Business

DEAL’S DOWNTOWN DOMINO

BANKING giant JPMor gan Chase said yesterday that it will probably move its investment-banking unit into Bear Stearns’ headquarters at 383 Madison Ave. – a step that landlords and brokers said makes it unlikely that JPMorgan will go ahead with plans for a new office tower near Ground Zero.

Meanwhile, real estate players trembled over the leasing-market fallout of a merger between two Wall Street firms with more than 11 million square-feet between them in Manhattan and Brooklyn, a number certain to be pruned significantly after the inevitable staff layoffs.

But it was the fate of JPMorgan’s plan for a new, 42-story tower to house 7,000 high-earning employees downtown, most of who would move from Midtown, that had builders and brokers buzzing yesterday.

JPMorgan Chase spokesman Joe Evangelisti told us, “We would intend to move our investment bankers into the Bear Stearns building” on Madison once JPMorgan completes its chump-change purchase of Bear Stearns for $236 million. The 383 Madison tower alone is valued at around $1.2 billion.

Asked about the Ground Zero site, called 5 World Trade Center, Evangelisti said only, “We are leaving our options open downtown. It could be a very valuable opportunity for us.”

That was a far cry from what JPMorgan Chase CEO Jamie Dimon said last June, when he termed the project “critical to our firm’s long-term future,” and cited pride in “taking a leadership role in supporting lower Manhattan and helping to revitalize the World Trade Center area.”

Since the new tower was supposed to house JPMorgan’s investment banking unit, it was unclear what use the firm would have for the building after swallowing Bear Stearns.

Port Authority spokesman Stephen Sigmund said, “We have every expectation they’ll continue their commitment” to 5 WTC.

JPMorgan Chase is supposed to pay the PA $300 million to lease the land for its “beer-belly” tower, so dubbed because of a bulge in its middle floors to accommodate 56,000 square-foot trading floors.

But no lease has yet been signed.

The PA is still waiting for the Lower Manhattan Development Corp. to clear the land at 130 Liberty St., site of the ruined hulk of the former Deutsche Bank building.

Under a term sheet signed last year, the PA must turn the site over to JPMorgan Chase by September, although the deadline could be pushed back six months beyond that.

But last summer’s fatal fire at 130 Liberty St. and endless delays in completing demolition have left the actual takedown timing uncertain.

A downtown source said JPMorgan Chase “has gotten increasingly antsy” over the uncertainty in knowing when it can start on a skyscraper that will cost over $1 billion to construct – particularly as inflation is driving the cost higher every month it’s delayed.

Real estate insiders, most of who do business with both JPMorgan and/or Bear Stearns, did not want to speak for the record. But all expressed skepticism JPMorgan would proceed downtown.

One prominent executive said, “Jamie Dimon is the smartest guy on the planet. The Bear Stearns building is right next door to JPMorgan’s Midtown campus. It’s less than 10 years old and has totally adequate trading floors. The JPMorgan people have coveted it for years.”

If JPMorgan Chase does back off the 5 WTC plan, it will be a psychological blow, although not necessarily an economic one, to lower Manhattan.

The new tower has been cited as a crucial vote of confidence for downtown by LMDC Chairman Avi Schick, Port Authority chiefs Anthony Coscia and Anthony Shorris and former first deputy mayor Dan Doctoroff, among many others.

But Goldman Sachs is completing an even larger new tower in Battery Park City. And a change of heart by JPMorgan wouldn’t necessarily be the worst thing for the Port Authority.

“If I were them, I wouldn’t be worried,” said Dan Fasulo of research firm Real Capital Analytics. “I think a hotel or mixed-use project is actually the highest and best use of that site.”

Downtown Alliance President Liz Berger said, “It’s simply too early to tell” what JPMorgan Chase will do.

“But the truth is that while we’d like JPMorgan to build, we now have a diversified economy downtown. If they don’t go ahead, it would be a loss, but not a defin ing one.”

Beyond the question of a new downtown tower is the issue of how badly the absorption of Bear Stearns would hurt the overall office market.

JPMorgan currently has at least 7 million square feet of office space in Manhattan, much of it concentrated in a “campus” at 245, 270 and 277 and 345 Park Ave. Bear Stearns has about 1.5 million feet in Manhattan, some of which it was already planning to shed before the current crisis.

Leasing brokers cautioned it was too early to worry about space being dumped on the market – but every one of the usually talkative dealmakers declined to be quoted.

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Legendary Catskills resort the Nevele is up for sale via Eastern Consolidated and expected to fetch around $26 million.

The 487-acre, 433-room Nevele Grande Resort & Country Club, which has lured vacationers for 100 years, is in Ellenville, 90 miles north of the city. Eastern’s Alan P. Miller, Jeffrey B. Troy and Peter Carillo are marketing the property for the owners, a local partnership.

The recently upgraded Nevele comes with 40 buildings, an 18-hole golf course designed by Robert Trent Jones and Tom Fazio, swimming pools, lakes and horseback trails.

Carillo says the property can continue to be used as a resort, or it can be converted to residential use with town permission.

steve.cuozzo@nypost.com