Merrill Lynch has been housed in Lower Manhattan since 1914. The company currently leases about three million sf at the World Financial Center, occupying all of Tower 4 and part of Tower 2.
Jones Lang LaSalle, which was hired to oversee the transaction, is currently looking at a variety of options for the company. President of the New York area Peter Riguardi says JLL has "put a pretty wide net out to look for alternatives," and is now narrowing down the field. He says the final choice could be a ground-up development or an existing facility, adding that it would be difficult to find the amount of space the company is seeking in an already standing building.
Riguardi says it is too early in the process to say if Merrill Lynch will move out of all three million sf. "It could be all, it could be split. It's too early to tell." Merrill Lynch's current lease ends in 2013. Riguardi says a move will likely occur before that time to allow the company the ability to transfer employees and operations without much disruption. When a decision will be made or the move will occur, he says, is hard to comment on now.
Some industry insiders suspect Merrill Lynch is looking for an incentive to stay in Manhattan. Back in 1997 the city and state gave the company a 15-year tax incentive, offering Merrill Lynch about $28 million if the company would remain in Manhattan and hire 2,000 employees. While the investment bank did not hire additional personnel the tax breaks were reduced by $500,000. The sweet-heart deal expires in 2012 and Mayor Michael Bloomberg said he isn't keen on offering subsidies to keep the company city bound. At a philanthropy conference covered by the New York Post yesterday, Bloomberg said, "I would not expect Merrill Lynch to ask for any subsidy, nor would I expect the city to give them one."
Options in the city are limited, Riguardi says, as there are not many buildings, if any, that could accommodate Merrill Lynch's large space needs. But that does not rule Manhattan out of the running either.
Merrill Lynch would not be the only company to look for an incentive to stay in the city. As reported by GlobeSt.com, Goldman Sachs Group Inc. received $1.65 billion in Liberty Bonds to fund the construction of its $2-billion headquarters in Battery Park City.Goldman Sachs was also eligible for up to $25 million in Job Creation and Retention Program funds. The total discretionary incentive package provided to Goldman Sachs is worth $115 million, independent of Pilot Payments, in state and city funds over the same period.
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