Diageo Signs 277,700-SF Lease in Norwalk

NORWALK, CT-In a deal that will involve the relocation of its US headquarters operations from Downtown Stamford, Diageo North America Inc. has signed a 15-year lease for 277,700 sf at Building and Land Technology’s Towers at Merritt River Corporate Campus here. The lease deal involves the entire 801 Main Ave. building, which is currently under construction. Building and Land Technology president and CEO Carl R. Kuehner III says the cost of the seven-story building will exceed $100 million. Diageo is expected to take occupancy of the seven-story building in March of 2005.

Commenting on the deal, which is the largest lease transaction in the past five years in Fairfield County, Kuehner says, “This commitment is an affirmation of the strategic importance of Southwestern Connecticut.”

He also notes that his firm will begin construction in the next few months on a 350,000-sf office building at 1001 Main Ave. here. To date, the firm has not signed any tenants for that property. The Towers at Merritt River also includes the 250,000-sf regional headquarters for Hewitt Associates at 1001 Main Ave. and the Merritt on the River property, a 240,000-sf building that at one time was the corporate headquarters for the now defunct Caldor retail chain. Nearby is the Merritt River Apartments, a 227-unit residential complex that Building and Land Technology sold last month for $60 million.

Joe Garvey of CLW of Tampa, FL, represented Diageo North America, while Christine Georgopulo, leasing director at Building and Land Technology, represented the ownership of the 801 Main Ave.

Diageo North America, which, brokers say, had considered some properties across the New York State border in Westchester County, is eligible for a significant incentive package from the State of Connecticut in connection with the deal. Oley Carpp, managing director of the Office of Business Recruitment for the Connecticut Department of Economic and Community Development, says that Diageo is eligible for approximately $40 million in tax credits; up to $1.8 million in sales tax exemptions on the construction costs of the project as well exemptions on real and personal property taxes.

Carpp says that negotiations with Diageo are still ongoing, but the state is hopeful a final agreement can be reached in the next few weeks. The company will keep 700 jobs in the state as well as add another 300 positions in the future.

Diageo is a major drinks business that boasts a $42-billion market capitalization. The company’s brands include Smirnoff, Johnnie Walker Red, Guinness, Bailey’s, J&B, Captain Morgan, Jose Cuervo, Tanqueray, Dom Perignon, Moet & Chandon, Gordon’s, Seagram’s 7 and Crown Royal.