Bank subsidy for Ground Zero move

The New York Times reports that JP Morgan Chase will receive hundreds of millions of dollars to build a 42-story skyscraper in downtown Manhattan.

The deal follows threats by the company to move its headquarters to Connecticut from its location in mid-town New York.

New York City officials have already paid Goldman Sachs $650m (£330m) to build new offices in Battery Park City.

That deal was criticised at the time as most outrageous example of corporate welfare in city history, according to the New York Times.

But the paper says that JP Morgan Chase will receive an even better deal, with tax breaks, discounted electric power and rent subsidies worth $100m from city and state authorities.

And it says that rent subsidies will amount to $50m per year for 15 years, or $750m.

JP Morgan Chase is a huge, and very profitable company.

It has assets of $1.4 trillion, annual revenues of $100bn and profits of $14bn in 2006, and ranks 11th on the Fortune 500 list of the biggest US companies.

But city and state officials fear that without the subsidies, key financial institutions would desert New York City, and particularly the Wall Street area.

After the terrorist attacks of 9/11, many financial firms - including JP Morgan Chase - moved their headquarters out of downtown New York, where the World Trade Center had been located.

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