US bank looking for tax breaks to move to Ground Zero

One of the United States’ largest banks has threatened to leave New York City if it does not receive bigger tax breaks to develop an office tower at Ground Zero, government officials said.

JPMorgan Chase has been negotiating for weeks to build and lease the last skyscraper planned to replace the office space destroyed in the September 11, 2001, attack on the World Trade Centre.

The bank has offered the Port Authority of New York and New Jersey, which owns the trade centre site, $300m (€219.7m) for rights to develop the 50-storey skyscraper on land now occupied by a vacant skyscraper heavily damaged in the 9/11 attacks, one official said.

If the deal goes through, JPMorgan would build the tower and move thousands of employees from several midtown Manhattan locations to the site, just south of the original twin towers.

However, the bank has sought more lucrative tax incentives from the city and state to move downtown, and is looking at locations in Connecticut and New Jersey if a deal cannot be reached, officials said.

Officials have said they will not offer any other company a deal like the one handed to Goldman Sachs two years ago, when businesses were more wary about moving downtown. Since then, office vacancy rates in the neighbourhood have dropped to pre-September 11 levels.

“They’ve been clear in not wanting to replicate the Goldman deal,” said Anthony Shorris, executive director of the Port Authority.

Goldman Sachs began building its corporate headquarters just north of ground zero in late 2005, after receiving $1.6bn (€1.2m) in tax-exempt bonds and more than $100m (€73.2m) in tax incentives to build a $2bn (€1.46bn) dollar building.

Officials familiar with the JPMorgan talks said the incentives being sought are nowhere near that large.

Shorris said that JPMorgan and the government have been involved “pretty intensely” in talks over the planned skyscraper and that the Port Authority wanted to get a “decent financial value” for the building.

New York Mayor Michael Bloomberg said that “the city’s always willing to negotiate.” But he said that funding clean streets, public safety, culture and education is a better way “to spend the city’s dollars rather than giving companies tax breaks.”

JPMorgan spokesman Joseph Evangelisti declined to comment yesterday.

JPMorgan Chase is the US’s third-largest bank by assets, behind Citigroup, which is based in New York, and the Bank of America, which is headquartered in Charlotte, North Carolina.