JPMorgan Chase & Co. plans to build a headquarters in midtown Manhattan that would combine other offices into a new, taller building for 15,000 employees on Park Avenue.
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 a statement Wednesday. JPMorgan’s current headquarters at the same site, 270 Park Ave., is an “outdated facility” that was designed in the late 1950s for about 3,500 employees, the company said.
“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,” Chief Executive Officer Jamie Dimon said in the statement.
The headquarters 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.
Work on the property is expected to begin next year and take about five years to complete, with most employees at 270 Park relocated to nearby buildings during development. JPMorgan, the biggest U.S. bank, plans to buy development rights from landmarks in the surrounding area so it can build a taller tower. Construction of the new headquarters will create more than 8,000 jobs during the development period, JPMorgan 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 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.
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.