Bernadette O'Leary (212) 312-3523(EDC)
MAYOR ANNOUNCES LANDMARK AGREEMENT WITH BEAR STEARNS
5,700 Jobs To Remain In Manhattan -- New Midtown Office Tower To Be Built
Mayor Rudolph W. Giuliani announced today an agreement has been reached with Bear Stearns, a leading worldwide investment banking firm, to build a new global headquarters in midtown Manhattan. The agreement will keep 5,700 current Bear Stearns employees in New York City for the next 50 years and will create at least 13,300 new jobs during this period. The new office tower will consist of a minimum of 850,000 square-feet and will be built at 383 Madison Avenue between 46th and 47th Streets.
The Mayor was joined by Bear Stearns President and Chief Executive Officer James E. Cayne, Deputy Mayor Randy Levine and Economic Development Corporation (EDC) President Charles Millard.
"Bear Stearns is very important to New York City's financial community," said Mayor Giuliani. "This agreement succeeds in ensuring that the company's world headquarters and its 5,700 employees will be here for the next 50 years. In addition, the agreement ensures that a site that has been vacant for years will soon be home to an impressive new building in the heart of Manhattan. Commitments like this one continue to reinforce the City's already formidable financial community and New York City's position as the Business Capital of the World."
The 50-year agreement is the City's longest to date and reflects the company's long-term confidence in the future of New York City. The average length of retention agreements completed during the Giuliani Administration is approximately 17 years.
Over the term of the agreement, negotiated through EDC, Bear Stearns will receive a maximum of approximately $45 million in sales tax exemptions if it maintains its current 5,700 jobs in New York City. The City is also offering a maximum of $30 million in additional sales tax exemptions if Bear Stearns is able to create the 13,300 projected new jobs. The City's portion of these total benefits is $36 million. Of the City's total contribution to Bear Stearns' benefits package, 40 percent is contingent upon growth by the company.
"Mayor Giuliani's commitment to business, as well as his Administration's dedication to the revitalization of the City's economy, encouraged us not only to remain in New York City, but also to expand our operations for the future," said James E. Cayne, President and Chief Executive Officer of Bear Stearns. "We are very excited about our new location and look forward to continued growth in New York City."
Bear Stearns will consolidate employees from 245 Park Avenue and 575 Lexington Avenue into the new building. Its clearing operations will remain at the Metrotech complex in Brooklyn. Bear Stearns currently has domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, San Francisco and Whippany, New Jersey.
"This deal demonstrates Mayor Giuliani's commitment to business in New York City," said Deputy Mayor Randy Levine. "It helps to solidify our position as the Business Capital of the World. This deal will not only retain jobs for the City, but also shows that we are serious about keeping businesses in the City."
Including this agreement, the Giuliani Administration has now retained 33 major companies, representing 77,880 jobs retained and a projected growth and recruitment of 39,939 new jobs over the next 10 to 50 years through its corporate retention program. The total tax revenue generated by these companies to the City is approximately $1.35 billion a year for the next 10 to 50 years.
"With today's announcement, we not only succeed in keeping over 5,000 jobs in New York City, we also help transform a vacant midtown site into a thriving business center," said EDC President Charles Millard. "We are excited at the prospect of Bear Stearns continuing to grow in New York City, and we look forward to a long and prosperous future for this very important financial institution."
In the event the company does not maintain the specified job level, the agreement calls for the repayment of some or all of the benefits taken, as well as penalties, and/or a reduction or elimination of any unused benefits. In addition, the company cannot take advantage of any benefits tied to job growth until it certifies that it has created the specified number of additional jobs above and beyond those it has agreed to retain.
The company, its employees and suppliers generate economic activity, which results in more than $186 million annually in total City tax revenues. As a result, the payback period to the City is about 2.3 months.
EDC is the City's primary vehicle for economic development services. Using its real estate and financial resources, EDC helps develop businesses and create jobs throughout the five boroughs.
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