Goldman Rising

More details on the Goldman Sachs lease, obtained by The Real Estate thanks to the Freedom of Information Law:

As The Observer has reported, Goldman only wanted to return to Battery Park City if it could be guaranteed that the city and state would get its act together on security. The lease stipulates that authorities have until December 31, 2009, to come up with a security plan for the World Trade Center area, or Goldman gets back the $161 million it is paying for the 64-year lease. The deadline may be extended by three months if the city “is proceeding with all necessary diligence.” One day after that, Goldman gets its money back. Goldman is going to put the money into escrow by February.

–Just how much power Goldman has over the authority is unclear. The document never assigns the bank explicit authority to approve or reject it. But a July 29 letter to Goldman from James K. Kallstrom, Governor Pataki’s special adviser on counter-terrorism, gives the bank the right to “participate in the review” of the plan three times during its development—and also to help select the consultant who will draft it. Once the plan is finalized, Goldman can “participate in the substantial implementation of the plan.” A July 21 letter from city Police Commissioner Raymond W. Kelly says Goldman will get a seat at a “centralized coordination center.”

–It is still vague what will be in the plan. The Kallstrom letter says, “The full range of protective systems components, equipment, staffing, construction and operational procedures.”

–Goldman is planning to rim West Street near its property with a series of bollards—hitching posts strong enough to stop truck bombs.

–As for financial incentives, the lease shows that city reduced Goldman’s property taxes by about 12 percent since the original deal was struck a year ago. (To get technical, these aren’t property taxes per se, but payments in lieu of taxes, since Goldman is leasing state-owned land that is normally not taxed.)

–Goldman will get to count 65 percent of its contract employees—i.e. temps and freelancers—as regular employees to qualify for the $250 million or so worth of economic incentives. That number cannot top a quarter of all the bank’s regular workers. Goldman has pledged it would keep 8,100 workers in the city.

–Matthew Schuerman

Goldman Rising