Bear Stearns renews lease

Real Estate Weekly, March 12, 2003 by Elaine Misonzhnik

This week the city is celebrating a small, but important victory: Bear Stearns & Company is here to stay.

The investment bank was threatening to move 1,500 of its employees to New Jersey because the rent at its MetroTech Center location in Brooklyn was about to go up. Thanks to some creative maneuvering on the part of the Economic Development Corporation, however, it has just signed a 20-year, 290,000-SF lease renewal.

According to a new agreement between the city and Bear Stearns, the bank will be able to convert the tax credits left over from the building of its Manhattan headquarters on Madison Avenue into property tax exmptions for MetroTech landlord Forest City Ratner. The parties involved in the transaction say this is a mutually advantageous arrangement.

"Bear Stearns was considering two other buildings -- 55 Water St. in Manhattan and 101 Hudson St. in New Jersey. Of course, the tax credits were not the only thing that got the deal done, but they were the last piece, the piece that got it over the goal line," said the bank's broker David W. Levinson, vice chairman of Insignia/ESG.

"Their decision to remain here is great for Brooklyn, great for New York City, and of course terrific for MetroTech. We want to thank the City for its efforts in bringing this to a conclusion that will prove to be a win for everyone," said Forest City Ratner president Bruce C. Ratner.

Certain published reports, however, maintain that Bear Stearns might have been unduly greedy in its dealings with the city. The bank has used the threat to move to New Jersey once before, ending up with $36 million in incentives to move to Brooklyn. In addition, it has received another $39 million for its headquarters. To ask for more benefits now, when the City is in a fiscal crisis, some feel is inexcusable.

But officials at the Economic Development Corporation deny that New York will have to spend an extra cent to help Bear, Stearns.

"They have agreed to stay at MetroTech with no additional incentives," said Janel Patterson, a spokesperson for the agency. "The city will pay nothing."

Besides, Mayor Bloomberg seems to approve of the deal, whatever it took.

"Bear Stearns' decision to move 1,500 employees to MetroTech in 1991 was a catalyst for the burgeoning growth and renaissance of Downtown Brooklyn," he said. "I am very pleased that they had decided to recommit to MetroTech."