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Funds News

JPMorgan sees Bear's Midtown NY site saving $3 bln

NEW YORK, May 14 (Reuters) - JP Morgan Chase will save $3 billion because it no longer will have to build a new Lower Manhattan headquarters for its investment bankers who instead will move into Bear Stearns & Co's BSC.N midtown building, according to JPMorgan Chase Chief Executive Jamie Dimon.

JPMorgan agreed to acquire credit-starved Bear Stearns in mid-March. Dimon, speaking at a UBS AG UBSN.VX financial conference on Monday, said: "This stops us from having to basically spend $3 billion to build an investment banking headquarters downtown."

New York City’s real estate market is slowing as financial companies lay off tens of thousands of workers and developers find bank loans harder to get and more costly. The withering credit has already delayed mega-projects including Brooklyn’s Atlantic Yards and Midtown Manhattan’s Hudson Yards.

JPMorgan will be adding to the supply of office space. The bank has identified one million square feet of offices it won’t need, out of the 4 million square feet it gets from Bear Stearns, that will be sold or subleased, Dimon said.

JPMorgan could cut as many as 4,000 of its own workers as it takes on 6,000 Bear Stearns employees and weighs whether to hire some or all of the 3,500 people it still is reviewing, people familiar with the situation said on Tuesday.

A bank spokesman had no immediate comment.

A spokeswoman for the Port Authority of New York and New Jersey, the lead agency for the World Trade Center redevelopment, said: “We haven’t heard anything new. As far as we know JPMorgan remains interested.”

JPMorgan had unveiled plans for an office tower to be built where the partly demolished Deutsche Bank building now stands, just south of the World Trade Center complex.

The Deutsche Bank building was damaged in the Sept. 11, 2001, attacks and must be torn down, a process first delayed by mold and then by a fatal fire.

Noting Bear Stearns has five trading floors, JPMorgan’s Dimon said the bank would build two new ones. “Those seven in New York City will probably accommodate the whole company.”

Moving the entire investment bank into Bear Stearns’ midtown office tower will make it easier to run the department now split between a couple of buildings, Dimon said.

“During the negotiations, I should point out that some of our investment bankers came up and said, ‘If you need a little bit more money, we’ll chip in so we don’t have to commute,’” he added. (Reporting by Joseph Giannone and Joan Gralla, editing by Phil Berlowitz)

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