Battle of the Holland Tunnel

jersey city skyline jan 2006 Battle of the Holland TunnelIt was Oct. 13, and inside the wood-paneled lobby of the Newport Office Center, which rises like a glass punctuation mark from the Jersey City shore of the Hudson River, Governor Jon Corzine was gleefully announcing a huge score in the Garden State’s long-simmering battle with Manhattan for office tenants.

The Depository Trust and Clearing Corporation had signed a long-term lease to relocate 1,600 of its employees from 55 Water Street in Lower Manhattan to the Jersey waterfront.

“Yes, New Jersey is open for business and will work with business, not in a give-away context, but in a context that will create economic opportunity for our citizens [and] revenues for our communities that then can be plowed back into all the other important things I think we all care about,” the governor said.

For his part, William Aimetti, the tall, pallid CEO of the Depository Trust, made no bones about the root of the corporation’s decision: money: “[W]e concluded that relocating to New Jersey would allow us to manage our cost structure more readily and position DTC for continued business expansion in the years ahead.”

With real estate prices dramatically lower across the Hudson, and companies looking to save where they can, the flight of Depository Trust raises the question: Will another cross-river war erupt between the Jersey waterfront and Manhattan, à la post-9/11, as landlords try to lure scarce tenants in a market lousy with empty space?

Already, other large tenants are publicly considering a move, with some tentatively approved for lucrative incentives from the State of New Jersey. The largest: Deloitte, the mammoth accounting firm with mammoth offices at 1633 Broadway and Two World Financial Center, which, according to subsidy-package documents, “anticipates relocating 1,400 jobs from NYC,” either to New Jersey or Connecticut.

Others with high-paying jobs looking to New Jersey for relocation, and already approved for incentives should they actually move, include insurance company ACE Limited and the financial firm Group One Trading.

“Depository is perhaps the first of several we may see begin to explore [New Jersey],” said Pat Murphy, a vice chairman of brokerage CB Richard Ellis, who is not involved in any of the negotiations mentioned here.

 

DELOITTE IS WIDELY KNOWN in the industry to be working with Cushman & Wakefield brokers to find between 600,000 and 800,000 square feet of office space. As such, it is arguably the largest loose cannon in Manhattan real estate. (By point of comparison, the shiny, new and entirely empty skyscraper at 11 Times Square contains 1 million square feet of office space.)