Big Board Reaches Accord to Stay in New York
The New York Stock Exchange struck an agreement with the city and state of New York to build its first major new facility in a century while staying in its historic lower-Manhattan neighborhood.</br></br>The city and state are putting up a record $560 million in subsidies, tax breaks and other benefits to build a 60-story office tower, including a state-of-the-art trading facility, across from the Big Board's current home at Broad and Wall streets.</br></br>The long-expected agreement is critical to both city and exchange. The stock exchange gets vital space to add more foreign stocks and trading technology, while the city and state retain the institution that defines the New York City financial district, which has only recently recovered from the early 1990s real-estate recession.</br></br>But the deal also carries risks for both sides. The Big Board, by far the world's biggest stock market, is prospering now, but its "open outcry" system of trading stocks on a physical floor faces serious challenges from electronic-trading systems. Such systems have prompted many foreign markets to scrap their floors entirely. And though it is the financial district's first new office tower in 10 years, signs of a slowing economy have made speculative new construction risky, and some projects are already being called off around the country.</br></br>The agreement, announced jointly yesterday by the state, New York City Mayor Rudolph Giuliani and Big Board Chairman and Chief Executive Officer Richard Grasso, is subject to a more definitive agreement and to approval by the exchange's board. Under the deal, the city and state will acquire a site across Broad Street now primarily occupied by J.P. Morgan & Co. and find a developer to build the tower.