Abelow: now investing in real estate.

It is one thing for a young banker to move to Williamsburg. It is an expected, if unfortunate, product of gentrification. But what does it say when a former Goldman Sachs boss and New Jersey political hand drops a million bucks on a Burg condo?

While former New Jersey governor Jon Corzine distracted himself from the whole MF Global scandal with plans for a new hedge fund (who wouldn't like to think of making millions after you lose billions?), his former chief of staff, Goldman buddy and MF Global second-in-command Bradley Abelow decided to pick up another home, a condo on Karl Fisher Row overlooking the track and field at McCarren Park.

20 Bayard Street.

City records show that Mr. Abelow purchased a three-bedroom, two-bath condo at 20 Bayard Street through the Bradley Abelow Family 2000 Trust. Carolyn Murray, Mr. Abelow's wife, is named as trustee.

The sponsor unit was only listed for $995,000 with Corcoran brokers Deborah Rieders, Sara Shuken and Yael Epstein. But what's $5,000 to a former Goldman partner, who paid an even $1 million for the property?

Given that Mr. Abelow has a comfortable spread in Montclair, N.J., and he really seems more the Upper East Side or formerly-UES-now-Tribeca type, we doubt he bought the space for himself. Even if it is "the tallest building on McCarren Park." No, we'd guess that this loft-like space was purchased as a crash pad for one of his kids. Sure, Wall Street types have been picking up fancy condos on the waterfront, but they're more up-and-comers. Not suburbanites hoping to spend their weekends in the city at Brooklyn Flea. Or maybe they are?

Not that the place would make a bad pied-a-terre. Mr. Abelow could count his gold on the aptly-named Calcutta Gold marble countertops or take long, relaxing baths in the deep soaking tub to forget the headache that was MF Global.

It could also be an investment property, since the Brooklyn, especially the North Brooklyn, rental market is so hot right now. Then again, given Mr. Abelow's recent track record (a reelection bid lost to Chris Christie, the whole MF Global thing), maybe this really is the kiss of death for the Burg.

kvelsey@observer.com

A Department of Justice probe into the collapse of MF Global is going nowhere fast, according to The Wall Street Journal, which reports that former CEO Jon Corzine met with federal investigators for the first time last week. Meanwhile, sources tell The Journal that it's looking more unlikely criminal charges will be filed.

“Many people on Main Street distrust Wall Street right now, yet few can put their finger on why,” said Jamie Raab, publisher of Grand Central, according to The Times.Which is an overwrought explanation for giving former Goldman Sachs executive Greg Smith $1.5 million for his book, Why ILeft Goldman Sachs. A simpler reason: People want the dirt.

England's Financial Services Authority levied an $800,000 fine against Peter Cummings, a former head of corporate lending at HBOS, and Mr. Cummings isn't happy about it:

For the past three and a half years I have been singled out and subjected to an extraordinary Orwellian process by an organisation that acts as lawmaker, judge, jury, appeal court and executioner. The FSA has never had to prove its case to anyone other than itself, and sits safe in the knowledge that few individuals can afford to take it on.

“The decision to single me out for investigation is even more grotesque given that even the FSA has to admit in its notice that other senior people were involved in the critical decisions for which I am taken to task. This is tokenism at its most sinister, and has made it feel throughout like institutional oppression.

Moore Capital Management, the $15 billion hedge fund founded by Louis Moore Bacon, reduced its head count by 10 to 15 people, letting go of research analysts and portfolio managers, according to Bloomberg.

JPMorgan announced another reorganization of its corporate and investment banking division.

Shares in Abercrombie & Fitch rose yesterday after the retailer hired Goldman to help ward off activist investors. Relational Investors, the hedge fund managed by Ralph Whitworth, increased its stake in A&F from about 2 percent to 3.8 percent earlier this year.

Underwriters of initial public offering are increasingly inclined to allow company insiders sell shares before lockup periods end, according to The Journal. Traditionally, underwriters prohibit insiders from selling shares in the first 180 days after an offering, preventing the market for a company's stock from being flooded by sales as employees and early investors look to cash in.

Wall Street may be pulling for Mitt Romney, but it expects Barack Obama to win the presidential election, according to an informal poll conducted by CNBC.

Freshly tanned from a recent visit to Mexico, where he was overseeing a new project, the slicked-back scion grew steadily more enthusiastic as he discussed 40 Wall Street, an office tower that, with its rising and falling tenant roster, has contributed to the Trump Organization executive vice president’s growing reputation as a competent steward of the family name, a reliable fixer and successful dealmaker in his own right.

Donald Trump Jr. (photo credit: Hannah Mattix)

“When I took over the building, there was a lull in the market,” recalled Mr. Trump, who said the address remains one of his well-known father’s favorite properties. “By the time we fixed everything up and got it going, there was a high. It was certainly a unique experience. My focus had been on residential development as well as some resort hotel development, so to learn that part of the business and to spend time with that part of the business was fascinating to me. So I got involved and made it a big part of my day-to-day life.”

Indeed, 40 Wall Street had languished in the Trump portfolio since the mid-’90s, when family paterfamilias Donald Trump purchased the building from Kinson Properties, a Hong Kong-based company. Back then, internal discussions raged on whether to convert the office tower into residential property or to keep it as offices, according to insiders. The senior Trump eventually settled on keeping it as an office tower, and nearly 20 years after that decision, 40 Wall Street’s fortunes fell on his oldest son, who until then had never managed an office building.

(Disclaimer: Mr. Trump is the brother-in-law of Observer Media Group owner Jared Kushner.)

The junior Trump had spent much of his career overseeing a stretch of luxury developments along the West Side rail yards. He then jumped from project to project, working on construction of Trump International Hotel and Tower in Chicago and handling Trump licensing deals across the world.

But managing an office building as storied as 40 Wall Street, until recently known among tenant brokers as a difficult place to do business in part because of at least one Trump executive’s heavy involvement with leasing at the address, was entirely new to Mr. Trump.  

Now faced with his first-ever office-building management assignment, Mr. Trump made a strategic play to woo brokers, who, perhaps more than anyone else, had the leverage to sell 40 Wall Street to potential office tenants. “I look at the brokerage world as your unpaid sales force until they perform,” he said. “What I wanted to do was befriend those people, get to know the players.”

He reached out to Jeffrey Lichtenberg, an executive vice president at Cushman & Wakefield who had worked with the Trump Organization in the past. Mr. Lichtenberg and his team were eventually brought on as the exclusive leasing agents for 40 Wall Street, and from there, they courted other big brokerage firms to rouse up business.

“What we did was, instead of having one big party, we had a series of lunches with each firm,” said Mr. Lichtenberg. The message, brokers on both sides of the table said, was simple: 40 Wall Street was open for business. It wanted to work with brokers and it wanted new tenants.

“Because Don was cooperative and helpful to me and then we were cooperative to the brokers, the brokers realized that the best place for them to bring a tenant to get a deal done was 40 Wall,” added Mr. Lichtenberg. “Don helped turn around the image of the building.”

What also helped spur leasing activity was Mr. Trump’s willingness to sweeten the deal by offering incentive packages. He also kept a simple pledge: if a broker brings in business to 40 Wall Street, he would make honoring that broker’s commission a top priority.

“If I tell them I am going to do something, I am going to do it,” said Mr. Trump. “If I tell them that they’re going to get their commission check on this moment, they are going to get it on or before this moment,” he added, hitting the table with an index finger for emphasis.

That pledge worked. Jones Lang LaSalle broker Dan Suozzi, who had lunch with Mr. Lichtenberg and his team at Bobby Van’s during that recruitment period, estimates he has brought four tenants to 40 Wall Street in the past two and a half years, the most recent being John Carris Investments for roughly 13,000 square feet. (Former New Jersey Governor Jon Corzine was rumored to be subleasing space from John Carris.)

“Don Jr. was a pleasure to work with and he does the right thing and is very personable,” said Mr. Suozzi. “It makes a difference when you’re bringing a tenant through the building.”

Once they had the ears of intrigued brokers, Mr. Trump and his team focused on redefining 40 Wall Street’s image as a financial services asset. “With the Wall Street address 10 years ago, it was all financial industry,” said Mr. Trump. “Today, in the digital age, the street location is less critical.”

Mr. Trump also honed in on what his family’s building could offer that his competitors couldn’t. He targeted a crowd that didn’t fit the traditional mold of a Wall Street tenant, selling them on 40 Wall Street’s “impeccable” management services and attractive deal incentives. The Trump Organization has a “fungible” balance sheet that enabled it to offer value propositions, he added.

Wall Street address aside, 40 Wall Street had the charm of a Midtown South building with Midtown South amenities. It had recently renovated tons of turn-key space, and it had a Duane Reade megastore, the first of its kind that, with its sushi bar and a hair salon, could give the average customer a new ’do with her bottle of Kaopectate.

“With the Condé [Nast] deal and with everything that is going on downtown, I think it’s an opportunity for buildings to have boutique space they can do something with and offer that value proposition to tenants that are going to be the guys who are going to feed off those megadeals,” said Mr. Trump.

The offer worked. Midtown mainstays like the Harry Fox Agency and Duane Reade committed to the building for substantial office space, each with square footages in the five figures. Wiedlinger Associates and Leslie E. Robertson Associates also moved into the building.

“I had never done a deal with the Trumps in my 18-year career,” said Greg Taubin, a senior managing director at Studley who represented the Harry Fox Agency in its 47,144-square-foot sublease on the fifth floor. “You would always hear different things about having to deal with the organization, but those days are over. The reason is because of Donny Jr. getting involved and making decisions.”

Now faced with tenable vacancies in the base of the building, nearing a total of 100,000 square feet, Mr. Trump is enjoying his time at 40 Wall Street while also working on the development of Trump International Golf Links in Scotland.

“What makes my job interesting is that on any given day I can work on something that’s totally different,” he said. “It keeps things very interesting and fluid.”

drosen@observer.com

Mr. Corzine has set his sights on sharing space with John Carris Investments, a full service investment banking firm whose corporate headquarters are located inside the Trump Organization-owned office tower, The Wall Street Journal reports.

40 Wall Street (Courtesy Property Shark

A spokesman for John Carris did not respond to a request for comment.

A person close to the building said they were unaware of Mr. Corzine’s plans.

“We certainly didn’t know anything about it until we saw it in the paper this morning,” said the person. “It’s not like he’s [Corzine] renting space from us,” the person added.

40 Wall Street, located near the New York Stock Exchange, has seen a flurry of leasing activity in recent weeks. NYC pharmaceutical giant Duane Reade relocated its corporate headquarters to the 72-story building, where it already has a sushi and hair-styling megastore inside the building. Music publishing company The Harry Fox Agency also moved to 40 Wall Street from its former offices at 601 W. 26th Street.

A person close to John Carris Investments said that Mr. Corzine is looking for office space, not to join the firm itself, the paper reported.

MF Global Holdings filed for bankruptcy protection last October after bets it had made on euro zone debts led the company to financial ruin.

Mr. Corzine stepped down as the chief executive of MF Global Holdings in November.

But his MF Global Holdings hangover continues. Yesterday, a group of 38,000 Montana farmers who were customers of MF Global Holdings filed a class action lawsuit against Corzine, claiming the former Goldman bigwig had used money from their accounts to pay off debts.

2012: Corzine, Orin Kramer raising for Obama. [Page Six]

1964: Bill Clinton visited Times Square, saw "a hooker approach a man in a gray flannel suit." [Politico]

The Lede:  "You can't find a hooker in Times Square anymore, former President Bill Clinton lamented Wednesday." [Adam Lisberg]

John Cook: He can't wait to read serious snark about Trump's birther-fueled campaign. [Gawker]

Birthers: Romney says "The citizenship test has been passed." [Aliyah Shahid]

Cuomo Intervention: Proposed bill would give electric companies permanent property tax abatements, "removing the basis" for an expected 12 rate hike in energy bills.[Fred Dicker]

Cuomo Travels: Touting Recharge New York program, in Buffalo, this morning. [Tom Precious]

Cuomo's Deal: Retroactive raises for Council 82 members; wage freeze till 2014. PEF won't accept similar deal. "The state made it clear that accepting these concessions would not ensure PEF members would not be laid off. [Casey Seiler]

Cuomo's Deal: Editors like it. [Daily News]

Cuomo and DiNapoli: Accused extortionist sheds light on their tension. [Rick Karlin]

Cuomo's Popularity: A "honeymoon." [Jacob Gershman]

Rent Rules: Letting rent laws expire would be a "tsunami" says Perkins. Golden disagrees. [Glenn Blain]

Cars: "Assembly Speaker Sheldon Silver, D-Manhattan, spent $26,000 on a 2011 Ford Taurus in February." [Joe Spector]

Changing Chancellors: Walcott easily clears a hurdle. [Sharon Otterman]

School Safety: Wildcat strike tomorrow? [Philip Messing]

Clothes: "New Jersey is wasting $3.1 million on clothing allowances for workers who aren't required to wear special clothes." [Lisa Fleisher]

Changing Chancellors: "The effort to turn this one instance into some sort of general referendum on non-traditional leadership shows how divorced our strident national education conversation is from the challenges of actually improving our schools." [Andrew Rotherham]

Happy Birthday: Assemblyman Marcos Crespo isn't afraid to send a polite note to embattled lobbyist Richard Lipsky. [Facebook]

Taxes: Nick Kristof's "raise my taxes" column makes the person with whom he files jointly, flinch. [Twitter]

After a legendary 1998 Christmastime palace coup, Jon S. Corzine was ousted from Goldman’s helm. The trader pivoted to a career in New Jersey politics, which ended this January after the senator-turned-governor lost reelection by more than 80,000 votes. “He could retire and go to Florida,” said John Whitehead, the 88-year-old former Goldman Sachs co-chairman. “He could have racehorses. He could have a yacht. He could do whatever he wants. I think he wanted to come back.”

And so he did. On Saturday, March 20, Goldman’s former chief executive was in a New York office building, touring the ninth-floor headquarters of an unremarkable futures brokerage named MF Global. He was smiling. It reminded him of an office he knew when he was a junior Goldman bond trader. “You know,” he said, “this feels like 55 Water Street.”

Three days after the tour, he was named chairman and chief executive of the little-known company, which does not look or sound or make money like a serious full-service financial institution. In fact, it’s lost money for four straight quarters. Mr. Corzine thinks it can become something very different. It’s already applied, for example, to be one of the few firms that are allowed to deal directly with the Federal Reserve Bank of New York. “When I joined Goldman Sachs in 1975,” he said at the headquarters, “there were a few thousand employees and it had an application pending with the New York Fed to be a primary dealer. Sound familiar?”

Wall Street is not an easy or warm world, but compared to the medieval fiefdoms of New Jersey, it’s a gorgeous bastion of reason and order. It’s going to take time to bring MF Global up to speed, but at least Mr. Corzine has a fighting chance. “I think it’s with a certain degree of relief that he comes back to Wall Street. It’s a kind of sanctuary,” said Ross K. Baker, a political scientist at Rutgers University. “He met his match in New Jersey.”

“Thank God we’re back in Hollywood,” a film producer sighs sweetly at the end of a classic Simpsons episode, “where people treat each other right.” Mr. Corzine isn’t obsessing over the past. “I’m a guy who lives in the here and now,” he said in a brief interview this week, “and the future.”

MR. CORZINE, 63, WAS BORN to an Illinois grain farmer and an elementary school teacher. In college, he worked at the post office and spent time shoveling concrete onto highways. Neither job lasted long. After getting his M.B.A. from the University of Chicago, he took a job trading bonds for Goldman Sachs in New Jersey. That was in the mid-1970s, long before the piranhas and linebackers made bond trading macho and lucrative.

He was sweater-vested, bearded, avuncular and soft-voiced, but by the end of 1985, he’d been named to Goldman’s management committee. He has a reputation for uncommon mildness, but is also reported to have chased a lob during a tennis match with his then-wife and another couple “with such fervor that he fell on a water spigot and broke his back.”

He became the co-head of fixed income in 1988 and, after then-chairman Stephen Friedman’s abrupt exit six years later, the head of the most important firm on Wall Street. Along with John Mack’s rise a few months earlier at Morgan Stanley, his coronation marked the beginning of the era of the trader—away from prim and crisp investment banking. “The trading side is where the biggest risk is,” a partner told The Times then. “It gives you the biggest chance to lose your shirt or make a bundle. And Goldman needed someone close to the top of the firm that understands that.”

In his modest office, he kept black-and-white photos of the firm’s past leaders. But his tenure didn’t last long. Amid arguments over taking Goldman public, the dangerous collapse of the hedge fund Long-Term Capital and the direction of the firm’s growth, his executive committee hatched the firm’s first cinematic coup. While he spent a family vacation skiing in Telluride, such colleagues as Hank Paulson and John Thain agreed to push Mr. Corzine out. He reportedly spent his last days working in his suit from a car parked outside Goldman headquarters.

A NEW YORK MAGAZINE PROFILE of his early days in politics shows him complimenting women on their hairdos at the Bergen County Senior Picnic, where milk spilled on his slacks.

Politics is hard. But friends like Janet Hanson, a former Goldman Sachs fixed-income vice president, were called to his televised appearances to lend support. “They would send a car for me, and I would calm him down before he spoke,” she said. “It was to cheer him on, and I think he needed that, he really did. He needed his Goldman fan club there. That sounds silly, but it was hard. What he was trying to do was hard.” Family and other friends were there, too, she said. “I think it was saying, ‘You go, guy, go. You can do this.’”

Mr. Corzine won his Senate seat in November 2000. At $62 million, his campaign doubled the previous record for the most expensive ever. In Washington, he voted prominently against the Iraq war, but the Senate was not a career highlight. “He wasn’t real happy there,” said Professor Baker, who visited the senator in DC. The two talked about his gout.

“I’m 58 now,” he said in 2005, “and I’m the last person on every committee I sit on. I’d have to stay in Washington until I’m 80 to be a committee chairman.” That November, he won New Jersey’s governorship, though the race wasn’t easy. After the dissolution of his marriage, his wife, whom he’d met in kindergarten, spoke about him as tainted by ambition and state politics. “Jon did let his family down,” she said publicly, “and he’ll probably let New Jersey down, too.”

“It’s a crazy political system. As feral as New York politics can be, New Jersey in some ways is preternatural,” Professor Baker said, describing the localized boss system and extreme fragmentation. “People cling tenaciously.”

On April 12, 2007, he was being driven 91 miles per hour in a Chevrolet Suburban to a meeting with Don Imus and the Rutgers women’s basketball team when the SUV hit a pickup that had swerved to avoid another car. He was not wearing his seat belt. His femur, broken in two places, was sticking through the skin of his left leg. He received 12 pints of blood; spent eight days on a ventilator; and fractured 11 ribs, his sternum, his collarbone and a vertebra.

Joshua Zeitz, a senior policy adviser and now Mr. Corzine’s chief of staff, said that the accident was, in retrospect, a minor event in a mostly successful governorship. “To me, it’s not that he’s leaving something that was too tough to handle,” he said, offering that Mr. Corzine had cut the size of government while increasing funds for education, avoiding cuts for vulnerable senior citizens and taking steps toward ending the state’s infamous property taxes. “It’s a success story that I think historians will someday appreciate,” he said. He pointed out that he himself is a professor of history.
As for his more notable failures, like his attempts to privatize New Jersey’s toll roads, and especially the reelection loss, another source with knowledge of Mr. Corzine’s thinking said he doesn’t feel that he was vanquished by New Jersey’s gruesomeness, just that the economy got tremendously horrible. The voters, he feels, were only voting with their pocketbooks.

"FOR ME, IT WOULD HAVE BEEN totally debilitating. It wasn’t for him,” said Dan Neidich, a former Goldman Sachs management committee member. “He’s one of those guys who can keep his eye on what he’s trying to achieve.”

It takes seven days to turn a cast-out businessman and exiled politician into a new chief executive. On Tuesday, March 16, a 36-year-old managing director at J.C. Flowers & Co.—the buyout firm founded by, named for and led by the bespectacled former Goldman dealmaker, J. Christopher Flowers—flew to Chicago for a meeting. When the executive, David Schamis, landed, he got a call saying that the CEO of MF Global, which Mr. Flowers owns a sizable portion of, was resigning. “Not good,” he said into the phone. Mr. Schamis went to the hotel and called up his boss. “Chris, we have a problem,” he said. “How do you feel about asking Jon to do this?”

Mr. Flowers and his former colleague had been talking, loosely, about working together. On Wednesday morning, he called Mr. Corzine up. “I’m happy to talk about it,” the former governor said. Meanwhile, Mr. Schamis called MF Global’s board to say he had an idea about a CEO replacement. He called him Mr. X and said he had “extreme credibility.”

When he hung up, he was supposed to go to the Chicago meeting, but he decided there was too much going on in New York. He got back on a plane. When he was standing at the American Airlines gate, he got a call from Mr. Corzine. As they scheduled a meeting for later that day, another former governor, Rod Blagojevich, happened to walk by.

At the meeting, Mr. Corzine greeted MF Global’s general counsel, Laurie Ferber, Goldman’s former co–general counsel of the fixed-income, currency and commodities division, with a hug and a kiss. That made Mr. Schamis happy, he said.

Mr. Corzine was given an annual report to read, which he brought back on Friday with highlights and questions written into the margins. A number of other executives came in. There was talk. When they left, Mr. Schamis asked how the former governor might feel about joining as an interim chief executive. “If I’m going to do this,” he said, “I’m going to do it full time.” Over the weekend, details of his compensation were hammered out. Everyone settled on a $1.5 million salary, a $1.5 million signing bonus and a $3 million target bonus for the next fiscal year.

On Tuesday morning, a few hours after Mr. Corzine had a 7 a.m. Yale Club breakfast with Mr. Schamis and the firm’s outgoing chairwoman, the deal was announced. He is chairman and chief executive of a Wall Street company again—its third CEO in a year and a half.

“There’s no regret, believe me. I’m excited,” Mr. Corzine said. “There will be nothing that makes me feel better than the purpose of the next several years of my life, as long as I can still see my grandkids: that I’m part of a recognized, growing, successful, respected institution.”

MF GLOBAL HAS HAD its troubles. In June 2007, the brokerage firm was spun off from the giant British hedge fund, Man Group, which had built it up after buying the futures arm of the defunct brokerage Refco. “Oh Man! MF Global Disappoints,” a Forbes headline said after the IPO. The estimated stock price range had been set at $36 to $39, but it debuted at $30 and dropped 10 percent on the opening day.

Things got worse. In late February 2008, the firm disclosed that a 40-year-old man in its Memphis office had made rogue bets on wheat futures that cost the brokerage $141.5 million. MF Global had reportedly removed internal trading limits to speed up electronic trading.

There were rumors that MF Global was losing clients. The company’s stock price dropped from over $28 to under $10, and before the end of the year, to under $2. In December, MF Global was fined another $10 million to settle charges over supervision violations from the previous six years.

“Clearly, successful second acts on Wall Street are very rare,” Roy C. Smith, the former president of Goldman Sachs International Corp., and an N.Y.U. professor. “But this case is a little different.”

After Mr. Corzine was announced as the firm’s new leader, its stock price went up to nearly $9, well over its previous 52-week high. “This is a five-year project,” the former governor said in the interview, “if not a decade project.”

The idea isn’t to merely clean it up. Mr. Corzine wants to grow the futures brokerage into a mini-Goldman—an investment bank like, say, the late Donaldson, Lufkin & Jenrette, big but not too big. “I want to fill the space people long for: a very professional, high-performance, high-ethic organization,” he said. The source with knowledge of Mr. Corzine’s thinking said MF Global could grow a money-management business, an advisory business, a venture capital fund, an Indian mutual fund!

But he’s also aware of the history of petered-out Wall Street second acts. “I get that. There’s a risk of that,” he said. “But I have confidence that with discipline, steady, focused work, this is a franchise that can be taken from what it is, probably one of the leading futures brokers ever, into an outstanding position in the broader financial services field.”

“Sometimes I think we take on jobs where the doing isn’t as much fun as the being,” said Mr. Neidich, the former Goldman Sachs management committee member. “I think he’s going to like doing what he’s doing day to day.”

mabelson@observer.com

New hires:

Shams Tarek, spokesman. He most recently worked for the NYS Senate Democrats (and, full disclosure, is a former reporter who I worked with at the Queens Tribune).

Robin Golston, political director. She has worked for former Senator Clinton and current Senators Gillibrand and Schumer.

Kristie Stiles, Celeste Wolter, Michael Giacco will be fund-raisers. Rice said they raised money for Governors Paterson and Spitzer, as well as nationally for Democrats.

Adam Alonso, another fund-raiser. In the past he raised money for Melinda Katz and Jose Peralta, so if you have money and live in Queens, expect a phone call from him.

Also on the finance team is Rafi Jafri, who claims a rare experience among Democrats: work as Jon Corzine's finance director (Corzine, of course, used to pay for his own campaigns).

"The best thing to do is kind of what the p.r. consultants said, speak a little less, do a lot to serve your clients and your shareholders," Jon Corzine told Bloomberg Television this morning.

Having made his own missteps on the way to losing his re-election bid last year, the former New Jersey governor knows how easy it can be to let something like "God's work" slip out there. "It is easy to mis-phrase something at the wrong time. Maybe you thought you were tongue in cheek," Mr. Corzine said.

Though he was ousted in an ugly coup ten years ago, Mr. Corzine isn't one of the haters. "People are broadly frustrated with the financial institutions, and since it is the leader of the industry and has shown great success over a long period of time, I think it's more vulnerable," he said.

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.)

Deloitte's application for more than $35 million in incentives from New Jersey could legitimately be viewed as merely an attempt to acquire bargaining leverage with Manhattan landlords, or as part of Deloitte's exhaustive exploration of its options.

Even so, Mr. Murphy, who spent much of his career in New Jersey, said, "It starts as leverage at first. But when you start looking at some of these incentives that Jersey is offering, it becomes incredibly compelling very quickly."
As do the rents.

"With new construction in Hoboken, a tenant from New York starts out saying, 'Well, my rent in midtown is $65 [a square foot], downtown it's $45'; but in Hoboken, they can be essentially $20 for brand-new space," Mr. Murphy said. "I do think the border war will pick up steam as more demand hits the market, and we'll see more people looking at how they can reduce cost and take advantage of not just the workforce in Manhattan that can commute to New Jersey, but also the six million people who live in northern and central New Jersey."

Jonathan Gandal, a Deloitte spokesman, said in an emailed statement that the application for incentives was merely "preliminary research of the tri-state area commercial real estate market in advance of our expiring leases in New York, New Jersey and Connecticut. The New Jersey grants are available to us, but no decisions have been made. Tax incentives are one of multiple factors we're weighing."

In September, yet another company with large Manhattan offices was approved for incentives by New Jersey's Economic Development Authority (companies do not receive the incentives unless they actually move). Insurance firm ACE Limited, currently with offices at 1133 Avenue of the Americas, 140 Broadway and 1325 Avenue of the Americas, was tentatively awarded $9 million to relocate and create 336 jobs in New Jersey. The firm is said to be working with Jones Lang LaSalle to find a sizable chunk of office space.

This is the type of action that leads New Jersey officials to boast about the subsidies they offer, incentives that New York officials freely acknowledge are far more generous than what most companies can receive in the city.

In 2008, on its relocation subsidy program alone-the Business Employment Incentive Program-New Jersey signed agreements to give out more than $130 million in incentives, an amount that comes on top of tens of millions poured into numerous other incentives aimed at attracting new companies to move a few miles west. The BEIP program is income-based, and thus gives more money to companies with higher wages.

"It's a spectacular deal for us," said Jerry Zaro, Governor Corzine's economic development czar. "We give no money out to anyone who doesn't show a net positive economic benefit to the state."

Such rhetoric irritates many New York business groups and landlords eager to match New Jersey's subsidy play. Particularly in Lower Manhattan, the state and city have been liberal in awarding tax benefits to companies that relocate or expand, but generally speaking, the subsidies still don't compare, and the cost of rent is tremendously lower outside of Manhattan.

"Right now, New York doesn't make the short list on where to expand or put back-office jobs," said Kathryn Wylde, president of the Partnership for New York City, a leading business group. Ms. Wylde is urging a plan to rival the BEIP program, one that would give an income tax credit to employers that relocate or expand in New York.

Brookfield Properties, which now houses much of Deloitte's operations, said in a statement that it supports more such incentives.

"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."

ebrown@observer.com, drubinstein@observer.com

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Scotiabank Leaving Lower Manhattan?

It Depends on What Your Definition of Manufacturing Is

Big Fight Over St. Regis Retail; Chera Cries 'Conspiracy' in Lawsuit

New Jersey's governor—for whom Barack Obama made two splashy campaign appearances in the home stretch—was going down, the first Democrat to lose a statewide race there in 12 years, and only the second in 37 years to lose one by more than a point. And the national Republican Party was ready to exploit it for all it was worth.

"That sound you hear," G.O.P. strategist Mike Murphy confidently tweeted as Corzine's demise became obvious, "is a lot of Blue Dog Democrats in House running now for the tall grass. NJ loss will be big whammy for them."

The G.O.P.'s gloating spin for the foreseeable future was set: Look, we just beat an incumbent Democrat who attached himself to Obama in a deeply blue state! This White House, with its stimulus plans and health scare schemes, is politically toxic—and incumbents with the dreaded "D" label are heading for the same fate in 2010.

And then, as if on cue, the votes started pouring in from the upstate 23rd District—a district, mind you, that last sent a Democrat to Congress when Abraham Lincoln was president. And the leader was none other than the Democratic nominee, Bill Owens—the same man who received a last-minute campaign visit from that (supposedly) politically toxic White House's own vice president, Joe Biden.

By the time most of the votes were tallied, Owens was on his way to victory over Doug Hoffman, who ran on the Conservative Party line but who was embraced by the national G.O.P. in the race's closing days.

And with Owens' apparent triumph, the G.O.P.'s spin went straight down the toilet. So we lost New Jersey, Democrats could now say. Big deal. Corzine was as popular as swine flu. It's not like it had anything to do with Obama—because if that was the case, then we wouldn't have just won one of the most reliably Republican Congressional districts in the nation!

Instead of touting a complete off-year sweep, which they seemed poised to do earlier in the evening, Republicans found themselves at the end of Election Night trying desperately to spin an at-best muddled result into clear-cut evidence of a national rejection of President Obama (and a simultaneous awakening of the G.O.P.).

But it wasn't that at all, and no one was about to fall for it—thanks to Owens. Had he lost in the 23rd, the G.O.P. would have earned the off-year sweep it so badly wanted—and, for a few brief minutes, even tasted. Instead, the White House and national Democrats can call Election '09 a wash. (Well, they'll call it a major victory, but the press will treat it as a wash, which is good enough for Obama and his allies.)

Moreover, the apparent defeat of Hoffman will shine much more attention in the coming days on the G.O.P.'s civil war.

The right celebrated when his independent candidacy—itself the result, in part, of New York's outdated primary-less procedure for House special elections—forced the G.O.P.'s moderate nominee, Dede Scozzafava, out of the race the weekend before the vote. It was, they claimed and the press agreed, the final nail in the coffin of the old Rockefeller wing of the G.O.P. For years, moderates had been fleeing the G.O.P.; now they were being told definitely that they weren't welcome in the party anymore.

To conservatives nationally, this was a terrific development—a chance to show that their eagerness to move even farther to the right after the 2006 and 2008 elections and their decision to blindly and loudly oppose all of President Obama's initiatives could win at the ballot box.

But it all backfired. Scozzafava's exit and subsequent endorsement of Owens, it's now clear, infused the Democrat's campaign with significant new support in the race's closing days—a clear repudiation of the right's claim that the G.O.P. can win without even trying to appeal to the middle.

With Scozzafava as their nominee (and without Hoffman and his national conservative allies running a third-party campaign), the Republicans would have won this special election. Which would have given them their coveted off-year sweep. Then they would have been free to spin away about all of the horrible and troubling implications for Obama's presidency.

Instead, though, they were left talking up New Jersey while trying to pretend the Owens-Hoffman race didn't happen. 

By the way, in case you missed it, here was one of Murphy's final tweets of the night: "I don't have county by county numbers to work from but it looks like Owens in NY-23 to me. Shocker!"