The tax breaks Nasdaq gets to move its office 8 blocks (Update)

FRIDAY 5/13: When Brandywine Property Trust in 2014 renewed its decade-long quest for state and city tax breaks to lure tenants to what's now the FMC Tower site, the state agreed to the usual Keystone Opportunity Zone incentives.

Department of Community & Economic Development spokeswoman Lyndsay Kensinger listed them for us, and noted there's a condition: Tenants like Nasdaq, which is moving to FMC from 1900 Market, will enjoy tax-break fenefits if they pledge to hire at least 20% more people than the couple of hundred who worked at its previous home, by 2018. (What if they don't? The state tries to "recapture" the tax breaks):

Pennsylvania tax breaks to KOZ landlords and their tenants, like Nasdaq at FMC Tower:
   Corporate Net Income tax
   Capital Stock and Foreign Franchise tax
   Personal Income tax
   Sales and Use tax (on purchases used in the Zone)
   Bank and Trust Company Shares tax/Mutual Thrift Institution tax
   Insurance Premiums tax

Philadelphia tax breaks:
   Earned Income/Net Profits tax
   Business Gross Receipts, Business Occupancy, Business Privilege and Mercantile taxes
   Sales and Use tax (on purchases used in the Zone)
   Property tax

Kensinger says her office "won't know," and Nasdaq so far hasn't said, how many people Nasdaq will have working at the new location until it opens later this year. The state provided no estimate as to how much revenue it is losing as jobs move to the KOZ from other city locations.

TUESDAY: Nasdaq's futures and options trading and tech operation plans to move across the Schuylkill to the 49-story FMC headquarters tower in the 2900 block of Walnut St., leaving the Philadelphia Stock Exchange space at 1900 Market St., after its lease runs out next year, according to securities and real estate sources. (See also my story in Wednesday's Philadelphia Inquirer)

"I am extremely excited that America's oldest stock exchange has demonstrated its commitment to expanding its workforce in one of the country's oldest cities," confirmed Pennsylvania Gov. Tom Wolf. The tower, developed by Brandywine Realty Trust, is in a state-designated Keystone Opportunity Zone, which gives tenants tax breaks.

"The company's decision to create a new state-of-art trading floor in the new FMC Tower is a testament to the talent pool that exists in Pennsylvania and Philadelphia's commitment to innovation and technology," Wolf added. "I look forward to the opening of Nasdaq's new home as it continues to grow in the commonwealth."

The market would occupy 75,000 square feet of the 636,000 sf office section of the tower, which will also house chemical maker FMC's headquarters and University of Pennsylvania offices, plus apartments.  Developer is Brandwine Realty Trust, the dominant office landlord in three of the region's highest-rent office districts -- Center City, UCity and Radnor. Nasdaq and Brandywine didn't immediately return calls seeking comment.

The Market Street building's basement trading floor, built for the exchange in 1981, has continued at a much smaller and quieter level than in the PhilEx's heyday as an options market, before digital trading technology moved bright-jacketed traders to "upstairs" and remote locations. Nasdaq bought PHLX in 2008.

After absorbing the Pittsburgh, Miami, Washington and Baltimore exchange, the PHLX had survived since the 1980s mostly as an options-trading market, and its continued (albeit much shrunken) existence under Nasdaq is built around the independent tech unit Philadelphia continued to maintain after most options markets had contracted those services to others. More about the PHLX in its last years here.

The market was America's oldest stock market, and one of the last of the regional exchanges that once traded canal, rail, energy and local company bonds and stocks in dozens of U.S. cities.

It was previously housed at the Old City Tavern and the Merchants Exchange in Old City, the Drexel and Girard bank buildings, and in specially-built offiices and trading floors in the early 20th Century financial center around Broad and Walnut Sts. The Bourse building on Independence Mall was home to the city's commodities traders before that business migrated to Chicago in the 1890s. See Dominic Vitiello's definitive history of the PHLX here.