Grabbing Goldman
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
City leaders are trumpeting the real estate deal that will keep Goldman Sachs in Lower Manhattan. Under the scheme, reported yesterday by the New York Times, Goldman Sachs will receive an additional $600 million in tax-exempt Liberty Bonds on top of the $1 billion bond package the company had already been promised to help finance construction on the 40-story office tower that will house at least 9,000 employees. There are city and state tax credits worth between $150 million and $200 million. The city has also agreed to revise plans for sidewalks and streets near the site.
The deal almost slipped away four months ago, when Goldman threatened to pull the plug on its headquarters plan. Since then, Mayor Bloomberg, Governor Pataki, and the assembly speaker, Sheldon Silver, put on a full court press to bring the securities firm back to the table, including weekly phone calls to Henry Paulson, the chief executive at Goldman, from the mayor. To the extent that the deal was in jeopardy in the first place, it was the fault of the politicians themselves. Goldman’s frustration last spring stemmed from the company’s belief that it was being ignored by leaders preoccupied with the West Side stadium.
Goldman’s decision is good for the city, and we are as happy as anyone to see investment by businesses downtown rather than in Jersey City or Greenwich. Still, as Steven Malanga notes in his article “Zero at Ground Zero,” in the latest number of City Journal, Lower Manhattan’s last renaissance, in the mid-1990s, was accomplished with only modest tax incentives and minimal central planning. Mayor Giuliani focused on restraining taxes and improving infrastructure as the key to development.
Instead of giving special tax breaks to big companies that have the political might to negotiate for them, the city and state could try to lower taxes for everyone. That would make New York City the kind of place where a company that wants to build a new office building can do it without the city and state’s top politicians having to get involved to clear the way. It would be the kind of place where building such a headquarters would be a good business decision for a company even without special extra tax breaks.
