UPDATE 1-Clearing firm to move 1,600 jobs to N.J. from NYC

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By Joan Gralla

NEW YORK Oct 13 (Reuters) - New Jersey has succeeded in persuading the Depository Trust & Clearing Corporation to move 1,600 employees to Jersey City from Manhattan, starting in 2013, Governor Jon Corzine said on Tuesday.

DTCC, which settles and clears equity, debt and derivative trades, will receive various financial incentives as part of the deal, Corzine said in a statement.

These include a job creation grant worth about $75 million.

The company may receive nearly $15 million of grants to customize the Jersey City building in the Newport area near the Hudson River, pending approval by the Economic Development Authority, a spokeswoman for the authority said.

In return, New Jersey expects to receive about $100 million in corporate business taxes over 20 years -- the term of the lease -- and $186 million in personal income taxes, said the authority spokeswoman, Nicole Royle.

But the subsidies were criticized by a nonpartisan research group called New Jersey Policy Perspective. The group said the state offered DTCC many advantages that even the company cited, from lower cost real estate to mass transit.

Referring to the office complex, Naomi Bressler, a policy analyst for the nonpartisan New Jersey research group, said that "although the addition of new jobs to the state is always welcome news, we are concerned that providing Newport with nearly $12 million and DTCC with another $74 million in tax breaks that should be going to the state will further hurt New Jerseyans."

DTCC said it will keep 700 employees in lower Manhattan, as "part of its ongoing and long-standing commitment to New York City and State."

New York City and New Jersey often compete to attract financial companies with high-paying jobs.

A spokesman for New York Mayor Michael Bloomberg had no immediate comment. Both Corzine, a Democrat, and Bloomberg, an independent, will stand for re-election in November.

After the Sept. 11, 2001 attacks, many financial firms in Lower Manhattan relocated employees to midtown as well as to Jersey City and the surrounding suburbs, although some returned to Manhattan in subsequent years.

In a separate statement, the DTCC said it had finalized an agreement with the New York Stock Exchange for a new derivatives clearing arm, called New York Portfolio Clearing. The joint venture should be running by the second quarter of 2010, depending on regulatory approvals. (Reporting by Joan Gralla; Editing by Jan Paschal)