UBS may move U.S. investment bank to New York City
NEW YORK (Reuters) - UBS AG (UBS.N) (UBSN.VX) is looking at least four potential sites in Manhattan as it considers relocating its North American investment banking headquarters into the heart of New York City from suburban Connecticut, sources familiar with the bank's plans told Reuters.
A potential move by the Swiss bank could be a shot in the arm for New York's economy and would underscore the city's status as the world's key financial center.
A source familiar with the matter told Reuters earlier on Thursday that the bank was considering moving to Manhattan from Stamford, a sea-side town in neighboring Connecticut, although any potential move would not occur until 2015.
"I've been saying for the last 10 years: there is a reason to come to New York," New York City Mayor Michael Bloomberg told a local audience on Thursday.
"I'm not knocking Stamford or any other place, but the competitive proposition in New York ... is that this is the intellectual capital of the world. This is where young people in particular, but also people even my age, want to come," he said.
Connecticut and New York City, both eager for the Swiss banks' tax revenue, could start a bidding war for it. UBS' highly paid bankers and traders are also desirable because their work and spending creates jobs in other sectors.
UBS is considering locations in downtown and midtown -- or it may decide to stay in Stamford, knowledgeable sources said.
UBS is looking for 1 million square feet of space, the size of a large office tower. It has hired real estate services company CB Richard Ellis Group Inc (CBG.N) to find space.
POSSIBLE BIDDING WAR
UBS has looked at the yet-to-be-built Three World Trade Center, on the site of the World Trade Center twin towers which were destroyed in the September 11, 2001 attacks, sources said.
The new 2.8 million square-foot building, which will be 80 stories high, should open in 2015. It could accommodate large trading floors, a key requirement for investment banks.
The Port Authority of New York and New Jersey, a public body that also operates airports, bridges and tunnels in the New York region, owns the World Trade Center site, which many financial firms deserted after the 2001 attacks.
UBS, just like any other business that moved to the World Trade Center, would get tax breaks and sweeteners. "These are all basically 'as of right benefits,'" said James Parrott, chief economist of the Fiscal Policy Institute, a think tank.
"UBS doesn't even have to negotiate for this; they could negotiate (benefits) on top of this and if you price this out, it's going to be over $100 million," Parrott said.
Spokesmen for the mayor, World Trade Center developer Larry Silverstein, and the Port Authority, had no immediate comment.
The average net effective rent -- which factors in incentives for large tenants -- was $26.23 per square foot in downtown in the first quarter, versus up to $55.70 in midtown according to real estate services firm Cushman & Wakefield.
To entice UBS to move from New York City to Stamford, Connecticut in the early 1990s granted UBS an incentive package of about $120 million, with its final component ending around 2015, state and Stamford officials said.
Catherine Smith, Connecticut Commissioner of Economic and Community Development, said it was premature to discuss any new incentives UBS might be granted to keep it in the state.
Laure Aubuchon, Stamford's director of economic development, said "We've certainly been talking to them all along and they have continued to tell us no decision has been made yet." She declined to offer details about possible incentives, saying she wished to keep them confidential.
UBS has also looked at the nearby World Financial Center, owned by Brookfield Properties Inc BPO.N and located further to the west in downtown Manhattan, two sources said.
Some younger bankers and traders who work in the Stamford office, but live in New York City -- some 45 minutes away by train -- say they would prefer to work closer to home. But others who live in Connecticut are unhappy about moving.
In a statement released on Thursday, UBS said "we routinely evaluate our space allocation as these leases expire and/or space becomes available."