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How Goldman narrowly missed a Hurricane Sandy disaster

November 5, 2012: 9:34 AM ET

King of Wall Street was saved by a community board.

Goldman's West Street headquarters

FORTUNE -- Goldman Sachs almost set its traders up for a direct hit from Hurricane Sandy.

About a decade ago, Goldman (GS) nearly spend $850 million to build a home for its traders on a riverfront plaza right in front of 55 Water Street. The building, which was never built, would have contained at least seven gigantic trading floors, and would have surely been flooded last week.

55 Water Street was one of the worst damaged in Hurricane Sandy. A number of lower floors were flooded. And even though Con Edison said it has returned electricity to lower Manhattan, 55 Water is one of a number of financial district office buildings still without power or heat. It's not clear when the building would be up and running again. Depository Trust and Clearing Corporation, which is a tenant in the building, said it may have lost certificates relating to trillions of dollars of stock and bond holdings, which were contained in the building's basement vault and are likely damaged.

But that could have only been half of the one-two punch Sandy might have landed on Goldman. The firm's former headquarters, 85 Broad Street, where Goldman executives were located for more than three decades, took on eight feet of water on its first floor. The current tenant of that building, investment bank and brokerage Oppenheimer & Co., has told its employees that it could be weeks before they are able to reoccupy the building. Oppenheimer has sent some employees to a branch office on Park Avenue. Many of the firm's other employees continue to work from home.

About a decade and a half ago, Goldman, feeling cramped began drawing up plans for its growing number of employees. For a while, Goldman settled on a plan to build a 240-foot-tall building on a plaza next to 55 Water. The firm also planned to take over 1.38 million square feet of office space in 55 Water that was being vacated by J.P. Morgan Chase.

In fact, it's likely a lower Manhattan community board saved Goldman from disaster. Goldman's new building would have taken over one of downtown's largest privately owned open spaces. As a result, a lower Manhattan community board voted against the plan to allow the building.

In the end, after looking on the New Jersey waterfront, which was also badly damaged, Goldman settled on its current headquarters on West Street. A good choice. The building and the immediate area around it was largely untouched in the storm. The upscale burger joint Shake Shack, which is located across a passageway from Goldman's headquarters, was serving patties on Wednesday.

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About This Author
Stephen Gandel
Stephen Gandel

Stephen Gandel has covered Wall Street and investing for over 15 years. He joins Fortune from sister publication TIME, where he was a senior business writer and lead blogger for The Curious Capitalist. He has also held positions at Money and Crain's New York Business. Stephen is a four-time winner of the Henry R. Luce Award. His work has also been recognized by the National Association of Real Estate Editors, the New York State Society of CPA and the Association of Area Business Publications. He is a graduate of Washington University, and lives in Brooklyn with his wife and two children.

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