Volume 20, Number 45 | THE NEWSPAPER OF LOWER MANHATTAN | MARCH 21 - 27, 2008

Wrestling with the Bear, JPMorgan halts W.T.C. project

Downtown Express photo by Elisabeth Robert

JPMorgan Chase’s Frank Bisignano and David Rockefeller.

By Josh Rogers

JPMorgan Chase, consumed with finalizing its takeover of Bear Stearns, has scrapped its plans to build a large trading floor building at the World Trade Center.

Even if JPMorgan is not able to complete the sale, it reportedly retains an option to buy Bear’s trading floors and office headquarters in Midtown.

“Before you close a deal to get trading floors, you don’t look to build a building down here with new trading floors,” Frank Bisignano, chief adminisitrative officer of JPMorgan Chase, told Downtown Express Tuesday night. “You don’t have to pass an I.Q. test to figure that out.”

Bisignano added JPMorgan is a big company and had not ruled out building Downtown, but he made it clear the Bear Stearns agreement was the focus, and that the firm would not take a closer look at pursuing Lower Manhattan until the deal is settled.

In round-the-clock negotiations over the weekend, JPMorgan agreed to acquire the struggling Bear and assume some of its obligations at a bargain basement price of $2 a share — a deal sweetened considerably more by a $30 billion credit line from the Federal Reserve.

Ironically, Bisignano spoke of halting W.T.C. plans a few minutes after paying tribute to David Rockefeller, the driving force behind the construction of the Twin Towers and the Chase Plaza office buildings — two projects intended to retain Lower Manhattan’s position as the financial capital of the world. Bisignano unveiled a plaque renaming the plaza after Rockefeller, whose family founded Chase.

Downtown leaders downplayed the reports of JPMorgan’s hesitancy and insisted they were still in the hunt for Chase.

Assembly Speaker Sheldon Silver, who spoke with Bisignano, said in a telephone interview that he got a different message from JPMorgan.

“I was assured that they still intend to develop the Deutsche Bank building [at the W.T.C.],” Silver said. “They may ultimately change the way it’s configured, but it is their intention to move forward…. They may no longer need the expanded trading floor.”

Anthony Shorris, executive director of the Port Authority, which made the original deal with JPMorgan, said he too was optimistic and had “reason to believe we’re going to go ahead with the deal.”

Last year’s 92-year lease between the Port and Chase was announced two months before the Aug. 18 fatal fire at the former Deutsche Bank building. The delayed cleanup of the damaged building has now resumed, but demolition work will not be restarted until the fall at the earliest. The Port had hoped to get control of the Tower 5 site area by this September, at which time they would have turned it over to JPMorgan and begun constructing its adjacent vehicle security center.

Shorris said the Port plans to offer the investment bank adjustments to the deal to offset the change in the timeline. JPMorgan is free to back out of the agreement.

The Port would consider a mixed use tower on the site if JPMorgan does not move forward, according to one official. Prior to the Tower 5 deal, the city had suggested a hotel or residential building for the parcel.

If JPMorgan does end up building offices and no trading floors at the W.T.C., that is likely to be seen as welcome news from community leaders who raised concerns over the bank’s plan to add shadows with cantilevered trading floors hovering over the site.

The Tower 2 and 3 sites are large enough for trading floors, but JPMorgan did not appear to consider either spot seriously. Two theories emerged to explain that decision. Either the firm wanted more control over the building or it preferred to have the Port as a landlord rather than developer Larry Silverstein.

At last June’s announcement, JPMorgan’s C.E.O., Jamie Dimon, who led the Bear Stearns negotiations, pointed out that both J.P. Morgan and Chase bank were founded near Wall St. “We’re proud, we’re going back home,” he said then. “We feel great about it.”

Then-Gov. Eliot Spitzer added, “We have proven once again that Downtown Manhattan is the epicenter of global capital.”

With reporting by Julie Shapiro





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