Embattled bank JPMorgan Chase, the recipient of $25 billion in TARP funds, is going ahead with a $138 million plan to buy two new luxury corporate jets and build "the premier corporate aircraft hangar on the eastern seaboard" to house them, ABC News has learned.
The financial giant's upgrade includes nearly $120 million for two Gulfstream 650 planes and $18 million for a lavish renovation of a hangar at the Westchester Airport outside New York City.
A public hearing will be held by Westchester County officials tonight regarding JPMorgan's request for new hangar space.
According to JPMorgan Chase architects, the new hangar will be built with reclaimed wood, quarry tile and even a "vegetated roof garden."
The Gulfstream 650's are described by the manufacturer as the "fastest," "widest" and "most comfortable" private jet ever with superior cabin amenities, an optional stateroom, and 12 interior designs to choose from.
"It's a remarkably boneheaded decision," said corporate watchdog Nell Minow, the editor and founder of The Corporate Library, a group that provides independent corporate governance research and analysis. "It's completely tone deaf."
Mike Dolphin, president of fixed-based operator Avitat Westchester, is fighting the bank's grand plans – because he says JPMorgan's proposed expansion would force his company out of the hangar the bank is eyeing. Westchester County, NY has recommended that the bank – a "high quality corporate citizen" – be awarded the lease to the hangar when it becomes available in April 2010, in part, because of how much money it is dedicating for the "construction of a state of the art "green building.""
"I am the little guy, so we have a bit of a David versus Goliath fight on our hands," Dolphin told ABC News. He said JPMorgan Chase's plans come at the "wrong place, wrong time" and that despite scaled back private aviation from other TARP-funded companies, JPMorgan Chase is going ahead with its plans, which, if finalized by the county, will cut his business and his staff in half.
"You wouldn't find another hangar in the airport that has anything near this," Dolphin said of the bank's proposal.
Joseph Evangelisti, a spokesman for JPMorgan Chase, said no TARP money would be used to make any payments for new jets or jet hangar improvements. He refused to comment on whether JPMorgan had put a down payment for new planes, saying only that any future jet purchases would be part of its normal aircraft replacement policy, and that JPMorgan Chase will repay all TARP money before it makes any payments for new planes or renovations.
The spokesman also said the bank would have nine years to make its $18 million in renovations, but the county told ABC News that JPMorgan Chase's plans indicate that renovations would be complete within six months of assuming the lease.
JPMorgan Chase currently has four jets at Westchester Airport, two of which would be replaced by the 650's when they arrive in 2013, Dolphin said.