NYSE, City almost agree on proposed new location.

The New York Stock Exchange and the city's Economic Development Corporation have signed a letter of intent to build a new 10-story trading complex and office tower. Under terms of the. agreement, the project would receive more than $600 million in subsidies and could make the city the first developer in years to build a speculative office building.

"The letter of intent provides the framework for the documents related to the project to move forward," said Janel Patterson, an EDC spokeswoman. "There are parts that are legally binding."

The city has agreed to acquire the site from Rockrose Development Corp., which owns the apartment building at 45 Wall Street, and J. P. Morgan, which owns the rest of the block, by June 30. The city has also agreed to have the complex and office tower completed by 2005, according to published reports.

Although she was reluctant to discuss specific details contained in the letter, Patterson said there are some details, such as cost reimbursements, specifying what would happen if the stock exchange or the city backed out of the agreement.

"This is a precursor to a contract," she said. "We're still working out the details."

Although they don't carry the same legal weight a contract would, letters of intent are commonly used, oftern to convince a lender of a project's viability. With the stock exchange, the city is hoping the letter of intent it will provide some much-needed credibility to a project that has come under increasing scrutiny in the past two years, since the exchange threatened to move to New Jersey if it couldn't expand.

As it is currently proposed, the new trading facilities will be located across the street from the current NYSE building. The project calls for construction of a 50,000-square-foot trading floor to accommodate present trading operations and a second trading floor to meet future expansion needs. It also includes the construction of a 1.3 million-square foot office tower on top of the trading facilities. The NYSE's administrative and executive offices will remain in their present location with the newly constructed Class A office space to be leased to private commercial tenants, project officials said.

The project site is the entire 78,150-square-foot block bounded by Wall, Broad, and William Streets and Exchange Place. Four office buildings on the block are being vacated. The fifth building at 45 Wall St. is a former office building that was converted to rental apartments. All five of the existing structures on the site will be demolished except the facade and mansard roof of the J.P. Morgan building at 23 Wall St., which is listed on the State and National Registers of Historic Places and is a New York City Landmark.

The city and state have agreed to provide $480 million in cash for the trading complex and another $160 million in tax breaks. City officials are hoping that rent collected from the office tower will offset the cost of site acquisition for the project, but have had little success in attracting a tenant for the office space. The project has been criticized over the past two years, with some questioning the need for an expansive trading floor with electronic networks gaining in popularity. At least one potential developer of the project decided the risk was too great to pursue it.

In addition to finalizing details of the letter of intent, the EDC is pursuing other details related to the project. Patterson said the city has reached an agreement with Rockrose Development Corp. and is continuing negotiations with J.P. Morgan. The Empire State Development Corporation is expected to review an environmental impact statement done for the project and Gov. George Pataki recently signed legislation permitting the New York Industrial Development Agency to issue bonds on the project. The legislation will allow the city to back the bonds, rather than the developer of the project, which normally backs the bonds.

"The process is moving forward," she said.