Realogy Corp. CEO Richard A. Smith said he "had no desire" to take his company out of New Jersey, even with the prospect of paying less to operate in another state. So as the company drew closer to making a decision, a little interest from Trenton went a long way toward canceling the moving vans.
With the lease at its Parsippany headquarters set to expire in 2013, the global real estate firm was actively seeking a new home in the South — at one point, Smith was inspecting buildings and meeting with developers in North Carolina.
But the Chris Christie administration intervened in mid-2010, helping arrange a $12 million incentive package to convince Realogy to stay put.
"In all fairness to the state, they saved this one," said Smith, whose firm will move to a new 270,000-square-foot headquarters, in Madison, by 2013. "We operate in all 50 states and 100 countries. We could have gone anywhere. We didn't have to be here."
After opting to stay in New Jersey, Smith and the firm are hoping to turn the page on what has been the worst housing crisis in history. As the nation's largest residential real estate company, which owns brands like Century 21 and Coldwell Banker, Realogy was especially hard hit by a decline that Smith says goes as far back as 2005.
"It's been a slow, painful process," said Smith, who also is the company's president and, in March, became chairman of the board of directors. "We're not quite through it yet, but the housing market is starting to correct."
Even with signs of life in the housing market, Smith said foreclosures, high unemployment and uncertainty over federal policy will make for a slower economic recovery. But Realogy is not waiting to expand; its Title Resources Group, which offers title and settlement services, is in the midst of hiring 200 new employees for its Mount Laurel office.
The new hires will add to a work force that already has 1,300 employees in New Jersey and nearly 250,000 sales associates around the globe. Many of those associates work for the firm's franchised brokerages, like ERA and Sotheby's International Realty.
But the futures of its New Jersey employees weighed heavily on Smith and other executives when they were debating whether to leave the state, he said. And they were all too familiar with the realities of such a move: Another of Realogy's business units, Cartus Corp., specializes in employee relocation services for corporations.
"We know what they go through," Smith said. "We know what the costs are and we know the disruption it causes to the family environment, so we were incredibly sensitive to that."
So company leaders were that much more gratified when they were able to remain in New Jersey — rather than North Carolina or Georgia — especially after most employees stayed on board during the most challenging times, he said.
The prospect of moving an entire company hundreds of miles might be daunting to a CEO, but Smith "has very firm convictions" about doing what's best for his company, said Steve Murray, editor of Real Trends, a real estate newsletter based in Littleton, Colo. And being someone who "doesn't scare easily" proved crucial as Smith navigated Realogy through the housing downturn, he said.
"The most important thing he's done for that organization is that he's been steadfast," said Murray, who also is a consultant for real estate firms. "This has been the wildest ride that anybody could have ever predicted … and Richard is still there saying, 'Here's what we're going to focus on. If we do these things right, everything will take care of itself.' "
On the front lines
Smith's time in New Jersey has earned him a strong reputation in the state's business community, said James Simpson, the state's transportation commissioner, who has known Smith for a decade. And he has proven to be a shrewd and energetic corporate leader, Simpson said, calling him "the kind of guy you'd probably seeing wearing a general's outfit, commanding troops on the front lines."
The Realogy chief has become a crusader against the litter and graffiti on New Jersey's highways. Keeping the roadways clean has a clear link to business and economic development, said Smith, who once wrote an op-ed titled "New Jersey: The Garden State or the Garbage State?"
"If you really want to put your best foot forward and market the appearance of the state, quality of life is a big issue," Smith said, recalling that the firm used to fly in prospective employees at night so they wouldn't see the highways.
Smith has hounded state officials about the problem for years, but was unsuccessful until he found an audience with the Christie administration, he said. An important part of that was his relationship with Simpson, which goes back to when Simpson was the CEO of an international moving and relocation company.
"He was sort of the driving force that made me believe that it wasn't just me," said Simpson, whose agency has since launched several programs to clean up litter and better maintain highways.
Smith and Simpson made a point of meeting regularly about several matters, including the highway issue. But it was at one of those meetings that Smith said Realogy was planning to leave New Jersey, allowing Simpson to alert the governor's office.
"We wanted to stay here for all of the obvious reasons," Smith said. "And the state worked hard to make sure we made the right decision."
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