Thursday, December 24, 2009
New headquaters of Goldman Sachs
Goldman Sachs made a record profit of $11.6 billion in 2007, and could eclipse that total by the end of this year. The firm received substantial assistance last year from Washington’s Wall Street bailout program, and soon it will move into a brand new 43-story, steel-and-glass skyscraper in southern Manhattan (near the old World Trade Center towers) that was heavily subsidized by the government. The building will include 2.1 billion square feet of space and house more than 9,000 employees.
According to Bloomberg News, New York City officials were so afraid Goldman Sachs might skip town that they made sure the firm was able to sell $1 billion in tax-free Liberty Bonds, received $49 million in job-grant funds, $66 million in added benefits, as well as tax exemptions and energy discounts.
“It’s just an unbelievably bad deal,” William Black, a former bank regulator and now professor of economics and law at the University of Missouri-Kansas City, told Bloomberg. “We could hire any middle-tier guy or gal at Goldman, and they would tell us within 15 seconds that the deal we have made as a nation with Goldman is underpriced by many, many orders of magnitude and that we are insane.”
But just to show Goldman Sachs has a generous—or politically astute—side, the firm recently announced it would forgo receiving $161 million in penalties from NYC over the lack of progress at Ground Zero. The firm was entitled to the money because of security provisions promised by city officials to lure Goldman Sachs into its new headquarters.
-Noel Brinkerhoff
Taxpayers Help Goldman Reach Height of Profit in New Skyscraper (by Christine Harper, Bloomberg News)
Bailout-Blessed Goldman Sachs Cuts City Slack, Dismisses $161M Penalty over WTC Stalemate (by Douglas Feiden, New York Daily News)
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