Riverfront to be home of Sallie Mae spin-off
WILMINGTON—The headquarters of a new company spinning off from Sallie Mae will be located in Wilmington, the student loan provider said Wednesday.
The move is expected to bring about 120 jobs to the city by year’s end.
Sallie Mae, based in Christiana, is in the process of splitting into two companies. One, Navient, will be headquartered at the Riverfront, in 40,000 square feet of the Star building at 123 Justison St.
“This is a strong signal that Wilmington remains a good investment option for businesses and is a preferred location to settle,” Mayor Dennis P. Williams said in a statement.
Officials at Sallie Mae cited the location in the developing Riverfront section as well as its proximity to the Amtrak station and other businesses as factors in the decision.
The new company is expected to service more than $300 billion in student loans. Sallie Mae, which will remain in Delaware, will transition to commercial banking.
Navient will be created later this year as an independent publicly traded company, listed on Nasdaq under the symbol NAVI. Sallie Mae, which will continue to trade under SLM, currently employs about 1,200 people in Delaware and 7,200 nationwide.
The city of Wilmington’s Office of Economic Development awarded Navient $750,000 for the creation of 120 positions. The company also is eligible for a five-year exemption on a monthly $15 tax levied on each employee.
Sallie Mae has applied to the Delaware Economic Development Office for an amendment to the financial incentive package offered when it announced in 2010 it was moving to Delaware. Proposed changes would need to be approved at a board meeting later this spring.
Together, Navient and Sallie Mae expect to employ at least 1,750 people in the state by 2016. Of that total, 950 jobs are expected to be at Navient. If the companies meet that goal – and requirements for the types of jobs created – they would be eligible for up to to $5.64 million from the state. The money is paid as new jobs are created, and the companies are required to maintain them for at least five years, said Alan Levin, director of the Delaware Economic Development Office.
The earlier agreement worked out to about $12,100 per employee, a figure that included the state’s capital outlay, Levin said. The proposed change would give the company about $3,000 less per employee.
“We are not as aggressive as we were in the original offer,” he said.
The Wilmington building is owned by Pettinaro, which signed a 7-year lease with the company. Other tenants in the building include DuPont, Grant & Eisenhofer and Bernardon Haber Holloway Architects.
“I think it’s great to get a new employer like that into the city of Wilmington,” said Gregory Pettinaro, chief executive officer of Pettinaro.