$50 Million in Incentives Fueling Nasdaq's
Manhattan Move; NYSE Incentives Also Finalized

By JACK LYNE • Site Selection Executive Editor of Interactive Publishing

The Nasdaq Stock Market (www.nasdaq.com) and the New York Stock Exchange (NYSE at www.nyse.com), twin barometers for the U.S. economy's unprecedented upsurge, have hit their own incentives jackpot.

Nasdaq has just agreed to relocate its headquarters to Manhattan, while the NYSE has finalized the New York City relocation to which it initially committed in 1998. Together, the two incentive packages will total US$1.95 billion.

Nasdaq's Incentives Total $50 Million

The just-announced Nasdaq deal is by far the smaller of the two incentive packages, though it's still certainly substantial.

The state's Empire State Development Corp. (www.Empire.state.ny.us) and the city's New York Economic Development Corp. (www.newyorkbiz.com) have together pledged roughly $50 million in incentives over the next two decades to the No. 3 U.S. stock market.

Nasdaq's New York operations will be relocating to the two top floors of the 53-story, 2.12 million sq. ft. (190,800 sq. m.) One Liberty Plaza, located adjacent to the World Trade Center in Manhattan's financial district.

Brookfield Properties Corp. (www.brookfield.ca), which may also be a player in the NYSE deal, owns a 100 percent freehold interest in One Liberty Plaza. In addition, Brookfield owns three of the four World Financial Center (WFC) office towers, plus 100 percent of the WFC's retail space, and it has development rights on approximately 2 million sq. ft. (180,000 sq. m.) of buildable area north of the WFC. The company also holds a 100 percent freehold interest in Manhattan's 245 Park Ave.

Nasdaq's fellow tenants at One Liberty Plaza will include Bank of Nova Scotia, Royal Bank of Canada and New York Life Health Care. Nasdaq will be occupying space previously utilized by Long Term Credit Bank of Japan. The Tokyo-based bank reportedly paid $40 per sq. ft. for the 260,000 sq. ft. (23,400 sq. m.) in One Liberty Plaza's two floors. Nasdaq will reportedly pay $50 per sq. ft., with its annual rent totaling $13 million.

NYSE's Expansion Larger, More
Expensive Than Originally Announced

The recently finalized NYSE incentives are far larger - as are the space needs for the largest U.S. agency auction market.

(Nasdaq doesn't have a physical trading floor, as it's an electronic dealer exchange. "Nasdaq," in fact, is an acronym for NASD Automated Quotations system, reflecting the organization's subsidiary status with the National Assn. of Securities Dealers.)

The NYSE's space needs, in fact, have grown substantially larger than those announced in the 1998 agreement with the city and state.

For example, Gov. George Pataki and Mayor Rudolph Giuliani initially said that the deal included building a 650,000-sq.-ft. (58,500-sq.-m.) office tower for the NYSE to serve as the exchange's trading facility. The final agreement, however, calls for building a 1.3-million-sq.-ft. (117,000-sq.-m.) tower at a cost of $765 million. NYSE officials say the exchange needs the space to accommodate dramatic increases in listings and trading volume.

Brookfield Properties is reportedly in the running to develop the tower.

Two Deals Solidify NYC's Status
As Earth's Financial Epicenter

The NYSE move is a short one - across the street, in fact, to the corner of Wall and Broad. No one, though, seems to be grousing about the final agreement's inflated costs and space. That quietude is undoubtedly related to the fact that the NYSE had previously threatened to move across a state line - into New Jersey, which has aggressively pursued the Big Apple's financial sector.

Bagging both the NYSE and Nasdaq solidifies New York's claim to being Earth's financial epicenter.

Giuliani, in fact, called the original NYSE announcement on Dec. 22, 1998, "a Christmas gift to the future of the city. . . . If we did nothing else, it would assure the fact that 50 years from now, New York City will be the financial capital of the world."

The deal also provides for the city to own the new NYSE headquarters, which it will rent to the exchange. The initial 1998 agreement's 50-year term called for the NYSE to initially pay $10 million a year in headquarters rent, with rents thereafter increasing by 15 percent at 10-year intervals. As of this writing, the rental costs stipulated in the NYSE's final agreement have not been disclosed.

As expected, the deal also has a tint of "NYPD Blue." The New York Police Dept. will set up a training facility in the current headquarters that the NYSE has occupied since 1903. The agreement also provides for the NYPD to station cops inside the new headquarters.

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