The quiet skyscraper  

Posted by Denis Haack in , , ,

We live in a world that is networked in ways we cannot see, fully comprehend, or at times even imagine. The idea that brokers on Wall Street dealing in credit default swaps could have an impact on my retirement seemed unlikely not too long ago. I hadn’t even heard of credit default swaps. I didn’t own any. Still don’t. I don’t even particularly like hearing about them. But as it turns out the Wall Street brokers really exist, the impact on my retirement certainly is real—though whether credit default swaps actually exist as things with actual value is a question worth debating.

In any case, some huge investment banks—“too big to be allowed to fail”—have lost money, while some have made money, very large amounts of money during the crisis. One firm that has had a profitable time is Goldman Sachs. They recently built a new headquarters, a massive new skyscraper to house the brokers, lawyers, secretaries, and managers and that make up the firm.

Most large investment banks love the limelight, and calling attention to their flashy, expensive headquarters is just part of the process of projecting a successful image. Paul Goldberger picks up the story in “Shadow Building,” which you can read here (The New Yorker, May 17, 2010; p. 114-115):

Goldman Sachs, one of the largest and most profitable financial firms in the world, has a different view of things. Several thousand Goldman employees have just moved into a sleek steel-and-glass headquarters in lower Manhattan that is emphatically not called One Goldman Sachs Plaza. At 200 West Street, as the building is known, the name of the firm appears nowhere on the exterior, or in the lobby, or even on the uniforms of the security personnel or the badges given to visitors. Forty-three stories tall and two city blocks long, the Goldman building appears to have been designed in the hope of rendering the company invisible.

These days, it would be understandable if Goldman Sachs wanted to disappear: being the object of a suit by the Securities and Exchange Commission and, reportedly, of a criminal investigation by federal prosecutors is hardly conducive to the desire for a high profile. But this building, designed by Henry Cobb, of the firm Pei Cobb Freed & Partners, was planned long before the financial crisis, and before accusations were made that Goldman had bet against its own clients in the subprime-mortgage market. The design speaks less to Goldman's current problems than to the firm’s long-standing obsession with being both extremely powerful and utterly inconspicuous.

Today, the idea that Goldman Sachs could operate with a low profile seems bizarre, even delusional. But for a long time it did. Its previous home, at 85 Broad Street, was a precast concrete tower, from 1983, one of the most forgettable tall buildings in New York. Having outgrown those premises, Goldman hired Cesar Pelli to build a glass tower in Jersey City, facing the Hudson River—finished in 2004, it’s the tallest and most elegant skyscraper in New Jersey—and laid plans for a new headquarters on the New York side, too. It fixed on a plot in Battery Park City, one block northwest of Ground Zero, which had been a parking lot for years. At the time, there was not a lot of development going on in lower Manhattan, and Goldman’s plans appear to have sent city and state officials into giddy ecstasy. They quickly agreed to give the company a hundred and fifteen million dollars in tax breaks and cash grants to build the new tower. More singular still, state and local governments decided to give the firm another big subsidy by letting it use $1.65 billion in tax-exempt Liberty Bonds, intended to stimulate economic development after 9/11, to cover part of the building’s $2.1-billion cost. Last month, Goldman announced that it had made a profit of nearly three and a half billion dollars in the first quarter of this year—enough to have paid for the entire building, in cash, in a couple of months, without any help from taxpayers.

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