JPMorgan Chase (NYSE:JPM) to build headquarters in the lucrative New York City
JPMorgan Chase (NYSE:JPM) is negotiating with state officials to build headquarter costing 6.5 billion dollars in New York City. The campus will consist of two high-rise building towers at Hudson Yards for 16,000 workers. The negotiations with the officials could fell apart over JPMorgan Chase (NYSE:JPM)’s emphasis on certain incentives. However, the talks have been going on and word on the street is that the deal will be successful.
It’s being reported that the buildings would cover the space equivalent to two state empire buildings. The negotiations were heated up because JPMorgan Chase (NYSE:JPM) sought for over 1 billion dollars concession from the state. The area is dominated by warehouses, factories and tenements and the bank’s move to Hudson Yards would make the area quite commercial.
Governor of the state has already been scrutinized by the critics and media, accusing him of being quite eager to give away corporate subsidies so that he could get financial support for his re-election. The Mayor of the state, who in the past has stood against corporate subsidies, is in a tricky position. On one hand he has to make sure that his fellow party members aren’t irked, on the other hand he has to make sure to stand by his words.
JPMorgan Chase (NYSE:JPM) emphasized on the fact that the benefits of this project would exceed any concessions or subsidies that are provided. JPMorgan Chase (NYSE:JPM) reminded the state officials that the state will gain significantly from this project. JPMorgan (NYSE:JPM) will be buying developmental rights anyway, and make yearly payments. Plus there will be a surge in the employment rate which doesn’t sound like a bad deal for NYC.
JPMorgan (NYSE:JPM) had some sort of a ‘wish list’ that was unacceptable to the city officials. The most prominent was a demand of a subsidy worth 1 million dollars. The state officials stated that they wouldn’t grant that to JPMorgan (NYSE:JPM) in any case. Related Companies, city’s most seasoned developers, owns the space where JPMorgan (NYSE:JPM) intends to build the headquarters hence JPMorgan (NYSE:JPM) will also have to lure related companies with a certain deal.
The deal hasn’t been finalized yet and there are some undisclosed matters which are yet to be solved. State officials are showing skepticism when the deal was first pitched forward in June when JPMorgan (NYSE:JPM) offered to build on the west side property.
JPMorgans (NYSE:JPM) list of ‘wishes’ included reduction in mortgage tax, transfer tax and sales tax on construction materials. It also wanted low cost power grants, job training grants, underground passageway for the building that require alteration to the newly built No. 7 subway station and financial help with reinforcing the foundation.
The neighborhood, formerly known as Hell’s kitchen was rezoned, getting tax breaks and other incentives intended to encourage new construction. JPMorgan Chase (NYSE:JPM) is aiming to reduce its cost in NYC and move its technical operations to Jersey City, which will become its technological and operational hub if this deal doesn’t go through.