Goldman to build second Jersey City tower

NEW YORK, July 19 (Reuters) - Goldman Sachs Group (GS.N), the world's largest investment bank, said on Thursday it is building a third office tower in the New York City area to accommodate rapid growth in its staff.

Goldman on Wednesday received approval from Jersey City, New Jersey, to build a 30-story, $560 million office building on property directly across the Hudson River from lower Manhattan. The firm already has a 42-story, $1.3 billion Jersey City tower, and is building a new 42-story headquarters in the Battery Park City area of lower Manhattan.

Goldman has grown at an explosive rate since its 1999 initial public offering, and its need for space has increased. Total employees have nearly tripled to 26,000 from 9,000 in that time, with 13,000 based in the New York City region.

The new tower, which would hold 3,500 front and back office workers, will be built on land owned by Goldman, located next to the current Jersey City tower site.

Once again, the world's most profitable bank will get a helping hand from local taxpayers.

Jersey City's Municipal Council granted a property tax break worth $4 million a year for the building, already approved by the city's planning department. Goldman said it would probably begin construction in 2009, the time it expects to complete its $2.4 billion headquarters.

Two years ago Goldman received some of the largest ever financial benefits from New York City in exchange for its promise to keep 9,000 employees and add 4,000 in Manhattan. That deal raised eyebrows since Goldman's current Jersey tower is only 60 percent occupied and still has room for 3,000 more staff.

New York state and city officials, eager to keep companies in a downtown still recovering from the Sept. 11, 2001 attacks, provided $1.65 billion in "Liberty Bonds" and $140 million in tax breaks and cash, as well as a sharp reduction in other payments in lieu of taxes.