Office Towers Transform the Face of Dublin
Mention Dublin and a foreigner’s apt to think of James Joyce and pints of Guinness, of stuffy pubs and slow rains, of a city still raking over the embers of yesteryear’s romance and rebellion.
But a new Dublin of office towers and yuppie apartments is sprouting alongside both banks of the muddy River Liffey, gradually consuming derelict docklands and drug-plagued public housing. And 1996 was a record year for those putting a white collar on this dirty old town.
“No one 10 years ago would have guessed, really, how successful this was going to be. Dubliners would have been fairly cynical,” said Brendan Logue, in charge of promoting the capital’s International Financial Services Center, a hub for attracting foreign interest.
The IFSC, a complex of trading floors, banks and a new hotel on the Liffey’s north side, is marking its 10th birthday by noting that it employs 3,500 people in 420 companies, way above its original optimistic estimates. Many of the world’s big international banks and fund managers have set up shop--Bank of America, Citicorp, Chase Manhattan, Merrill Lynch, Bankers Trust, Fidelity--and the Irish hope to attract more.
“When Merrill Lynch set up here, that says more to Goldman Sachs and Salomon Brothers or Morgan Stanley--all companies that haven’t yet come to Dublin--than any sales pitch I can make,” Logue said.
The center has found a niche--workers running back office operations, the unglamorous paperwork for deals done in the more high-profile business capitals like London or Paris.
The boom capitalizes on Ireland’s chronic ability to produce more well-educated, English-speaking people than the domestic economy can absorb.
The Irish government has given companies incentives to locate in Dublin. Those that do so under the auspices of the IFSC will enjoy a 10% corporate tax rate until 2006 at least. Businesses also pay no tax on dividend and interest income, or on capital gains from investments in Dublin.
But Ireland isn’t the only European center trying to market itself as the best bargain in Europe. Luxembourg, Holland, Belgium and Trieste, Italy, are offering stiff competition.
“American institutions in Europe are driven by cost considerations. But they’ll only open up or move their operations if they see the carrot. And let’s be blunt: They want lots of bright, young people cheap,” Logue said.
Helped by the influx of business, Ireland has boomed throughout the 1990s, its average gross domestic product up just under 5%. Its performance has been buoyed by a declining deficit, inflation around 2%, and a designation as a less wealthy member of the 15-nation European Union, which has plowed $15 billion into this land of 3.5 million people to build up its infrastructure.
It all meant new projects in 1996 representing a potential 19,000 new jobs, 3,600 announced in December alone.
The biggest success story is in computer hardware and software, where virtually all the major players from IBM to Microsoft to Intel to Apple have Ireland as a manufacturing base. IBM on Dec. 12 unveiled plans for another plant in suburban County Dublin making storage disks.
Citibank, already an IFSC tenant, on Dec. 4 announced it would concentrate its new European back office in Dublin, creating 900 jobs, some of them transferring from New York.
Sweetening the deal is the Industrial Development Authority of Ireland’s willingness to reward companies with a grant of up to $16,000 per job.
Bob Kelly, a Londoner overseeing Citibank’s expansion in Dublin, said the bank had housed its back office operation for Europe since the mid-1970s in increasingly cramped quarters in south London.
“We were always looking outside England to expand and shift some of the workload, and Dublin scored quite highly,” Kelly said.
“The grants available here are no better than other countries. The key thing I need is a balance of people with the ability to speak different languages and we’ve got that in abundance here,” he said.
The biggest problem Citibank may face, Kelly said, is finding enough space for its work force. Dublin’s real estate market is booming--residential property values were up 15% in the past year, and large-scale office space wasn’t far behind.
“Dublin is a very popular place all of a sudden,” Kelly said.
Logue says the Irish efforts have been paid the ultimate compliment in recent months. When joint government-business delegations go overseas pitching for fresh business, they find the locals picking their brains about how to set up a financial center like Dublin’s.
