JP Morgan to Build 40-storey Tower at Ground Zero

JP Morgan Chase is to invest $2bn (£1bn) in building a 40-story tower on the edge of the World Trade Center site, a significant boost to efforts by the city and state of New York and the federal authorities to lure the financial industry back to lower Manhattan.

Presently based in midtown, the investment bank said its skyscraper would open in 2012 on the site of the former Deutsche Bank building; it was severely damaged in the terrorist attacks of September 11, 2001, but is still in the process of being dismantled.

New York's mayor, Michael Bloomberg, told a press conference that the decision was a "tremendous vote of confidence" in the future of the city's traditional financial district.

"This is the largest and, I'm confident, far from the last, private-sector company to decide to make its future at the World Trade Center site," said Mr Bloomberg.

Federal and local government cash is on offer to attract firms to the Ground Zero area, which was deserted by many businesses after the terrorist strikes. Some reports yesterday suggested that JP Morgan was getting tax breaks, cheap electricity and rent subsidies worth $100m (£50m) to move 7,000 staff to the site.

JP Morgan Chase's commitment to 1.3m sq ft of office space eclipses previous deals to attract tenants elsewhere. ABN Amro, the Dutch bank, is to take 140,000 sq ft at 7 World Trade Center on the corner of Ground Zero, while the ratings agency Moody's is taking 589,000 sq ft.

The centerpiece of the development will be the Freedom Tower, with 2.6m sq ft of office space, at the north-west corner of the 16-acre site, rising a symbolic 1,776 ft , thus recalling the year America's declaration of independence was signed.

However, the project, started in April last year, has been beset by disagreements and by a lukewarm reception among potential tenants, some of whom fear it could become a fresh target.