| Company | Merrill Lynch |
| Date Announced | 6/6/1997 (deal closed 11/17/1997) |
| Project Site | 222 Broadway, Manhattan; WFC South, WFC North, 250 Vesey St |
| Competing Sites | Jersey City, NJ and Connecticut |
| Maximum City Subsidy | $27,642,000 |
|
$17,000,000 in sales tax retention benefits |
|
$10.64 million in sales tax growth credits ($2,000/employee per year up to $2,640,000 and then $1,500/employee per year to a cap of $10,640,000) |
| Type(s) of City benefits |
Sales Tax Exemptions -- Up to $27,642,000 Industrial Development Bonds -- $650,000,000 |
| Benefits from New York State | Cash grant from the Empire State Development Corporation's Jobs Now fund -- $1 million (This amount represents 1/20th of the total fund.) |
| Total Benefits Allowed | $28,642,000 |
| Benefits Distributed to Date (according to LL69 Report FY 2002) | $14,919,000 |
| Promised Job Retention | 9,000 |
| Job recruitment | |
| Projected job growth | 2,000 |
| Total Promised Jobs | 11,000 |
| Jobs Reported in LL69 Report FY 2002 | 7,867 |
| Layoffs | In April 2001 Merrill Lynch announced the layoffs of 1,000 of its employees in its brokerage division, research department and institutional securities group. Following 1,800 layoffs in its brokerage division in the summer of 2000, the current round of layoffs amounts to a reduction of 7.5% of Merrill Lynch's brokerage-division staff in less than a year. |
| Length of Contract | 15 years |
| Project Purpose | This deal was to entice Merrill Lynch to expand into the former offices of the Swiss Bank Corporation, which had been lured to Connecticut in 1994. Merrill Lynch had never considered moving jobs out of the city or state. The issue was whether they would expand here or in Connecticut or New Jersey. |
| Clawbacks | Recapture penalties will kick in if the company moves a certain number of employees out of the City. |
| Background/Since then... |
Merrill Lynch bought 222 Broadway for $73
million, less than half the $150 million that Swiss Bank paid for it nine
years earlier.
Three Merrill Lynch employees were killed in the attacks of September 11th. The remainder of the employees at the WTC were relocated to pre-existing Merrill space in NYC and NJ. In 2002, Merrill Lynch agreed to a $100 million settlement with the New York Start Attorney General over conflicts of interest by its research managers with its investing arm. The controversy sparked a historic investigation into a number of name-brand Wall Street firms. |
| Corporate Notes | Merrill Lynch, founded in 1915, is currently one of the world's biggest financial management and advisory companies, with assets of approximately $1.1 trillion and offices in 36 countries. In 1995, ML acquired Smith New Court and became the largest equity organization in the world. In April, 2003, following the conflict of interest scandal between its research and the investing arms, Merrill Lynch appointed E. Stanley O'Neal as new CEO. |
| Comments | Myron Magnet, editor of City Journal, an urban affairs quarterly published by the conservative Manhattan Institute, says "The trouble with giving these tax breaks is that they increase the tax burden on other businesses not powerful enough to wring them out of the city government. Precisely those small, job-creating businesses that the city should be fostering find themselves depressed by this policy" (Financial Times, 6/11/97). |
| 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: 08/5/03 | |