In a rushed board meeting of the Liberty Development Corporation (LDC) on August 15, 2005 (the entity created to allocate the state's portion of 9/11 Liberty Bonds), members approved a resolution to allocate $1.65 billion in bonds for Goldman Sachs’ new headquarters across the street from the World Trade Center site. This is an increase of $650 million from the original $1 billion proposed the year prior for the firm. Although it claimed to have given "final" approval for the project, the LDC is required to hold a public hearing, which was eventually scheduled for Wednesday, September 7, 2005.
In its board meeting on Monday, September 26, 2005 the LDC unanimously approved the allocation of $1.65 billion in Liberty Bonds for Goldman Sachs. It was announced that the city and state would each contribute half of this amount, which represents the largest allocation of 9/11 resources to a single firm. The subsidy package also includes hundreds of millions of dollars in tax breaks and a special lease agreement with the Battery Park City Authority. Another state entity, the Lower Manhattan Development Corporation provided a $25 million cash grant. To date, Goldman has used $22.9 million of the $25 million grant.
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September 7, 2005 - Good Jobs New York testifies at a Liberty Development Corporation public hearing
Read GJNY's testimony presented at the 2004 hearing regarding Goldman Sachs' original application for $1 billion in Liberty Bonds
View project materials released by the Liberty Development Corporation several days before the hearing.
Read a brief introduction of Goldman Sachs--a leading global investment banking, securities and investment management firm operating offices in over 20 countries.
In August, 2005, in a series of quick-turn board meetings by the Battery Park City Authority and the LMDC, a sweet-heart lease agreement was approved for Goldman Sachs' proposed headquarters, to be located on Site 26 of Battery Park City. The 65-year lease agreement does not require Goldman's annual payments in lieu of property taxes to be based upon the assessed value of the building and the applicable property tax rate. Instead, the ceiling was set at just $10.71 a square foot, or $21.4 million, a comparative savings of nearly $9 million a year. Goldman will also pay a one time lease payment of $161 million, $3.5 million for a new library, $1 million for a community center, and $900,000 a year to support Battery Park open spaces.
In September, 2005, after a scant public hearing process, The Liberty Development Corporation approved $1.65 billion in Liberty Bond financing for Goldman Sachs' new headquarters and a $25 million grant (Goldman has used $22.9 million of the grant) under the federally-funded World Trade Center Job Creation and Retention Program.
Good Jobs New York obtained project agreements, lease agreements, and tax term sheets through Freedom of Information Law (FOIL) requests. The following information was pulled from our reading of those documents and referenced in various press releases and news accounts.
$1.65 billion in low-interest, triple-tax-exempt Liberty Bonds, enabling the firm to save as much as $9 million a year in financing costs. This amounts to about $250 million over the life of the bonds.
$25 million in Federal World Trade Center Job Creation and Retention Program cash grants. Goldman has used $22.9 million of the JCRP grant.
$115 million in sales and utility tax breaks, in return for its commitment to maintain its headquarters in Lower Manhattan and more than 9,000 jobs now in New York through 2028. The value of the tax breaks could rise to $150 million if Goldman adds 4,000 new jobs by 2019. Earlier this year these tax breaks were slated to be only $30-55 million. These tax breaks presumably cover energy costs and a sales tax exemption on construction costs and equipment purchases.
Discounted Payments in Lieu of Taxes (or PILOTs, a property tax discount) to the Battery Park City Authority. The 65-year lease agreement does not require the PILOT amount to be based on the assessed value of the building and the applicable property tax rate. Furthermore, officials had originally indicated that over time the yearly payments would never exceed $15.11 per square foot, or $30.2 million. Under the new arrangement, the ceiling was set at $10.71 a square foot, or $21.4 million—a comparative savings of nearly $9 million a year.
Goldman will also pay:
- a one-time lease payment of $161 million to the BPCA in February.
- $900,000 a year to support and maintain Battery Park open spaces.
- $3.5 million to the NY Public Library branch planned for a site at Murray Street and North End Avenue.
- $1 million for a community center in a new residential development in BPC, and an undetermined amount will go toward an atrium walkway to connect the building, a nearby movie theater, and the hotel.
 Elizabeth O’Brien, “Liberty Board OKs $1.65B for Goldman” The Bond Buyer, August 15, 2005: p. 1
 New York Daily News, editorial, August 25, 2005: p. 40
 Charles V. Bagli, “Board Clears Way for Tower Downtown,” The New York Times, August 24, 2005: p. B1
 Bagli: p. B1
 GJNY notes from the Battery Park City Authority board meeting
 David Lombino, “Downtown Lease for Goldman Sachs Set To Be Approved by Authority” The New York Sun, August 23, 2005: p. 7
 Press Release issued by Governor Pataki, August 23, 2005
Goldman Sachs, which has been headquartered in Manhattan for 136 years, is the third largest investment bank in the United States and its profits have risen as its tax bills have fallen.
By its own account, 2004 was “the strongest performance in the firm’s history,” with total net revenues of $20.55 billion (up 28% from 2003) and total net earnings of $4.55 billion. Earnings per share in 2004 (diluted) were $8.92 , the highest in Goldman’s history.
Already this year, Goldman Sachs has reported profits of $1.51 billion in the first quarter and $865 million for the second quarter. Its long-term debt is rated by Fitch at AA-, by Moody’s Investors Service at Aa3, and by Standard & Poors at A+.
Goldman’s overall income tax rate for 2004 was 31.8%, down from 32.4% for 2003 and 35% in 2002. Goldman Sachs attributes this decline “to an increase in tax credits and a decrease in state and local taxes.” Federal tax credits in 2003 and 2002 were $138 million and $65 million. Reported total federal and state tax benefits in 2003, 2002 and 2001 were $103 million, $119 million and $123 million.
 Goldman Sachs 2004 Annual Report: 3
 Net Revenue is gross revenue less net of interest expense and cost of power generation.
 Net income is the difference between total revenue and total expenses.
 EPS is calculated by dividing net earnings by the weighted average number of common shares outstanding. Diluted EPS reflects the dilutive effect of the common stock deliverable pursuant to stock options and restricted stock units for which future service is required as a condition to the delivery of the underlying common stock.
 Form 8-K for Goldman Sachs, March 17th, 2005
 Form 8-K for Goldman Sachs, June 16th, 2005
 Ibid: 44
 Robert S. McIntyre and TD Coo Nguyen, Corporate Income Taxes in the Bush Years, A Joint Project of Citizens for Tax Justice and the Institute on Taxation and Economic Policy. September 2004: 54
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