Monday, June 23, 2014

A Tug-of-War of Tax Breaks Tightens Across the Hudson

Late last fall, bankers from BNY Mellon went to state officials in New York and New Jersey with a proposition: The bank was planning to sell its headquarters on Wall Street and was looking for office space on either side of the Hudson River for more than 1,100 employees.

The bankers wanted to know who would cut the best deal.

In New Jersey, Gov. Chris Christie’s administration responded quickly with a hefty offer — nearly $100 million worth of tax credits — if the bank would move one mile west to Jersey City.

New York countered with its own incentive package that real estate executives say is worth millions of dollars if the bank remains in Lower Manhattan.

The bank is leaning toward New York, real estate executives say, but no victor has been announced and officials on both sides of the Hudson refused to discuss the high-stakes negotiations.

The tug-of-war is the latest skirmish in what is becoming a fierce competition between New York and New Jersey to heap subsidies on some of the country’s wealthiest corporations as enticements. With a struggling labor market, jobs are precious to both states, but in New Jersey there is also a political factor: Mr. Christie is widely presumed to be a contender for the Republican presidential nomination and has promoted himself nationally as a prudent financial steward. More here.

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