The House That Dimon Built: JPMorgan Plans Soaring HQ in MidtownBy and
Bank plans to consolidate locations into a bigger building
Construction to begin next year to replace ‘outdated’ facility
JPMorgan announced on Wednesday it will tear down its Park Avenue headquarters and construct a modern tower that will mark a new era for both midtown Manhattan and the lender. The monument to the success of the largest U.S. bank will set in motion a years-long logistical feat that in all likelihood will culminate just about the time that Chief Executive Officer Dimon, 61, hits retirement.
JPMorgan has remained at 270 Park Ave., a glass International-style affair completed in 1961, even as several other big banks have built flashier New York offices in recent years. The details of the design are pending, but one thing is sure: the new building will be bigger than before -- not unlike JPMorgan, which has more than doubled in size under Dimon.
The headquarters will house 15,000 of the bank’s employees and could be between 70 and 75 stories, depending on how wide its footprint is, said a person with knowledge of the company’s plans. The current structure is 52 stories. The new building, which has yet to be designed, could be as much as 500 feet (150 meters) taller than the current headquarters, said the person, who asked not to be identified because details of the plans haven’t been publicly disclosed.
“We are recommitting ourselves to New York City while also ensuring that we operate in a highly efficient and world-class environment for the 21st century,” Dimon said in a statement.
The 2.5 million-square-foot (232,000-square-meter) building would be the first major project under New York City’s Midtown East rezoning plan, which encourages new office construction in the area, the bank and Mayor Bill de Blasio said in the statement. JPMorgan’s current headquarters is an “outdated facility” that was designed in the late 1950s for about 3,500 employees, the company said.
Last month, Dimon announced he will step down in five years and promoted two executives -- Gordon Smith and Daniel Pinto -- to become co-presidents. Dimon helped the firm navigate the financial crisis and grow in areas from investment banking to credit cards and asset management, leading to record quarterly profit last year. He’s used his perch atop the world’s most valuable bank to shape Wall Street, lending, regulation and even economic policy.
Work on the property is expected to begin next year and take about five years to complete. Construction of the new headquarters will create more than 8,000 jobs during the development period, the firm said.
JPMorgan’s Manhattan employees will be temporarily moved to other locations during construction, including 237, 245 and 277 Park Ave. and 390 Madison Ave., where JPMorgan has leased office space, said the person with knowledge of the plans.
The bank will also temporarily move employees to the property it owns at 383 Madison, the former offices of Bear Stearns that the bank inherited when it bought that firm in 2008. A spokesman for the bank declined to comment on JPMorgan’s plans for the property when the new headquarters are complete.
The rezoning of 78 blocks of east midtown Manhattan was approved by the New York City Council in August, with the goal of enabling the area’s aging building stock to be replaced by more modern -- and taller -- office towers.
Under the new rules, landmarks may sell their unused development rights anywhere in the district, rather than just to the properties in their immediate vicinity. JPMorgan plans to buy such development rights so it can build a taller tower.
On such sales, the city would collect either $61.49 a square foot or 20 percent of the total cost of the air rights, whichever is higher, to go into an account to fund pedestrian and transit improvements for the area. The district has about 3.6 million square feet of landmark air rights, including 1.2 million square feet linked to Grand Central Terminal and 1.1 million square feet controlled by New York’s Catholic Archdiocese, tied to St. Patrick’s Cathedral, the Department of City Planning said at the time of rezoning.
With the changes, about 6.5 million square feet of new offices could be built in the area, which is anchored by Grand Central.
The new JPMorgan headquarters “is our plan for East Midtown in action,” De Blasio said in the statement. “Good jobs, modern buildings and concrete improvements that will make East Midtown stronger for the hundreds of thousands of New Yorkers who work here.”
Midtown Manhattan asking rents fell 0.9 percent in the fourth quarter from a year earlier, to $76.42 per square foot, as landlords had to offer incentives to fill space in older buildings, according to brokerage Savills Studley. In the Grand Central area, rents also declined 0.9 percent, to $70.46 per foot. Office landlords in Midtown are under pressure to renovate and update their aging buildings to stay competitive for top tenants, the firm said.
— With assistance by Steve Dickson