A decision by Morgan Stanley Group Inc. to keep its U.S. corporate headquarters in New York City is expected to save 4,100 city jobs and generate $911 million in city and state taxes over the next 10 years, the city and New York State said yesterday.

The move also should save Morgan Stanley, a co-manager in the city's underwriting syndicate, $39.6 million in net present-value savings in the same period, New York City Mayor David N. Dinkins and Gov. Mario M. Cuomo said in a press release announcing that the firm would stay.

They also announced plans to freeze corporate tax rates for four years to improve the business climate. Currently, these taxes are estimated at 5.5% of projected fiscal 1993 revenue, totaling about $912 million. Information was unavailable on how the freeze might affect projects, a spokeswoman for the mayor said.

Before the pact, Morgan Stanley had been expected to move to Stamford, Conn. But now it will keep the one million square feet of office space it maintains at three midtown Manhattan locations, as well as the Brooklyn office space where the firm's operations department and data center have been located since 1985.

"Make no mistake about it, Morgan Stanley was very serious in its consideration of moving to land in Connecticut -- so much so that they acquired an option on a strategic building site there and developed detailed architectural plans for a headquarters building," Dinkins said in the release.

In late 1990, Morgan Stanley acquired an option on land in Stamford to build a 1.3 million square foot headquarters. The company has spent about two years investigating whether it should leave New York and the city's high corporate taxes.

The $39.6% million incentive package offered to Morgan Stanley comprises $21.4 million in real estate-related tax incentives and $18.2 million in exemptions on sales tax for leasehold improvements and machinery and equipment used to improve occupied space. Morgan Stanley's current lease had been set to expire in 1998, according to an article in The Wall Street Journal yesterday.

A spokeswoman for Dinkins could not confirm the account.

New York City carries the brunt of the tax incentive plan, offering up all of the real estate-related incentives and one-half of the sales tax exemptions.

Enticing Morgan Stanley to remain in New York City provides an important psychological boost for the city, recently named by "Fortune" magazine as one of the nation's best cities for business.

The firm serves as one of the co-managers of New York City's underwriting syndicate and is also a member of the New York City Municipal Water Finance Authority's underwriting team.

The firm was ranked eighth among top municipal underwriters for the first nine months of 1992, when credit is given only to the lead manager, according to Securities Data Co. During that period, the firm served as senior manager of 69 issues totaling $6.55 billion.

For all of 1991, the firm ranked ninth among senior managers.

The firm also is ranked ninth among the top lead underwriters of offerings in New York State of the first nine months of 1992. Morgan ranked 10th as senior manager for all of 1991 in underwriting issues in the state.

As a co-manager of offerings in New York, the firm was ranked eighth for the first nine months of 1992. In 1991, the firm ranked 11th. The firm participated in 33 underwritings totaling $7.96 billion for the first three quarters of 1992, and in 35 underwritings totaling $9.79 billion in 1991.

The Morgan Stanley deal follows other efforts by New York City to keep a major financial services firm from leaving.

Earlier this year, city and state officials unveiled a $106.2 million deal to keep Prudential Securities' headquarters in Manhattan for the next 20 years. The Prudential pact is expected to generate $830 million in tax revenues over the life of the agreement.

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