JPMorgan Under Pressure to Fund Transit Upgrades Near New Tower
(Bloomberg) -- JPMorgan Chase & Co. is under pressure to do more to fund transit improvements near its expanding midtown Manhattan headquarters, the latest instance of community leaders pushing a company to shoulder more of the costs of growth.
The bank’s 2.4 million-square-foot (223,000-square-meter) project is the first under New York City’s 2017 rezoning of the Midtown East area. JPMorgan is able to build a taller tower because it agreed to buy so-called air rights from Grand Central Terminal and St. Bartholomew’s Church. It was required to contribute more than $40 million to a fund for public-space enhancements, but doesn’t have to make transit upgrades mandated for some other developers because its site falls outside of the requisite zone, said City Council Member Keith Powers.
But that hasn’t stopped politicians from pushing the bank to be a good neighbor. While the transportation upgrades aren’t legally required, the philosophy behind the rezoning “was to say when you increase density and height, you also have to address transit improvements in the area,” said Powers, whose district includes the JPMorgan site. “In addition to what they’re required to do, I’ve asked them to look at making enhancements to the Grand Central entrance adjacent to their building.”
Last month, Manhattan Borough President Gale Brewer recommended that JPMorgan look at making a “significant contribution to transit infrastructure” that could include a new stairway and elevator entrances, an improved pedestrian corridor, repairs of the Grand Central train shed, and a power station for additional train service.
“As we move forward, we will continue to have ongoing engagement with city planning, the City Council and other stakeholders in pursuit of a world-class building that serves the needs of our company, the neighborhood and city,” said Andrew Gray, a JPMorgan spokesman.
JPMorgan’s talks with the city come after community activists protested plans by Amazon.com Inc. to build a new office hub in the Long Island City neighborhood of Queens, raising concerns about housing costs, strains on transport and tax breaks for the world’s richest company. Amazon this month withdrew its plans for Queens.
Similar concerns have arisen in Amazon’s hometown of Seattle, as well as in Silicon Valley, where the growth of companies including Alphabet Inc., Facebook Inc. and Apple Inc. has fueled opposition from residents who are worried the influx of new workers will push housing even further out of reach.
The New York City subway serves around 6 million people every day, but riders frequently grapple with service problems due to underfunding and overcrowding. The Metropolitan Transportation Authority faced heightened criticism last year when it said that only 58.1 percent of weekday trains arrived on time in January.
“If you bring double the number of people, you have to contribute to upgrading your transportation system,” said Layla Law-Gisiko, acting chair of the Land Use, Housing & Zoning Committee of Manhattan’s Community Board 5. “You cannot expect the MTA to transport an additional 4,000 workers just because you wanted a fancier building.”
Law-Gisiko, Brewer and Powers also took issue with the bank’s recent attempt to limit public space around its new tower. The rezoning requires sites as large as JPMorgan’s to provide at least 10,000 square feet of public space, but the company argued last year that it could only find room for 7,000 square feet. After months of public backlash, the firm said it would revise its proposal to include the requisite 10,000 square feet. It’s scheduled to present the updated plan to the City Planning Commission on March 13, and will then need to get the green light from Council Member Powers.
“It was an effort to be responsive to what was raised at the community board,” JPMorgan’s Gray said. “We heard them, and then went back to see what we could do to address it.”
JPMorgan expects structural demolition of 270 Park Ave. to start in April and take between 15 and 18 months, Gray said. The new building is scheduled to be completed as early as 2024. In the meantime, the bank is scattering workers across other locations throughout Midtown, Hudson Yards and the Financial District.
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