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N.Y. / Region|Chase Bank Set to Build Tower by Ground Zero


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N.Y. / Region

Chase Bank Set to Build Tower by Ground Zero


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After months of sharp bargaining and threats to relocate, JPMorgan Chase is expected to announce today that it has struck a deal to build a skyscraper near ground zero and move its investment banking headquarters from Midtown, according to government officials and real estate executives.

The bank’s planned 42-story, 1.3 million-square-foot tower would rise at the corner of Greenwich and Cedar Streets, the site of the soon-to-be demolished former Deutsche Bank building. Chase plans to move thousands of executives from its Midtown offices at 277 Park Avenue to Lower Manhattan, in what is widely regarded as a boost for the downtown district. It will keep its world headquarters at 270 Park Avenue.

The move would be a reverse in the traditional migratory patterns of financial institutions, which have been moving from the financial district to Midtown for more than 30 years. Government officials and downtown business executives have said that Chase’s move would re-establish Lower Manhattan as a world financial center and validate the trade center as a commercial complex.

Word of Chase’s impending deal with Gov. Eliot Spitzer and the Port Authority of New York and New Jersey has been circulating in real estate and political circles this week, although the Spitzer administration had sworn many people to secrecy.


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The governor is scheduled to make the announcement today at his offices on Third Avenue, with executives from Chase and the Port Authority as well as state and city officials on hand.

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The governor’s office, the Port Authority and Chase declined to comment.

The agreement provides Chase with a lucrative incentive deal. Plans for the bank’s tower are almost sure to ignite a controversy with the local community board. Because the site is relatively small, the bank tower will have to jut out about 100 feet over a planned park and church on Liberty Street, as well as over Cedar Street, to accommodate trading floors for the investment bank. The tower will therefore cast a permanent shadow over the one-acre park.

The building’s design will require public hearings and a change in the master plan for rebuilding Lower Manhattan.

Photo Gov. Eliot Spitzer is scheduled to announce the agreement today at his Manhattan offices. Credit Robert Caplin/Bloomberg News

Chase had actually come to a tentative agreement in April with the Port Authority to pay $300 million for the development rights on the parcel at Cedar and Greenwich Streets, after a series of meetings in December and January between James Dimon, Chase’s chairman, and Anthony R. Coscia, the Port Authority chairman.

It was a remarkable turnaround for Chase, which appeared to be pulling out of downtown only six years ago. It sold its tower at 60 Wall Street and leased space at 1 Chase Manhattan Plaza to other companies.

But after state and city officials refused to provide Chase with what they considered an excessive subsidy package, the bank threatened to move thousands of employees to Stamford, Conn., instead.

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Chase had sought a batch of subsidies akin to what Goldman Sachs received from the Pataki and Bloomberg administrations in 2005 to build a headquarters in Battery Park City. Critics of the Goldman deal, who put the value of the incentives at more than $650 million, described the arrangement as the most egregious example of corporate welfare in city history.

Many officials regarded Chase’s threat as part of the usual bluster employed by companies seeking subsidies. Indeed, Dannel Malloy, the mayor of Stamford, said yesterday that the bank had never even contacted him.

Officials in both the Spitzer and Bloomberg administrations have privately renounced the Goldman deal, blaming former Gov. George E. Pataki. They wanted to avoid similar recriminations in coming to an agreement with Chase.


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One official familiar with the Chase deal said that the city and the state ultimately agreed to provide the bank with tax breaks, discounted electric power and rent subsidies worth about $100 million, most of which are available to tenants moving to the trade center site.

But it depends on how the dollars are counted. For example, Chase will get a rent subsidy worth about $50 million a year for about 15 years, or $5 a square foot for 750,000 square feet. Tenants at the developer Larry Silverstein’s recently rebuilt 7 World Trade Center got the same deal.

One executive who had been briefed on the deal by Chase said that it would not have been closed unless it was fairly comparable with Goldman’s. “It was a very competitive deal from an overall cost perspective,” the executive said.

A version of this article appears in print on , on Page B1 of the New York edition with the headline: Chase Bank Set To Build Tower By Ground Zero. Order Reprints| Today's Paper|Subscribe

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