NY Post – The city\u2019s hedge-fund executives are flying south \u2014 and it\u2019s not for vacation.<\/p>\n
An increasing number of financial firms, especially private equity and hedge funds, are fed up with New York\u2019s sky-high city and state tax rates and are relocating to the business-friendly climate in Florida\u2019s Palm Beach County.<\/p>\n
And they\u2019re being welcomed with open arms \u2014 officials in Palm Beach recently opened an entire office dedicated to luring finance hot shots down south.<\/p>\n
\u201cFlorida is a state of choice,\u201d said Thalius Hecksher, global development chief for Apex Fund Services, who moved many of his operations to Palm Beach. \u201cIt\u2019s organically grown. There\u2019s no need to drag people down here. It\u2019s a zero-income-tax jurisdiction.\u201d<\/p>\n
There are other perks, too \u2014 like the fact that it was 77 degrees and sunny there yesterday.<\/p>\n
Federal tax rates are the same in Florida and New York.<\/p>\n
But there\u2019s no state income tax in the Sunshine State. Compare that to New York, where the state and local governments took $14.71 of every $100 earned in 2010, according to state records.<\/p>\n
The only state with a higher rate is Alaska.<\/p>\n
And Florida residents lost 3.31 percent of their income in total taxes, versus New Yorkers, who pay just over 5 percent, according to the National Tax Foundation\u2019s latest report, which used 2009 Census figures.<\/p>\n
That\u2019s a substantial difference in bottom line for those who stand to make millions of dollars a year in income.<\/p>\n
Also, commercial property values are much cheaper in Florida, and New York City will likely become even less friendly to businesses when Mayor Bloomberg leaves office next year, hedge-fund executives said.<\/p>\n
\u201cYou weigh all of the benefits for being here to those in New York, and they outweigh them every time,\u201d said Evan Rapoport, CEO of HedgeCo.net, which is expanding its presence in Palm Beach County.<\/p>\n
\u201cThis fiscal-cliff issue, with tax rates continuing to go up. We\u2019re seeing where we\u2019re going with taxes,\u201d he said.<\/p>\n
\u201cIn our industry, the people we\u2019re talking about are $1 million-a-year earners. So when you\u2019re talking about tax rates, it\u2019s more meaningful.\u201d<\/p>\n
\u201cThen,\u201d he said, echoing Hecksher, \u201cthere\u2019s the lifestyle issue.\u201d<\/p>\n
The demand is so high that officials in Palm Beach County have set up an entire office to answer questions from city hedge-funders looking to relocate.<\/p>\n
\u201cWe\u2019re not doing a multimillion-dollar marketing campaign. We don\u2019t need to,\u201d said Kelly Smallridge, who heads the Palm Beach County Business Development Board, which set up the special unit to handle inquiries and marketing.<\/p>\n
\u201cThey\u2019re coming to us.\u201d<\/p>\n
Without warning, Smallridge said, her organization only recently started getting inundated with hedge-funders.<\/p>\n
\u201cThe door was open because of the high-tax environment\u201d in the New York area, Smallridge said.<\/p>\n
\u201cSmaller companies were moving completely out. Larger ones, looking for expansion opportunities, wanted to expand here,\u201d she said while touting her group\u2019s \u201cfree and confidential\u201d consulting services.<\/p>\n
The firms can easily pick up and move out of the New York region because technology allows them to do their work anywhere, she said.<\/p>\n
That\u2019s exactly what Hecksher \u2014 whose company services hedge funds around the world \u2014 did when he was looking to expand the firm\u2019s US presence.<\/p>\n
New Jersey-based Apex, he said, could easily have chosen Manhattan or Greenwich, Conn. \u2014 but instead, the company followed the industry to the tax-friendly Sunshine State.<\/p>\n
josh.margolin@nypost.com<\/p>\n