April 23, 1993, New York Times, "BankAmerica Signs A Lease for 8 Floors At the Trade Center," by Thomas J. Lueck,
The BankAmerica Corporation announced yesterday that it had signed a 15-year lease to move 1,100 workers to eight floors of Tower One of the World Trade Center.
The move by the nation's second largest bank holding company was portrayed by bank executives and government officials as a vote of confidence in the Twin Towers after the terrorist bombing of Feb. 26. In the wake of the explosion in lower Manhattan, fears surfaced that security concerns would prompt many companies to move out when their leases were up and others to decide not to move in.
It was clear yesterday that the Port Authority, which owns the trade center, was forced to offer extraordinary incentives. Officials close to the negotiations said BankAmerica would receive two years' free rent, effectively giving it a square-foot rental lower than many other tenants in the towers pay.
The bank's decision to move workers from at least 10 other buildings in Manhattan followed weeks of rumors that it had changed its mind about moving into the tower after the bombing. Bank officials said at a news conference that it had looked at alternative buildings in New Jersey, Phoenix and California, and had, in fact, postponed any decision after the bombing.
But Dan Costello, the corporation's executive vice president in charge of real estate, said that after bank officials reviewed security systems in the World Trade Center, including improvements made since the bombing, they were convinced that the complex was "the safest building in New York, and perhaps even in the country."
BankAmerica executives announced their decision at a news conference attended by Mayor David N. Dinkins, Gov. Mario M. Cuomo and other officials, who described it as a major expression of confidence in the troubled complex. "BankAmerica is sending an important message to the world that the World Trade Center is back," Governor Cuomo said.
Although not all details of the deal were disclosed, it was clear that the city, the state and the Port Authority of New York and New Jersey had mounted an aggressive campaign for at least nine months to lure the company to the World Trade Center and prevent it from leaving Manhattan.
The bank holding company, second in size to Citicorp, is to receive sales-tax breaks and other incentives from the city and state worth $15.5 million over the 15 years. The package includes a promise by New York City to buy some machinery and equipment to be used by BankAmerica.
BankAmerica, based in San Francisco, also said yesterday that it had signed a new 20-year lease and will retain 360 employees at the Bank of America Building at 335 Madison Avenue, near 46th Street. It will also retain 240 employees at 40 East 52d Street, the former Security Pacific Building. Its 1,700 Manhattan employees are in international banking, foreign exchange trading, stock trade processing and other operations.
Financial incentives have become all but routine in government efforts to attract and retain big business. In an example last year, Morgan Stanley & Company, which had threatened to move 4,100 employees to Stamford, Conn., received a tax-incentive package worth $39.6 million over a 10-year Manhattan lease.
But, according to people close to the negotiations, who spoke on the condition of anonymity, it was deep concessions offered by the Port Authority that were most critical in attracting BankAmerica. The effort almost certainly created political conflicts for the agency since it is accountable to both New Jersey and New York and was courting a large tenant that might otherwise have selected a New Jersey office building.
After BankAmerica begins paying rent, authority officials said, it will pay between $25 and $35 a square foot. Though they declined to be more specific, they said the Tower One space would have brought 20 percent more in the robust years for Manhattan real estate in the mid-1980's.
It was unclear yesterday whether the Port Authority had offered the free rent before the Feb. 26 explosion, or whether BankAmerica used the uncertainty after the bombing to extract the further concessions.
BankAmerica had made a verbal pledge to lease its World Trade Center space by December, several officials said. But by the February blast, they said, that oral promise had not been made formal in a legally binding contract, and a legion of economic development officials set out on a fresh campaign to persuade the bank holding company to sign its lease.
With BankAmerica occupying eight floors of Tower One, authority officials said the complex would be 92 percent occupied. The rate is higher than before the explosion, when 88 percent of the complex was filled.
BankAmerica's committment to the complex comes at a time when most tenants in the buildings say life has returned almost to normal.
No large tenants have left the complex since the bombing. But because all are required to meet legal requirments of their leases and would lose money if they left before the leases expire, it is not known whether some will elect to leave when they have the option in coming months and years.
Not Back in Offices Yet
One of the last remaining World Trade Center tenants that has not yet returned to its offices in the complex is Deloitte & Touche, the accounting firm, which has seven floors in Tower Two and moved 1,200 workers to other buildings in Manhattan. Because of the pressures of the government's April 15 deadline for filing income tax returns, the firm had said it had not plans to return to its trade center offices until after that deadline.
Yesterday, Paul Higgins, a Deloitte & Touche spokesman, said the firm had still not returned. The reason, he said, is that cleaning the firm's Twin Tower offices -- the Port Authority's responsibility -- had not been completed. He declined to say when the firm would return.
But other companies said their return to the trade center complex was accomplished without any snags.
"There are no lingering problems," said George Mullen, executive vice president of Fiduciary Trust International, an investment management concern, which returned with 500 employees to five floors of Tower Two on March 25. Since then, it has signed a lease for an additional floor for 45 employees.