The Freedom Tower

This is an on again, off again story. Gail Kalinoski, contributing editor at Commercial Property News wonders if JPMorgan Chase finally backed off on plans to build an office tower at the World Trade Center site in lower Manhattan.

“That may be happening despite word two months ago that the Wall Street giant would still develop a skyscraper on the site of the former Deutsche Bank building even though it had agreed to acquire troubled Bear Stearns and its Midtown office tower and trading floors at 383 Madison Ave. JPMorgan Chase officials had reportedly assured the Port Authority of New York and New Jersey, lead agency for the World Trade Center redevelopment, that it would develop the Tower 5 site for something other than a new investment banking headquarters.

Doubt has been cast on that plan this week. Reuters reported today that JPMorgan Chase CEO Jamie Dimon talked about a glut of office space during a UBS AG investors’ conference Monday. Dimon told the attendees that JPMorgan Chase expects to have to sell or sublease about 1 million square feet of the 4 million square feet of space it will get in the Bear Stearns merger, according to reporting by Joseph Giannone and Joan Gralla. Dimon was quoted in the Reuters story as saying, “This stops us from having to basically spend $3 billion to build an investment banking headquarters Downtown.”

Last year, JPMorgan Chase had announced plans to spend at least $2 billion on a 1.3 million-square-foot tower on the Tower 5 site at a redeveloped World Trade Center. The bank planned to locate its investment banking headquarters there, including large trading floors. JPMorgan Chase now plans to put the investment banking HQ in the Bear Stearns building. A spokesperson for the Port Authority could not be reached by CPN before press time today. But Reuters reported this morning that the Port Authority had not been informed of any new decisions by JPMorgan Chase.

Robert Sammons, director of research for Colliers ABR, told CPN today he had also heard JPMorgan Chase expected to give up about 1 million square feet of space following the Bear Stearns acquisition. He said it would likely “come out of one of the Midtown towers.” Sammons said he had been surprised when JPMorgan Chase said several months ago it still planned to go ahead with the Downtown Manhattan tower. “We had written it off, but they claimed they were going to do it anyway.” If JPMorgan Chase does go ahead with the Tower 5 development, Sammons said there “would be benefits in the long term” from building Downtown. “