting a heavy duty door for say an Emergency Exit staircase access.. or even I solid door for a conference room where you need it because the hollow-core door you pur on your bathroom at home would let everyone outside hear your meeting going on inside.
How about hinges? Some commercial building codes require self-closing hinges in some situations.. Those are an order of magnitude more expensive than a regular old stanley hinge you get at Home Depot. How about desks? Cubicle farms? file cabinets?drop ceilings to allow for electrical and network wiring? raised floors for the same?
I'm sorry but drawing a comparison to spending the same amount on a house is just not valid. Could they save some on this project knowing what they know now, sure.. Is it completely unreasonable? I don't believe so. To skimp so much on a bunch of things on this project would likely devalue the space down the road and negatively impact stockholder value. Walk into nearly any building in Midtown and I'd guess that redoing similar spaces would cost about the same - no matter how cheap the company is... There's just no getting around those realities.
Newflash: $10 million is not that much money.
It is so annoying how all of the media and the slimy politicians (and Consumerist) are all of sudden trying to vilify everything the financial industry does as extravagance.
Oh really? Who were all the idiots taking out the ill-advised loans??? People like you and me.
Who are the idiots who came up with the "Stimulus" package??? The retards in congress and the White House.
There is plenty of blame to share for the mess this ecoonomy is in, and I'm getting tired of hearing about how messed up companies like Citi and AIG are while we continue to throw BILLIONS at them.
Here's an idea: let's quit bailing people out and we won't have to worry if they make a dumb decision with their money because they'll go out of business.
I hope for Citi's sake that they aren't stocking the office supply cabinet with Uniball Micros or something crazy like that instead of some cheaper Bics.
Citi doesn't really need painted walls or carpet, do they?
A "shovel ready" stimulus project? Both stimulus and bailout money?
I voted "too depressed to care" but the pain point here for people is that these executives are living that "executive royalty" life despite having been bailed out by us lowly serfs.
Execs living like kings (gold bathrooms, people to wipe your butt, caviar flown in daily, etc) during boom times is something regular folks dislike but tolerate.
Execs continuing to live like kings after they have basically forced bailout money from regular folks for the execs own stupidity: well that's when people tend to lose their cool a little.
Citibank to spend $10M on new offices. Sorry, you got it wrong. Taxpayer funded welfare to pay for new Citi offices. Does a day go by that this nonsense isn't in the news? Like I said in September 2008, taxpayer funded bailout money is wrong and only lead to more madness. Chapter 11 bankruptcy is available to all companies going belly up. Use it.
@Wormfather is Wormfather: This is the only reasonable reply I've read about the situation. If anything, score one for the beltway PR machine. They've got everyone convinced this is free money, wellfare, and a bailout when it is anything but.
@Oranges w/ Cheese: Repercussions like the fairly high yield dividend these companies are paying the government every quarter for the TARP loan?
WTF - CItibank - I wish they would go away already.
@Wormfather is Wormfather: If I beg you to borrow $1500 because I can't pay my my bills and then turn around and spend $500 on a new TV, I think you'd be asking why you bothered giving me any money in the first place.
Really who cares. Everybody talks about wanting to "stimulate" the economy, well news flash, they're paying that $10 million out to somebody to get the furniture and do the work...
Ironically enough it will probably provide more economic stimulus than anything .gov is doing right now...
I used to work for a financial firm which did extensive work on their offices and furniture. I thought those guys spent excessively on their offices but next to these bailout companies it somewhat makes them look spend thrifty.
Now I work for a company in a different industry that makes us fly coach exclusively even if you're going to India. And our chairs are literally falling apart. When the microwave broke, we got a donation from an employee.
@eldritch (Consumerist, please, please, please fix the reply function. I am using Firefox and had no problem replying before whatever happened on your end happened).
"The project was initiated in June, before the whole global economic meltdown thing really got going."
What bank on this good green earth downsizes their executive offices when things are going good?
This is the proof that they knew the perfect storm was heading their way.
This is just further proof that the media is engaged in a populist fueled with hunt to try to get people as hysterical as possible.
This "hate the corporations" populism has gotten out of hand. Don't even try to explain it away with "well they are using tax money" - over 50% of the population pays no taxes and of those that do, every single one of them has received a bail out ("free" money from the government of some sort).
Subsidized student loans? Government bailout.
Mortgage tax write off? Government bailout.
People have a right to act hysterical once they are paying taxes and not receiving their own bailouts. The number of people doing both is a grand total of 0.
If GM can cut costs by switching from mechanical pencils to manually sharpened ones and not plow the top level of their parking garage then it should not be too much to ask Citibank to postpone construction until they become a viable going concern again.
They did say they would survive, didn't they?
If Citibank needs to downsize while they go under, there are plenty of cheap vacant buildings they can rent. They do not need new headquarters. This is like buying a new fuel efficient car. It takes cash up front that you then won't have for other necessities (like repaying taxpayers) and doesn't pay off until some time in the future, if at all. It is another out-of-touch move by people who are simply addicted to spending money.
Ugh. I'm so glad they feel they can just throw money around still with no repercussions to how asinine the amount may be.
These people are so completely out of touch. Have they never heard of Ikea? I mean, it isn't OMG-cheap, but you can outfit an entire office for under $600 and it will look NICE!