A 50-minute drive away from Manhattan, the US city of Stamford in the state of Connecticut has long been known only in terms of its proximity to New York City. But now it has a bold ambition: to become a business hub in its own right, rather than just a satellite to New York City.
According to Michael Pavia, the mayor of Stamford, the city is already starting to realise this ambition. He says that, increasingly, the flow of traffic is reversing, with more commuters coming into Stamford from New York than the other way round. “Stamford began as a bedroom city serving New York City, but that is changing,” he says.
Instrumental in the reverse of the commuting trend is the number of large, multinational companies that have established a base in Stamford in recent years. Swiss bank UBS, US hotel and leisure firm Starwood Hotels and Japanese photography company Fuji Films are just some of the names that have set up regional or divisional headquarters in the city.
One of the newest additions to the long list of corporate residents in Stamford is sports television network NBC Sports Group. In 2011, the company announced that it would relocate its operations from the Rockefeller Centre in Manhattan, New York, to a waterfront office in Stamford, bringing an estimated $100m investment to the city and creating 450 new jobs.
Low corporate tax – about half the level of New York's, at 7.3% – and tax incentives estimated to be worth $35m were cited as key reasons for NBC Sports Group's move. “The state of Connecticut has been very aggressive in competing for companies to relocate and Stamford happens to be the principal recipient of these efforts,” says Mr Pavia.
But while offering tax incentives can be an effective way of attracting investments, the concern is that it does not guarantee that businesses will stay in the city in the long term. In fact, Stamford has had first-hand experience of a business moving away once it has benefited from the city's incentive scheme. Champion International, a division of US pulp and paper company International Paper, was attracted to Stamford by tax incentives, but did not stay once it had reaped the rewards of the incentives.
This is not something that worries Mr Pavia, however. “Companies such as Champion International have come to Stamford, created jobs and by doing so fulfilled their obligations. They also maintained these jobs for a number of years,” says Mr Pavia. Moreover, he believes that the advantages of relocating to Stamford are enough to keep most businesses in the area.
“Stamford has a highly educated labour pool and there is no problem with attracting more young people to come and live in the city, as there are places where they can socialise," says Mr Pavia. "This is not a place where people finish work and have no place to go.”
Capitalising on ties
As well as building relationships with companies, Stamford has also established a sister city agreement with Lima, the capital of Peru. The co-operative agreement, which is designed to promote cultural and commercial ties between the two cities, was initiated in 2009 and finalised in 2011. “Peru is the sixth fastest growing economy [in the world] and there has to be a reason for that," says Mr Pavia, explaining the rationale behind the deal. "And Stamford has a very large Peruvian-American population that is very successful."
Lima has 7.6 million residents and Stamford only 120,000. Lima has a GDP per capita of $20,000 while the average annual income in Stamford is nearly four times higher. On paper, the two places may not seem to have much in common but, since signing the sister city agreement, knowledge and experience has flowed between the two places, benefiting both in equal measure.
“In the US, sister cities [are thought of] as an agreement that will simply benefit by the affiliation with a certain city. It is not true in Stamford; the city is learning a lot from what it is seeing in Peru,” says Mr Pavia. He adds that Stamford is interested in launching a public transportation system similar to Lima's, while Peruvian officials have been keen to learn about Stamford’s experiences in recycling and water purification.
Stamford's partnership with Peru's capital is representative of its big ambition to compete with New York City for new business investments. But, perhaps more importantly, Mr Pavia's willingness to collaborate with and learn from a growing economic centre shows a willingness to adapt and improve that could help the city win favour with potential new investors.