Pataki: Goldman Sachs Deal ‘Essential’

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The New York Sun

Governor Pataki defended yesterday the proposed deal by the state, the city, and Goldman Sachs that will bring the investment banking firm to a 40-story world headquarters near ground zero in exchange for incentives that include $1.6 billion in Liberty Bonds and at least $150 million in tax breaks.


The governor said having the global banking giant commit to locating its multinational headquarters in Battery Park City was “absolutely essential” to ensure Lower Manhattan remains the financial capital of the world.


He said it would be possible for the city and even America itself to lose the “financial capital” crown. But because Goldman Sachs will join Merrill Lynch and American Express nearby, Mr. Pataki said, “Lower Manhattan is and will remain the financial capital of the world for a long time to come.”


The comments were made at a question-and-answer session following a ribbon-cutting ceremony for Tribeca Green, a 24-story apartment building constructed under environmentally-conscious guidelines. Tribeca Green opened recently a few blocks from ground zero and the proposed Goldman site.


Mr. Pataki said that in the next six months, $9.9 billion in construction will be under way within three blocks of ground zero.


A spokeswoman for Goldman Sachs, Andrea Raphael, would not comment on whether the global bank considered other sites for its headquarters, outside New York or abroad.


On Monday, a state board approved $1.6 billion in Liberty Bonds and part of at least $150 million in tax incentives that Goldman will receive to build a $2 billion office tower that will house its consolidated headquarters. A public hearing for the issuance of the Liberty Bonds has been set for September 7.


The governor characterized the pending agreement among the city, the state, and Goldman Sachs as “virtually done,” with some “technical details” that still need to be resolved. Plans to complete the lease with the investment bank stalled on Tuesday when the Battery Park City Authority, the state agency that oversees the downtown site adjacent to ground zero, failed to conclude its deliberations over terms of the lease.


The chief operating officer of the authority, James Cavanaugh, said yesterday he would not discuss details of negotiations. No date has been set yet for a public meeting at which a completed lease could be evaluated. Some mayoral candidates and civic groups have criticized the proposed agreement as too generous to the investment bank and said the Pataki and Bloomberg administrations forfeited better terms by not concluding an earlier, less costly deal that slipped away in April.


A Democratic elected official, City Comptroller William Thompson Jr., weighed in on the Goldman Sachs deal yesterday. He endorsed the proposed transaction, but with a reservation. “While I have concerns regarding a provision granting Goldman Sachs an opportunity to obtain even better benefits down the road, I support the proposed agreement and Goldman Sachs’s commitment to retain 8,100 jobs in Lower Manhattan,” he said in a statement. The office of the comptroller would not say what provision Mr. Thompson was referring to.


The deputy director of the Fiscal Policy Institute, James Parrott, said the governor’s statements were probably an attempt to rebut criticism of failed leadership in the redevelopment of Lower Manhattan since the terrorist attacks of 2001. He said the abrupt redesign of the Freedom Tower, following security complaints by the New York Police Department, and a lingering state of uncertainty regarding future development led Goldman Sachs to consider other options.


“The governor and mayor are trying to make up for lost time in Lower Manhattan. They became desperate and Goldman Sachs took advantage of that,” Mr. Parrott said. “It’s been almost four years since 9/11. That’s a long time.”


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