As the city negotiates last-minute details on a financing plan for Bank of America’s new midtown headquarters, 9/11 reconstruction watchdogs have a message for development czars at the bargaining table: Stop the giveaways!
It was generous enough, they say, for the Industrial Development Agency (IDA), a subsidiary of the city’s Economic Development Corporation (EDC), to offer the bank and its partner, green-friendly developer Douglas Durst, preliminary approval on an estimated $650 million in federally issued Liberty Bonds, money intended to revitalize downtown. Now the city is considering plans to sweeten the deal by giving Bank of America tax breaks to renovate its existing midtown offices as well, City Limits has learned.
Critics say this is exactly the kind of corporate welfare Mayor Bloomberg promised to eradicate. “It’s egregious,” said Bettina Damiani, director of Good Jobs New York, a spur of the non-profit Fiscal Policy Institute. “If these subsidies come to the table, [the IDA] certainly needs to be more transparent.”
Under the proposal, Bank of America, which employs an army of 130,000 workers and netted a profit of $9.2 billion last year, would receive tax breaks from the city to buy new office furniture, fixtures and machines needed to modernize an estimated 386,000 square feet of its office space at two midtown locations: The Manhattan Mall at Herald Square; and a 29-story Bank of America tower near Grand Central Station, which was already renovated a year ago.
“Our negotiations for a financial incentive package with the city are in progress,” bank spokesperson Tara Burke said. “We expect the project to move forward as planned.”
EDC spokesperson Janel Patterson said a total on the tax breaks is not yet available, and a public hearing is expected in the coming months. “It’s not unusual,” she added, for a company to ask for tax abatements for additional locations.
Alex Dudley, spokesperson for the Empire State Development Corporation, said that without competing perks, a company like Bank of America would simply move new jobs somewhere else — say, New Jersey. The new headquarters, he added, will bring long-term job benefits for the city. Bank of America has promised between 500 and 1,000 new jobs over the next few years. “We plan to grow in New York,” said Burke.
Job growth projections can fall short, however, especially when Bank of America calculates them, Damiani said. After the first terrorist attack on the World Trade Center in 1993, the bank threatened to leave offices there for more tranquil stomping grounds. In exchange for an estimated $18 million in tax subsidies, bank officials promised to keep 1,700 employees in Tower One. Four years later, the bank changed its mind, laying off half the office workforce, approximately 800 employees. The subsidies were later scrapped.
“If they couldn’t keep jobs after the first attack, why should we bend over backward after the second?” Damiani asked. “Any new deal needs to be iron clad. The last one was inked on swiss cheese.”
