September 19, 2007 — MERRILL Lynch executives say the three possible locations in the city for a new headquarters remain candidates, though none of them is ideal.

That’s because with the city popping at the seams, and no ideal location available to accommodate the type of floor plan envisioned by the bulge-bracket firm, none is a sure bet.

What Merrill execs did tell us was that size matters and that the lower Manhattan options at the new World Trade Center and World Financial Center are simply too small and would force the bank to develop a second building in Jersey City.

But the financial giant also worries that Vornado Realty Trust’s Hotel Pennsylvania site, across from Madison Garden, is not attractive enough to employees.

It is also described as too “iffy,” as it needs prolonged civic and city variances and approvals to be as large enough to fill the bank’s needs - at least 3 million square feet with one large 80,000-foot trading floor.

“Hudson Yards [on the West Side near the Javits Center] is just not ready yet and we’re not pioneers,” said one top Merrill executive, who spoke on the condition of anonymity, adding the development plans for an area now made up of railroad tracks is still on the city’s drawing boards.

Competing Brookfield Properties’ and Silverstein Properties’ proposals call for several smaller trading floors, but Merrill traders say they need eye contact with multiple co-workers to make proper bids and therefore feel they must be on one floor.

Brookfield’s proposal for a 500,000-foot expansion of 2 World Financial Center would still leave Merrill 20 percent short on its trading floor needs.

Meanwhile, Silverstein Properties’ upcoming new Tower 3 at the World Trade Center site comes up 15 percent short, and faces another hurdle for Merrill - the rents he’s seeking.

Said the Merrill source of Larry Silverstein: “He’s insane in terms of the numbers he’s throwing around.”

Both the Brookfield and Silverstein sites would require the expense of building and operating a second tower to accommodate a move by 3,000 to 5,000 people who won’t fit into either of the two downtown options.

“We need flexibility going forward. It is a critical [need],” added our source. “[No one wants] to be the bonehead who built us the wrong trading floor 10 years from now.” >PAGE 1>

This entry was posted on Friday, October 19th, 2007 at 9:53 pm While Dave was in Money. Responses are currently closed, but you can trackback from your own site.