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NEW YORK CITY-A week after word hit the street that a search is under way for a spot to build a second trading floor for the New York Stock Exchange, the exchange’s chairman, Richard Grasso, yesterday revealed that negotiations for a new Downtown facility are officially kaput.

An NYSE spokesman detailed the decision for GlobeSt.com, saying that in light of the city’s Sept. 11-induced decision to back down on its original deal with the exchange, plans for a new Downtown trading floor have been scrapped. The arrangement had included a $1 billion subsidy for a trading floor topped by a 900-foot office tower at 23 Wall St., across the street from the NYSE’s current headquarters.

Financial constraints and the current lack of enthusiasm for tall buildings put the $1.6-billion deal on shaky ground, the spokesman said. Talks bogged down earlier this year when Grasso nixed the office tower and Mayor Bloomberg asked the exchange to double its financial commitment to the project. Yesterday, Grasso pulled the plug on the entire deal.

That plan received considerable criticism from advocacy groups across the city since it first came to light. Opponents said too little public input and too much closed-door negotiating made the process suspect. In addition, many questioned the need for a new trading floor and protested the amount of the subsidy. Among the plan’s most vocal critics is Bettina Damiani, project director for watchdog group Good Jobs New York. “If, indeed, the deal has fallen apart because the Bloomberg administration has not budged on their last offer, then kudos to the mayor,” she tells GlobeSt.com.

But while the Downtown plan has been abandoned, a second trading floor is apparently a go, according to the spokesman, who says the exchange is committed to an “active/active” setup, in which physical trading occurs simultaneously in two locations.

No site has been selected and all five boroughs and Westchester are said to be in the running. The NYSE’s Downtown headquarters will remain in place, the spokesman notes.

Taking the second trading floor out of Lower Manhattan would benefit the exchange by virtue of the fact that it would run off of a separate power grid. Should power be disrupted in either location, trading would continue uninterrupted.

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