Even as the city tries to lure businesses to Lower Manhattan, one major company may be taking 1,500 of its downtown employees to Jersey City.

Citigroup Incorporated is selling the 363,000-square-foot building it owns at 250 West St. and may be moving its Smith Barney investment banking division across the Hudson River, Crain’s New York Business is reporting in today’s edition. The company is negotiating to sublease 370,000 square feet from the Union Bank of Switzerland in a 32-story building at 480 Washington Blvd. in Jersey City, Crain’s reported.

Officials from Citigroup and UBS could not be reached for comment last night. Crain’s quoted a Citigroup spokeswoman as saying the company was “considering its options.”

Cushman & Wakefield is brokering the sale of Citigroup’s 11-story building at 250 West St., sources said. A spokesman for the real estate agency, Philip Russo, declined comment when reached by phone last night.

The move would be a blow to efforts to attract economic development to Lower Manhattan, which have recently been focused at ground zero. State and city officials last month struck a deal with the developer, Larry Silverstein, regarding constructions plans for the Freedom Tower and other buildings at the site; government agencies are expected to fill a large portion of the office space. The only tower near completion at the site, 7 World Trade Center, has slowly been enlisting private tenants.

The area’s biggest boost has come from Goldman Sachs, which broke ground last November on a $2.4 billion world headquarters next door to ground zero. The company has committed to keeping 9,000 jobs in the city and may expand the work force by as many as 4,000 additional employees.

With lower rents and more flexible office space, Jersey City – sometimes called New York City’s sixth borough – has long been enticing to major businesses. The attraction is likely to increase as the cost of prime office space in Manhattan rises. The average asking price for downtown is $35 a square foot, according to Cushman & Wakefield’s first-quarter market report. That represents a $4 a square foot increase – or a rise of nearly 13% – from the end of 2005. By comparison, the average asking rent in northern New Jersey is $26 a square foot.

Despite the potential loss of 1,500 employees to New Jersey, Citigroup’s possible move across the river is no cause for panic, a former head of the Regional Plan Association, Claude Shostal, said. “It’s not a symptom of distress. It’s a symptom of success,” Mr. Shostal said, adding that the high rents in Manhattan are an indicator of economic strength. Although elected officials focus on bringing jobs to their individual states and districts, economic factors are regional, Mr. Shostal said. “The pluses and minuses of New York versus New Jersey pale by comparison to whether the regional economy is thriving,” he said.

Still, a sale of 250 West St. could mean a direct hit to some TriBeCa restaurants that rely on Citigroup customers. At Dylan Prime, a steakhouse on nearby Laight Street, Citigroup workers make up a significant portion of the restaurant’s lunchtime and happy hour crowds, its manager, David Anastasio, said. “We would definitely feel the effects in the short-term,” Mr. Anastasio said. “Citigroup employees have been part of our loyal customer base, and it would be sad to see them go.”

The company often holds parties at Capsouto Freres, a French bistro on Washington Street, its owner, Samuel Capsouto, said. “If they move, we’re going to lose business, just like after the World Trade Center,” he said.

Mr. Capsouto said he was confident that the possible loss of Citigroup’s business would not force the 25-year-old restaurant to close. “We’ll deal with the situation as it comes,” he said.