BANK OF AMERICA

In February, the New York City Industrial Development Agency awarded $650 million in Liberty Bonds and $42 million in tax breaks to Bank of America to build a 51-story office tower on Bryant Park in Manhattan. To secure the benefits, the bank pledged to keep 3,000 jobs in the city and add 2,800 more.

But now waves of layoffs are anticipated in the wake of yesterday's completion of Bank of America's $47-billion acquisition of FleetBoston Financial Corp., leaving elected officials and community group leaders wondering whether Bank of America will keep up its end of the bargain.

"I don't think this type of corporate retention financing has proved to be an effective model," said Sen. Liz Krueger (D-Manhattan), who represents the midtown area where the new Bank of America building is slated to open in 2008. "It's an incredibly advantageous package for Bank of America."

When they announced their merger on Oct. 27, 2003, both companies said there would be layoffs. But they did not say how many jobs would be eliminated. Fleet has 3,500 employees in New York City and Long Island while Bank of America has 3,000 employees scattered throughout the area.

But some analysts have predicted that the combined company - Bank of America - will have to cut as many as 13,000 of its 180,000 total jobs. Bank of America officials did not return calls for comment yesterday.

The 2.1-million-square-foot office building on West 42nd Street and Sixth Avenue will become headquarters to the bank's investment banking, trading and asset management divisions.

But city planners say that adding to the payroll by acquiring Fleet employees through the merger won't count toward the job-creation goals.

The bank must "create new jobs that didn't exist here," said Michael Sherman, spokesman for the city's industrial development unit. "You can't add jobs through acquisitions to get [tax] benefits."

Sherman stressed that several of the tax reductions won't be given until the jobs actually come to the city. In addition, the city has worked out a plan where the tax benefits won't be awarded unless Bank of America meets a strict schedule of job-creation from 2008 to 2028, he said.

Moreover, according to the terms of the deal, Bank of America must maintain at least 95 percent of its current employment base of 3,000 or its tax benefits will be reduced. The bank could lose its benefits if employment falls more than 70 percent below the 3,000 mark.

But Sherman said Bank of America would preserve its benefits if it relocated jobs from Boston, North Carolina, New Jersey, or Long Island.

Bettina Damiani, project director for Good Jobs New York, a community group, said Bank of America had another tax-incentive deal terminated due to layoffs. And a recent report by her group highlighted more than a dozen other tax-incentive deals that didn't provide the jobs promised. "Every year, we're losing tax dollars on this," Damiani said.