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NEW YORK CITY-Goldman Sachs plans to move forward with plans for a two-million-sf base of operations on Site 26–the last commercial parcel in Battery Park City. In April, the firm said it was reconsidering those plans and hired Cushman & Wakefield to search for possible alternatives. The state has changed plans to construct a traffic tunnel on West Street that would have veered traffic in front of the site.

The project, which is estimated to cost nearly $2 billion, would be the first development of headquarters space in Lower Manhattan in 16 years. A Goldman Sachs spokesperson declined comment. Already approved is $1 billion in Liberty Bond financing to go toward development costs, but additional financing could be forthcoming. When the headquarters effort was announced nearly a year ago it included $13.4 million in sales tax exemptions. The company would also be eligible for Con Edison energy discounts worth an estimated $10.3 million and can apply for up to $25 million in Job Creation and Retention Program grant funds.

Under the original plan, Goldman Sachs would have a ground lease for the site through 2069 with the Battery Park City Authority. The site is expected to house headquarters and front office staff, including investment banking, commodities trading and related operations. At the time, the move was estimated to keep more than 9,000 jobs here with more anticipated. Goldman has 425,000-sf of space at One New York Place in Lower Manhattan that runs through September of 2009. Goldman divisions are also housed in various financial district locations as well as in Jersey City.

Earlier this summer, Carl Weisbrod, then president of the Alliance of Downtown New York Inc., said Lower Manhattan’s main challenge was to see what Goldman Sachs chose to do. He said a decision to develop in the area “reaffirm its faith in Lower Manhattan and it would be a bellwether.” And during recent REBNY member luncheon CB Richard Ellis’ Mary Ann Tighe said Goldman’s ultimate decision would have an impact on other companies exploring Lower Manhattan.

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