The possibility that JPMorgan Chase would build a
two-towered, $6.5 billion headquarters on the Far West Side of Manhattan
streaked across the skyline in recent weeks, only to die quietly on Tuesday.
Jamie Dimon, chairman of Chase, called Mayor Bill de
Blasio and Gov. Andrew M. Cuomo on Tuesday to say that the country’s largest
bank had decided to stay put on the East Side.
The bank had created a sensation by exploring a proposal
to build a 62-story skyscraper and a second 40-story tower for 16,000 employees
on adjoining parcels on the north side of 33rd Street, between 10th and 11th
Avenues.
But the proposed building project — one of the largest in
New York City history for a single tenant — required the resolution of a number
of thorny issues, including the size of a subsidy package for Chase and the
purchase of the land from Related Companies.
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In the course of negotiations, the bank suggested that
thousands of midlevel jobs could leave the city if the deal foundered. The
mayor, in turn, publicly scoffed at the idea of handing over $1 billion in tax
breaks and cash to Chase, on top of an existing $600 million in property tax
breaks.
“This is an outcome that validates our approach, and our
belief that these deals often come down to factors that have nothing to do with
taxpayer subsidies,” Alicia Glen, deputy mayor for economic development, said
in a statement on Tuesday. “We’re glad that JPMorgan has decided to maintain
its buildings and its work force right where they are for the foreseeable
future.”
Ultimately, Chase was unable to strike a deal with
Related for the two parcels, known as 50 and 55 Hudson Yards. Related set an
Oct. 15 deadline during weeks of negotiations. Rather than wait, Related struck
a deal to sell a major stake in 55 Hudson Yards to a Japanese company.
Related suggested that the bank build one tower and
occupy half of a second skyscraper that Related is building nearby for Time
Warner.
But Chase began reviewing all of its alternatives,
including a move downtown. In the end, the bank decided it would remain at the
two buildings it owns in Midtown, at 270 Park Avenue and 383 Madison Avenue.
Chase also has thousands of employees at the Metrotech complex in Brooklyn.
One executive involved in the talks provided an
alternative explanation: He said the bank’s board decided that it would be
unwise to move to new towers in light of increased regulatory scrutiny in
Washington since the 2008 recession.
Like many financial institutions, Chase has been
increasingly cost-conscious, moving technical and administrative employees to
Brooklyn, Jersey City and elsewhere.
The bank, one of the city’s largest private employers,
has also obtained a total of $324 million in tax breaks from New Jersey, as
well as over $100 million from New York to move to Metrotech.
In the latest round of negotiations, Chase had talked to
city and state officials about a “wish list” of benefits totaling, according to
one account, over $1 billion. Chase said the city would come out ahead, despite
any incentives it might provide.
Critics of corporate subsidies worried that the city
might be returning to an era of retention deals, which had largely disappeared
under Mr. de Blasio’s predecessor, Mayor Michael R. Bloomberg. The Committee
for Better Banks, which includes labor unions and some liberal groups, was
about to issue a report denouncing subsidies for Chase when the deal collapsed.
“New York has had an amazing run of job growth over the
past decade,” said Jonathan Bowles, director of the nonprofit Center for an
Urban Future. “I don’t see the need to turn back the clock and start another
wave of big companies clamoring for tax breaks.”
Source: The
New York Times
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