ear, Stearns & Company announced yesterday that it had agreed to renew its lease at MetroTech Center in Brooklyn instead of moving 1,500 jobs to Manhattan or New Jersey. The announcement came after the city agreed last week to restructure $4.8 million in tax exemptions from an earlier subsidy deal.

The investment bank's chairman, James E. Cayne, said Bear, Stearns had agreed to sign a 20-year lease with its landlord at MetroTech, Forest City Ratner.

"We're thrilled it worked out the way it has," Deputy Mayor Daniel L. Doctoroff said. "It's the right result for everybody."

But the bank's decision did not come without some drama, which began last summer after Bear, Stearns threatened to move its 1,500 Brooklyn employees to less expensive space in New Jersey unless the city provided an incentive package to move them to Lower Manhattan.

City officials had balked at providing Bear, Stearns with any subsidies beyond what the bank received in a $75 million deal struck in 1997. The Bloomberg administration did not want to set a precedent by providing incentives for a company to move out of Downtown Brooklyn, even to beleaguered Lower Manhattan.

Critics of corporate incentives called the investment bank greedy. In 1991, after threatening to move to New Jersey, the bank received a $36 million incentive package to move employees to MetroTech.

Six years later, Mayor Rudolph W. Giuliani expanded the deal to a $75 million package when the bank decided to build its current headquarters, on Madison Avenue between 46th and 47th Streets.

Then last year, Bear, Stearns, which had a property tax exemption for the Brooklyn offices, complained that it was facing a sharp increase in costs in 2004 when the tax exemption and the lease were set to expire.

The bank ultimately struck a bargain with its landlord. And in an unusual arrangement reached last week with the city, Bear, Stearns was allowed to convert $4.8 million worth of unused sales tax benefits from its 1997 deal into $4.8 million worth of property tax exemptions, according to a city official.

The arrangement allows the bank to obtain the subsidies more quickly, at what Mr. Doctoroff said was "some small cost to the city." "By and large, it's a win-win," he said. "We said all along that the era of corporate handouts to get people to stay in New York is nearing its end."

Jonathan Bowles, research director of the Center for an Urban Future, said he was happy to hear that the investment bank would remain in Downtown Brooklyn. Still, he had some misgivings.

"Given the city's severe fiscal problems, everybody has to pitch in" by paying higher property taxes, he said. "But it appears that Bear, Stearns has found a way out of that."