Subj: [Charleston Voice] JPMorgan Is Selling The Building That
Houses Its Gold Vault
On the surface, there is
nothing spectacular about the weekend news that JPMorgan is seeking to sell its
1 Chase Manhattan Plaza office building.
After all, the former
headquarters of Chase Manhattan Bank, located deep in the heart of the
financial district and which was built by its then chairman David Rockefeller,
is a remnant to another time - a time when banking was about providing loans,
not about managing and trading assets which has become the realm of Midtown New
York, and since JPM already has extensive Midtown exposure with its offices at
270, 270 and 245 Park, the 1 CMP building always stood out as a bit of a sore
thumb. Of course, as Zero Hedge readers first
learned, the big surprise is literally below the surface, some 90
feet below street level to be exact, where the formerly secret JPM gold vault
is located, which also happens to be the biggest commercial gold vault in the
world.
It was only a month ago
when we learned that JPM was planning
to exit the physical commodity business, and today we know that the firm is
set on disposing of its one crowning asset in the commercial gold vaulting
industry.
This begs the question:
is JPM set to fully and completely exit the precious metals vertical which it
inherited when it was handed Bear Stearns on a $10 platter (together with the
now defunct firm's legacy short positions)? If so, is it also in the process of
unwinding any and all legacy precious metals exposure including rumored
"whale-sized" shorts in the paper silver and/or gold axes, and what
happens to the price of silver and gold when a massive stock position becomes
"flow" in the other direction (i.e., short covering)?
Finally, if indeed JPM
is getting out dodge, is there some hope that a semblance of normalcy will
return to a market best known for the AM-PM closing fix arbitrage, as well as
the occasional bid stack take out slam and close (and open) banging? Or, will
the buyer of the building, and vault, be none other than the Federal Reserve,
which will merely take this opportunity to merge its own, and the world's
largest commercial gold vaults, which just happen to be located next to each
other and connected by tunnel deep below the ironically named Liberty Street?
Inquiring minds
certainly want to know.
JPMorgan Chase & Co.
(JPM) is seeking to sell 1 Chase Manhattan Plaza, the lower Manhattan tower
built by David Rockefeller in the late 1950s, as the company reduces its office
space in the city.
The bank would relocate
about 4,000 employees, most of the people who work in the 60-story skyscraper,
to other New York locations, said Brian Marchiony, a spokesman. JPMorgan
occupies about half of the space in 2.2 million-square-foot
(204,000-square-meter) building, according to CoStar Group Inc. (CSGP), a
Washington-based firm that follows office leasing.
The building may fetch
at least $600 million, according to a person with knowledge of the offering.
The cost to buyers would be higher because they would assume any conversion
expenses, said the person, who asked not to be identified because the
discussions are private.
An offering of the
tower, a city landmark designed by architect Gordon Bunshaft, would test the
downtown office market. Shrinking financial companies have left lower Manhattan
landlords with at least 6.3 million square feet of space to fill, according to
data from brokerage Newmark Knight Frank Grubb. The tower may achieve its
highest value as a mixed-use property, with a hotel, additional retail or
apartments added, said Dan Fasulo, managing director of Real Capital Analytics
Inc., a New York-based research firm that tracks commercial real estate sales.
“You could do a
department store in the base,” he said. “It’s a very exciting potential
mixed-use opportunity, in my mind. I think the market will receive it very
well.”
And the vault in the
basement, "longer than a football field," would become a restaurant
or a paintball arena?
* * *
For those who missed it,
here is the excerpt from the exclusive Zero Hedge expose shining some light on
the world's biggest and now supposedly almost empty, commercial gold vault.
Curiously (or perhaps
not at all), when the CME on behalf of JPM submitted the certification filing
alongside the comparable such supplements as filed by Brinks above, it
requested a FOIA (Freedom of Information Act) confidential treatment. As a
reminder, to be eligible for FOIA exemption status the protected information
must be of vital importance to the nation's safety. This is precisely what JPM
thought the details surrounding its New York vault are. To wit:
Pursuant to Sections 8
and 8(a) of the Commodity Exchange Act ("CEA"), as amended, and Commission
Regulation 145.9(d), NYMEX and COMEX request confidential treatment of Appendix
A, Appendix B, and this letter on the grounds that disclosure of Appendix A
and/or Appendix B would reveal confidential commercial information of the
submitters (NYMEX and COMEX) and of other persons. Pursuant to Commission
Regulation 145.9(d)(5), NYMEX and COMEX request that confidential treatment be
maintained for Appendix A and Appendix B until further notice from the
Exchanges. We also request that the Commission notify the undersigned
immediately after receiving any FOIA request for said Appendix A, Appendix B or
any other court order, subpoena or summons for same. Finally, we request
that we be notified in the event the Commission intends to disclose such
Appendix A and/or Appendix B to Congress or to any other governmental agency or
unit pursuant to Section 8 of the CEA. NYMEX and COMEX do not waive their
notification rights under Section 8(f) of the CEA with respect to any subpoena
or summons for such Appendix A or Appendix B.
Please contact the
undersigned at (212) 299-2207 should you have any questions concerning this
letter.
Sincerely, /s/ Felix
Khalatnikov
Yet oddly enough, the
FOIA request letter itself, while also being filed with a request for
Confidential Treatment, never got it. As a result it was posted at this
address. Ooops.
But a far bigger oops,
is that on the first page of said declassified confidential FOIA app, in black
ink, we get the missing piece:
In addition, the
Exchanges are providing the Commission with the application summary of
requirements for the JP Morgan Chase Bank N.A. facility located at 1
Chase Manhattan Plaza, New York, NY.
And so, despite the
extended attempts at secrecy, we finally hit the proverbial goldmine
vault.
So what do we know about
1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure,
built in the 1950s, was the headquarters of the once-legendary Chase Manhattan
corporation, and which when it was built was the world's sixth tallest building,
not much.
So we set off to learn
more.
To learn more, we first
went to the motherlode: the Landmarks Preservation Commission, whose
report on 1 CMP describes everyone one wants to know about this building
and then much more, such as that:
One Chase Manhattan
Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a
6-story base, of which 5 floors are beneath grade.
So the old Chase HQ,
once the stomping grounds of one David Rockefeller, and soon to be the other
half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed...
Reading on:
Excavations, said to be
the largest in New York City history, reached a depth of 90 feet
Or, about the same depth
as the bottom-most sub-basement under the NY Fed...
