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Capital flight

Here's our Baedeker to the surprisingly sophisticated mini-Wall Streets that have sprouted across the Hudson and north of New York City.

Here's our Baedeker to the surprisingly sophisticated mini-Wall Streets that have sprouted across the Hudson and north of New York City.

By Lois Madison Reamy
June 2002
Institutional Investor Magazine

Last September's attack on the World Trade Center forced many financial firms, from American Express Co. to Merrill Lynch & Co. to Nomura Securities International, to flee lower Manhattan. That trio has returned, to loud fanfare.

But for years other New York City-based financial enterprises have been quietly shifting some or all of their operations to the suburbs and exurbs, just as many Fortune 500 companies did in the 1960s and '70s. The upshot of this dispersion - accelerated by security concerns - is that fledgling financial centers have sprung up in Jersey City, New Jersey, Westchester County, New York, and Greenwich and Stamford, Connecticut. Wall Street is now Greater Wall Street.

No doubt some deal makers and traders regard working anywhere but Manhattan as being banished to the provinces. The delightful surprise, however, is that these brave new Wall Street outposts are actually quite civilized, with ample diversions (see story below) and first-class hotels, as well as restaurants that, according to restaurant expert Tim Zagat, come close to rivaling New York City's finest. "Any time you move thousands and thousands of upscale people into an area, you will have the restaurants," he points out. The Zagat Survey now covers 69 dining spots in the Greenwich-Stamford area; 31 in White Plains, New York; and seven in Jersey City, where the restaurant boomlet is nascent.

In fact, the amenities of these alternative-investment centers are well worth learning about, in case you ever visit one or - you never know - land a job outside of New York City proper.

Westchester County and Connecticut's Fairfield County, both north of Gotham, have been among the chief beneficiaries of firms' upward mobility. In 1996 Swiss Bank Corp.'s U.S. operations were hauled off to Stamford, lock, stocks and barrel, attracted by the countrified lifestyle and the technologically cutting-edge office space.

As if to underscore its commitment to Connecticut, the firm, now UBS Warburg, recently enlarged the size of its trading floor to 9,570 square meters - the equivalent of 37 tennis courts. Morgan Stanley, meanwhile, has bought the old Texaco corporate campus in lush Harrison in Westchester to provide a backup to its Times Square headquarters.

More Bruce Springsteen than John Cheever, Jersey City has also lately come into its own. Once the poster city for urban blight, it has lured enough financial services firms across the Hudson River to earn the nickname Wall Street West. The skyline of lower Manhattan looms just across the river. Jersey City is not, however, without its own, still-rising skyline: At 168 meters, Merrill Lynch's 42-story building is the tallest in New Jersey, and Goldman, Sachs & Co. will steal that honor when its new, 250-meter tower opens in late 2004.

"In the '80s the firms that came over were mostly back-office," says Daniel Frohwirth, director of real estate for the Jersey City Economic Development Corp. Now, he says, "in some cases, the whole company is moving here; in other cases, an entire income-producing division is coming." Some 30,000 financiers are estimated to work in Jersey City today (compared with about 27,000 in the Stamford area).

Jersey City has rehabilitated its once-dilapidated waterfront and transformed it into a flourishing financial center, with 30 buildings and lots of breathing space between them. Occupants include Datek Online Holdings Corp., Instinet Group and Credit Suisse First Boston subsidiary Pershing. Merril Lynch's Jersey City operation includes its market-maker subsidiary, Herzog Heine Geduld, and 3,000 back-office employees.

The 3.2-kilometer-long waterfront financial district centers around Exchange Place, a cluster of old commercial buildings. On the north end abandoned railroad beds have given rise to Newport Office Centers, where J.P. Morgan Chase & Co. and UBS PaineWebber do business; south of Newport is Harborside Financial Center, a six-building complex whose tenants include money management firm Lord, Abbett & Co. and, soon, Charles Schwab & Co.

Jersey City's renaissance extends west of the waterfront to the vibrant, eight-block artists' district, Waldo; to an idle romanesque powerhouse on the edge of the financial district that's slated for restoration as a cultural and commercial center; and, farther across town, to Loew's Jersey Theatre, a lavish 1929 movie palace.

Though taxis are scarce in Jersey City, you can get a good tour by catching a sleek trolley at the Pavonia/Newport stop: The eight-kilometer ride south to Liberty State Park lets you take in the city's wide streets, plazas and quays, glass- and stone-sided office buildings and red construction cranes, as well as the overgrown rail yards and vacant lots of the not-so-distant past. With a 2.1-kilometer promenade and a glorious view of Manhattan, Liberty State Park is an excellent place to jog or stroll, catch a harbor cruise or dine at the Liberty House Restaurant (described as "a view with a room").

Several other restaurants also serve Jersey City's new wave of diners. Visitors to the Newport Office Centers have Komegashi Too for sushi, the stylish Liberty Grill & River Bar and, opening this summer, Dorrian's, an Irish pub. Near Exchange Place you can hold a business lunch at the Italian-style Pronto Cena or nouvelle-American Nicco's; Iron Monkey, where the Merrill Lynch crowd gathers, is a popular spot for lunch and drinks.

Jersey City's appeal to financial services firms rests in large part on its proximity to Manhattan: 20 minutes by car via the Holland Tunnel, 22 minutes on the Path train system and seven minutes on NY Waterway ferries, which provide shuttle buses in New York( Jersey City is about 15 minutes from Newark International Airport and Teterboro Airport (for corporate jets). Sports fans can get to the Meadowlands Sports Complex in ten to 15 minutes.

On July 2 business travelers to Jersey City will get their first full-service luxury hotel with the scheduled opening of the nine-story Hyatt Regency Jersey City, at the Harborside center. Jutting like a ship into the Hudson River, the 350-room facility shares Harborside's maritime-theme architecture. The Hyatt broadens the financial district's otherwise fairly basic menu of hotels: Candlewood Suites, Courtyard by Marriott and Doubletree.

A far cry from the Jersey waterfront, Westchester and Fairfield Counties form a greenbelt bounded by Long Island Sound to the east and the verdant Hudson River valley to the west. Headquarters for a number of Fortune 500 companies, the counties provide travelers with first-rate hotels and amenities.

When Stephen Timbers, president of Chicago-based Northern Trust Global Investments, visits his firm's investment management arm in Stamford, he chooses among the Hyatt Regency Greenwich - just 0.4 kilometers from Stamford - and Stamford's Westin, Sheraton and Marriott (where guests may dine at Vuli, the highly rated revolving restaurant atop the hotel).

In addition to the large chains, Westchester and Fairfield also offer small inns, like the Castle at Tarrytown, overlooking the Hudson, and the Homestead Inn in Greenwich, which are known for their food as much as for their rooms.

Fairfield and Westchester Counties aren't as convenient to Manhattan as Jersey City is, but Metro-North Railroad commuter trains ( run regularly to Grand Central Terminal. Westchester County Airport in White Plains ranks among the nation's busiest corporate jetports.

Perhaps the most appealing thing about these new financial hubs, though, is that they're not far from New York.

Take five

With Wall Street in recession, financiers may have some rare leisure time to explore the sights, sounds and tastes of the new mini,Wall Street neighborhoods outside New York City. Here are some suggestions:

Take a hike in Hoboken. Upstream from Jersey City, New Jersey, Frank Sinatra's hometown combines an old-fashioned waterfront with a gentrified bohemia. Elysian Park, a playground in the city's north end, marks the spot where the first baseball game was played. At Leo's Grandevous restaurant, the jukebox is all Ol' Blue Eyes. Amanda's, a local favorite housed in an old brownstone, serves contemporary American dishes.

Explore the Hudson Valley. At Kykuit, John D. Rockefeller's onetime home in Tarrytown, New York, modern sculptures - including works by Alexander Calder, Jacques Lipchitz and Aristide Maillol - hobnob with classic white marbles. Nearby Philipsburg Manor offers a glimpse into New York's Dutch colonial past. (Information on both sites can be found at

See first-rate summer theater in Connecticut. Through June 22 at the Westport Country Playhouse, the stage manager role in Our Town will be played by Paul Newman. The actor and his wife, Joanne Woodward, own the theater (

Hear world-class music in Westchester County. The International Music Festival at Caramoor in Katonah, New York, kicks off June 22 with a performance by violinist Pinchas Zukerman. Caramoor, a Mediterranean-style house built by investment banker Walter Rosen in the 1930s, is now an art museum (

Go fishing. Long Island Sound abounds with striped bass and bluefish, says Jeff Northrop, owner of Westport Outfitters, which books corporate or individual fishing trips (

Tee off. At the Doral Arrowwood resort and conference center in Rye Brook, New York, you can play a nine-hole Scottish links course designed by Robert Von Hagge ( - L.M.R.