Chase Needs More Cash

20070425chase.jpg

Photo: Getty Images


Last we checked with JPMorgan Chase, the megabank wanted to join the ground-zero scrum by building a 50-story skyscraper on the site of the contaminated Deutsche Bank building. There wasn't much opposition; in fact, city officials were ecstatic about this major score for the financial district. But there was one catch, as it turns out: It would need to be an even bigger score for Chase. As today's Times reports, the bank wants the kind of lavish incentive package Goldman Sachs got to build a tower in Battery Park City: $650 million worth of cash grants, tax-free bonds, and a whole buffet of tax breaks. Which left the government in the slightly ridiculous position of explaining how that was then and this is now; Spitzer is not Pataki; and downtown, while it could use a boost, is not exactly a wasteland anymore, either.

In response, Chase is playing an equally juvenile-sounding version of hardball: It is threatening to move its base of operations to Connecticut instead. The bank's reps have already met with property owners in downtown Stamford. Bloomberg's reaction makes it clear that the city's not going to meet Chase's demands even halfway — $100 million in subsidies is the current and final-sounding offer. After all, Lehman Brothers and Merrill Lynch also sought the Goldman Sachs downtown deal; both were thwarted, and both survived. One imagines that once Chase and the city finish playing hard to get, a similar deal will eventually be struck.

Chase Says It Will Move if City Balks [NYT]