NORFOLK, Va. (WAVY) — Norfolk Southern’s corporate headquarters could be on the tracks to a new city.
The decision could be announced within weeks if the railroad giant will move its downtown Norfolk headquarters to Atlanta. The deciding factor could be an incentive package that could be voted on by the Atlanta City Council later this month.
The question is how will a move impact the bottom line here? 10 On Your Side was told the decisions are not necessarily made here, but made by the corporate board of directors that may not be in Norfolk, or from Norfolk, or have any loyalty to the Mermaid City.
The Fortune 500 corporation is planning and developing its next long range plan.
It’s hard imagining a Norfolk Southern not headquartered in Norfolk.
“It is not looking good, obviously, if the mayor is saying this is an uphill battle, and our fate maybe sealed, then we can all read into what that means,” said ODU Associate Vice President of Economic Development Dr. Chip Filer.
So the question is: if Norfolk Southern leaves, then why did they leave? The answer is probably not because they didn’t like Norfolk or the region, according to Filer.
“It is more pull than push. Norfolk Southern has a relationship in Atlanta, they have stuff in Atlanta. It’s not like they are just out of nowhere. They aren’t shopping this around to any city to possibly get the heck out of here,” Filer said.
Norfolk Mayor Kenny Alexander told 10 On Your Side the $1.75 billion in incentives in Atlanta probably did the trick, but the Mayor also said that Norfolk Southern will have corporate obligations here until 2026.
There have also been discussions among city council members on this for a long time.
CEO James Squires has also told Wall Street about possible streamline operations and cutting costs. This would do that.
“Perhaps they sat down and realized they could consolidate all the operations, all the high level administration positions, in one locality, and the best place to do that is in a larger metropolitan areas” says Filer.
The impact hits regionally, not just in Norfolk, but at the Virginia Beach Oceanfront as well.
“It’s going to hurt our housing market, and our charitable giving. The 200 jobs that could be lost I’m sure they didn’t spend all their money in Norfolk,” said Virginia Beach City Councilwoman Rosemary Wilson.
Norfolk Southern declined our requests for an on camera interview but sent us this statement when asked why they maybe moving.
Norfolk Southern sent the following statement to 10 On Your Side:
Norfolk Southern is in the process of developing its next long-range plan. That effort is considering many courses of action, including the possibility of consolidating headquarters into a single location. Our long-range plan is complex and will take time to develop, and Norfolk Southern will publicize our plans and decisions when appropriate. Until then, our focus will be on the plan’s development.
To put Atlanta’s $1.75 billion incentive plan into perspective, Norfolk’s entire annual budget is just over a billion dollars.
If it comes down to incentives, it’s no match. Atlanta wins and Norfolk loses.
10 On Your Side also found out Thursday that Norfolk losing the Norfolk Southern headquarters is not something new. Just ask former City Councilman Andrew Protogyrou, “I know we’ve known about it for a period of time. There’s always been discussions about it.”
10 On Your Side followed up by asking Protogyrou if he knew this could possibly happen, that Norfolk Southern could leave and go to Atlanta?
He said yes, and everyone on the city council knew it was a possibility.
“No, I was not surprised,” Protogyrou said.
Here’s a reason to keep Norfolk Southern here.
If it ain’t broke, don’t fix it. Norfolk Southern is killing it on Wall Street.
Its stock is up 25 percent in nine months compared to the industry average of 19 percent. However, the flip side of that is analysts say the stock is up because of cost cutting and volume. Consolidating the corporate headquarters in Atlanta could be seen as a type of cost cutting.