Securing New York's Position as Financial Capital Will Be a Costly Endeavor

NEW YORK CITY-The Nasdaq Stock Market is about to move its headquarters to Manhattan and the New York Stock Exchange agreed two years ago to a deal to stay on Wall Street for the next 50 years if the city and state build it a new home across the street. Now both deals will cost the city and state, and ultimately the taxpayers, a combined total of approximately $1.95 billion. The consensus among government officials and the business community seems to be that this is a necessary price to pay to officially crown New York the global financial capital.

The city and state have prepared a package of approximately $50 million worth of incentives to be distributed to Nasdaq over a period of about two decades. The stock exchange created by the National Association of Securities Dealers will itself pay Brookfield Properties Corp. $50 per sf in rent. Nasdaq will be paying for the top two floors of One Liberty Plaza where Long Term Credit Bank of Japan had recently been paying $40 per sf. With a total of 260,000 sf in space, Nasdaq will be paying $13 million per year.

At the same time, the city’s Economic Development Corp., the Empire State Development Corp., the city itself and the state are planning to join together to raise approximately $1.15 billion to build a new trading facility for the NYSE. Two years ago when Mayor Giuliani and Governor Pataki announced the plan, the estimated construction cost was $400 million. Now that figure has jumped to $540 million. Just to buy the property at the corner of Wall and Broad streets will cost $350 million, now including payments to J.P. Morgan and Rockrose Development Corp.