“Incentives, especially with regard to large tenants such as Deloitte, are critical to retain the employment base in Lower Manhattan,” said Melissa Coley, a Brookfield spokeswoman. “The Downtown Alliance recently succeeded in lobbying Albany to extend the existing incentives. However, more needs to be done, both as of right and on a case-by-case basis, to financially compete with New Jersey and Brooklyn.”
THIS, OF COURSE, IS HOW arms races flare, as states pass increasingly lucrative incentive packages to compete with each other to move employers from one side of a border to another, with the end result being the same number of jobs in the region. (Though, as a Rutgers study on BEIP found, a state is left little other rational choice but to compete in this race, lest they lose the jobs.)
The periodic Jersey-Manhattan arms race goes back to at least 1985, when Bankers Trust relocated more than 1,000 jobs from Manhattan to a converted warehouse in Jersey City’s Harborside Financial Center, according to CBRE’s tristate chairman, Bob Alexander. Since then, said Mr. Alexander, the 16 million-square-foot Jersey Waterfront office market has become dominated by finance and insurance.
“Frankly, the only industry Jersey City is missing is the legal industry,” Mr. Alexander said.
The Bloomberg administration, for its part, says it plans to maintain its relatively restrained approach to office-tenant subsidies amid the economic downturn.
“We take the potential loss of any New York City employer seriously, and we actively engage with these companies,” David Lombino, spokesman for the city’s Economic Development Corporation, said in a statement. “Rather than competing dollar for dollar with other cities’ incentives, we’re confident that our strategy of investing taxpayer monies in maintaining the city as a place that businesses want to locate will ensure the greatest return in the long term.”
More on the Manhattan office market: