UPDATED: Norfolk Southern’s relocation to Atlanta is official

UPDATED: Norfolk Southern confirmed Wednesday its plans to relocate from Virginia to Atlanta at a press conference at the State Capitol.

The company’s move will lead to 850 new and relocated jobs to the city over the next several years, and retain some 2,000 existing corporate jobs in Midtown.

Norfolk Southern Chairman and CEO said in a news release the move to Atlanta will allow the Fortune 500 railroad to have all its decision-makers together when its new Midtown campus opens in 2021.

“Alignment, collaboration, and accountability are the hallmarks of Norfolk Southern’s plan to transform this company and its culture. Our new headquarters in Atlanta advances these key elements of success,” Squires said in a news release. “Our potential has always been great and now is greater still, as we bring together all of our headquarters functions into a single, integrated team.”

The new headquarters campus at West Peachtree Street and Ponce de Leon Avenue will be developed by Atlanta-based Cousins Properties. Norfolk Southern recently was awarded nearly $24 million in property tax breaks by Invest Atlanta, the city’s development arm, and state tax credits could raise the value of incentives by millions more.

Gov. Nathan Deal called Georgia, a major transportation and innovation hub, “a fitting home for Norfolk Southern’s new headquarters.”

“This announcement also reinforces Georgia’s distinction as the Southeast’s gateway to global commerce,” he said. “We appreciate Norfolk Southern’s significant investment in Fulton County and look forward to celebrating the company’s future growth and continued success.”

Norfolk Southern is Georgia’s 21st Fortune 500 company.

“With a shared history dating back to 1846, we are proud Norfolk Southern now calls Atlanta home,” Atlanta Mayor Keisha Lance Bottoms said. “This relocation was made possible, in part, by the passing of the Gulch deal and is a reminder that great things happen when our public and private sectors work together.”

The original story continues below. 

Original post: Gov. Nathan Deal and Atlanta Mayor Keisha Lance Bottoms are expected Wednesday to formally announce a completed deal to relocate the headquarters of railroad giant Norfolk Southern to Atlanta, two people with knowledge of the situation told The Atlanta Journal-Constitution.

Deal has called a 2 p.m. press conference at the State Capitol in what will mark the culmination of years of work to recruit the Fortune 500 railroad away from its home in Norfolk, Va.

Spokespeople with the city and state Department of Economic Development declined to comment. A Norfolk Southern representative did not immediately return a message seeking comment. The people who spoke to the AJC about Wednesday’s press conference were not authorized to comment publicly.

Norfolk Southern joins PulteGroup, NCR and Mercedes-Benz USA among major global or North American headquarters recruited by the state over the past 10 years.

The announcement has been expected. The Norfolk Southern recruitment became one of the most public ever conducted under Deal after it was learned the railroad wanted to sell its land holdings in downtown Atlanta's Gulch in order to fund a potential move to Midtown.

The Gulch land, meanwhile, forms the core of what developer CIM Group wanted to buy to build a mammoth 40-acre mix of apartments, offices, hotels and retail between the Five Points MARTA station and Mercedes-Benz Stadium.

Norfolk Southern's proposed relocation became almost a footnote amid a tense months-long debate over whether the Atlanta City Council would support an unprecedented incentive package for CIM to redevelop the lonely stretch of downtown parking lots and rail beds.

In late October, as the debate over a nearly $2 billion public financing package for the up to $5 billion Gulch development hung in the balance, Norfolk Southern CEO James Squires leveled a threat, saying his company wouldn't move to Atlanta if the Gulch deal fell through.

“I would hate to see this slip away,” Squires told Atlanta Business Chronicle days before the council approved the package. “But if it does, we will move on.”

Last week, the city of Atlanta’s development arm, Invest Atlanta, approved $23.6 million in tax breaks for Norfolk Southern’s future headquarters campus in Midtown at West Peachtree Street and Ponce de Leon Avenue. State tax credits for newly created jobs and other perks could increase the value of the incentive package by millions more.

Norfolk Southern plans a 750,000-square-foot tower totaling about $575 million, according to an Invest Atlanta document. The company is expected to relocate or create 850 jobs and retain more than 2,000 jobs currently located in Midtown near the Woodruff Arts Center.

The railroad has deep ties to Atlanta, tracing its roots to a predecessor here, and the company has more jobs in Georgia than in its home state of Virginia. The company recently expanded its Midtown operations center.

Norfolk Mayor Kenny Alexander said in an interview with the AJC that he had not yet received formal notice from Norfolk Southern.

In October, Alexander vowed not to enter a bidding war to keep the headquarters, noting that the railroad is obligated to maintain a major presence in his city through 2026. He said then the Atlanta City Council should not feel pressured by Norfolk.

Alexander said the railroad is under intense pressure to improve profitability and he said he understands the business case for consolidating operations.

“If this is happening, I wish them well, but I hope they will continue to have a large corporate presence in Norfolk,” Alexander said Tuesday. “They’re a great corporate citizen.”

What it means

In Norfolk Southern, Georgia lands yet another Fortune 500 headquarters and 850 new or relocated jobs. The railroad plans a nearly $600 million campus in Midtown. The recruitment comes at cost — about $24 million in property tax breaks for the company’s future campus and likely millions more in state tax credits and other perks. Norfolk Southern reported revenue of $8.6 billion in the first nine months of 2018, and net income in that time of nearly $2 billion.