Company Chase Manhattan Bank (now J. P. Morgan Chase & Co.)
Date Announced 11/30/1988 (deal closed 11/1/1989)
Project Site 3 and 4 Metrotech Center, Brooklyn
Competing Sites Jersey City, N.J.
Maximum  City Subsidy $211.8 million

City Amount Tied to Job Retention

 $22,500,000 in sales tax retention credits

City Amount Tied to Job Growth

 ?
Type(s) of City benefits Sales tax breaks -- At least $51,800,000

Discounted energy (NYCPUS) -- $35 million

Property tax breaks -- $108 million

Relocation tax credits (REAP) -- $17 million

Benefits from New York  State ?
Total Benefits Allowed ?
Benefits Distributed to Date (according to LL69 Report FY 2002) $44,532,000
 
Promised Job Retention 5,000
Promised Job Creation 1,450
Total Promised Jobs 6,450
Jobs Reported in LL69 Report FY 2002 4,205
Layoffs Following Chase's acquisition of J.P. Morgan, J.P. Morgan Chase & Co. announced in early 2001 that  5,000 jobs would be eliminated, though some analysts think that the number of jobs lost could reach 10,000.

In the years following the deal, Chase announced a series of layoffs and relocations that have moved thousands of jobs out of New York City. Starting with 5,720 job cuts in 1995 when Chase merged with Chemical Bank, the company then slashed 2,200 jobs in 1998 as part of a massive restructuring effort and in October 1999 Chase announced 3,500 positions (10% of its workforce in the New York metropolitan area) would be relocated to other states, including many jobs that had been located at MetroTech Center. This announcement represents the largest job exodus in New York City's history.

In June 2000, 11 years after signing its 25-year, $212 million deal, which the city said would prevent the firm from moving jobs to Jersey City, Chase accepted an estimated $100 million in subsidies to move thousands of employees from lower Manhattan to a new complex -- in Jersey City.

Up to 10,000 additional layoffs are expected from JP Morgan Chase's January 2004 acquisition of Bank One, many of them in the New York area.
 
Length of Contract 25 years
 
Project Purpose Chase agreed to move 5,000 of its employees to MetroTech in 1988 at a cost to the government of $51,000 per job. Even though Chase later announced that many MetroTech jobs will be moved to Tampa, Dallas and Lowell, Mass., the banking giant apparently can retain its 1988 benefits by transferring some of its remaining employees to MetroTech from elsewhere in the city.
Clawbacks If employee levels at MetroTech fall below a certain level, recapture payments are supposed to kick in.
Background/Since then... This is the city's largest completed corporate retention deal to date. This deal is also notable for failing to prevent one of the largest series of layoffs in NYC history, by one of the world's largest and most powerful financial corporations. 
Corporate Notes

Chase Manhattan merged with the larger Chemical Bank in 1995 but kept the more prestigious Chase name.

In September 2000, Chase acquired J.P. Morgan, the investment and asset management firm.  The new company is called J.P. Morgan Chase and Company.

JP Morgan Chase collected several million dollars from New York City as part of the failure of the NYSE deal before re-taking control of its property at Broad and Wall Streets. The company also is a major underwriter of bonds for New York City itself and various NYC agencies.

In January, 2004, JP Morgan Chase acquired Bank One to become the second largest bank (after Citigroup) in the nation.

Comments "The government only has so much it can hand out. By putting scarce resources into bloated industries that have no chance to expand, new businesses come up short. For instance, the state has a supply of cheap electricity. In the 1988 deal, Chase was given 25% of all that lower-cost power, a $35 million savings for the bank. But the deal meant cheap electricity wouldn't be available to new, more nimble companies that might increase the number of jobs, rather than shrink them, as Chase has." Jim Dwyer, Daily News, 10/10/99.
A note on sources -- Information in this deal comes from GJNY's examination of project agreements obtained through Freedom of Information Law requests, as well as news reports, minutes and notes taken at board meetings, and communication with our allies. The entries are a work in progress. For more information about the documentation behind GJNY's database, or to let us know about any developments that are not yet reflected here, please contact us at gjny@ctj.org or (212) 414-9394.
Date last updated: 1/15/04