5 Years Later: Rebuilding? Not.

When I started this blog, I created a category called “Rebuilding” for my comments about downtown and the World Trade Center site. But on the fifth anniversary of 9/11, precious little has been rebuilt. The sum total of the accomplishments at Ground Zero are the replacement for 7 World Trade Center (a gorgeous building, but largely unoccupied); the reconstructed #1 subway tunnel (important, but largely invisible); and the WTC PATH station (which is temporary).

In a fascinating long article called “The Hole in the City,” published today in the Times, Deborah Sontag reviews all of the missteps that have gotten us to where we are today, with Ground Zero still what it was on September 12, 2001: a 16-acre hole in the ground. Several key errors have created this five-year stalemate. Most of them are directly attributable to Governor George Pataiki’s incompetence. He either made the decisions himself, or selected the key people who did:

1. Larry Silverstein. His lease with the Port Authority compelled the agency to replace the office space that was lost on 9/11. Early on, the government could have forced him out. That would have meant the loss of lease payments that total more than $100m per year. But rather than frankly admitting the trade-off, leaders kept dancing around it, hoping the issue would quietly go away. It hasn’t.
2. The Families. Early on, Pataki decided to kow-tow to the families who lost loved ones in the 9/11 attacks. Their near-veto power over the site has been a constant impediment to development. Incredibly, Pataki’s impetuous announcement that the footprints would be considered sacred (one of the 9/11 families’ highest priorities) was not cleared in advance with site planners.
3. Daniel Libeskind. Pataki hand-picked Liebeskind’s ugly site plan, overruling rebuilding officials’ preference for a rival plan. Today, most of Liebeskind’s plan has been compromised out of existence. But his continuous presence has been a constant irritant. Liebeskind had no experience with a project on this scale, and many of his ideas were wildly impractical. Years ago, Liebeskind should have been thanked for his contributions, and sent packing.
4. The Freedom Tower. This massive skyscraper, a symbolic 1,776 feet tall, was supposed to be the site’s iconic landmark. But Liebeskind put it in the wrong place, at the corner of the site that’s farthest from mass transportation, and Pataki refused to move it. The governor presided over the laying of the cornerstone on July 4, 2004. Since then, the stone has been “unlaid,” and put into storage. A costly redesign was mandated after the police department insisted the building had to conform to the security requirements of an overseas U. S. embassy. (These are the same cowards who have refused to re-open Park Row in Lower Manhattan.) It is still not clear whether the Freedom Tower will get built, as Pataki has not delivered on his promise to secure government tenants for it.
5. Culture. I thought it was a great idea to mix culture and commerce at Ground Zero. But of the four cultural tenants the rebuilding agency selected, not one was a marquis name. Pataki ejected two of the four, out of fear that they would showcase unpatriotic content. The remaining two don’t seem to have a prayer of raising the $50m required to build a Frank Gehry-designed theater on the site’s northern edge.
6. Transportation. On the transit front, there has actually been some good news. Construction is well underway for the Fulton Street Transit Center and the new South Ferry Terminal. But to accommodate the former project, almost 150 small businesses lost their leases. A temporary PATH terminal, which cost some $300 million, opened just two years after 9/11. Its permanent replacement, at a price over $2 billion, is now under construction. Developers called it a “downtown Grand Central.” But maybe it’s just wretched excess. Grand Central has 45 sets of train tracks, while the PATH station has just five. The new station will have space for an express train service to JFK airport—another Pataki priority—but there’s no assurance it will ever get built.

All over downtown, there are large banners proclaiming all the great things that will get built by 2009 or 2010. Anyone who has followed the lack of progress downtown knows the instinctive response: Don’t hold your breath.

Ground Zero Plan Breaks Down

It has been a while since I posted a commentary on the status of rebuilding at Ground Zero. This week’s collapse of negotiations between developer Larry Silverstein, the Port Authority, and Governor Pataki’s office, provides a timely backdrop for an update.

Contrary to the most dire pronouncements, there is a lot going on around Ground Zero.

• The big transportation projects are on or close to schedule, including the new Path Terminal, the Fulton Street Transit Center, and the new South Ferry terminal.
• The new 7 World Trade Center is set to open in May. It is a far classier building than the structure it replaced.
• Construction of the Memorial, Reflecting Absence, has begun.
• Demolition of the Deutsche Bank building has begun.

• Across the street from the Ground Zero, the investment firm Goldman Sachs is building a new headquarters, making them the largest and most prominent firm since the attacks to make a significant commitment to Lower Manhattan.

These projects have all had their problems, and most have taken a lot longer to materialize than the planners’ rosy forecasts led us to expect. Still, they offer evidence of real progress.

Against all of this are two huge failures. Almost 4½ years after 9/11, none of the five office buildings that are supposed to replace the original Twin Towers have started construction. And the cultural program for the site is all but dead.

It seems like forever since architect Daniel Liebeskind was selected from a group of nine finalists to supervise the overall plan for the site. Current plans, even if they are all realized, bear very little resemblance to Liebeskind’s original winning design. Indeed, the Freedom Tower, a symbolic 1,776 feet tall, is about the only recognizable idea of his that remains. Liebeskind is still the site’s nominal "master planner," whatever that means. Every once in a while, he comes out of the woodwork and makes a comment or two. What he is being paid to do is a mystery to me.

We’re in this mess because developer Larry Silverstein’s lease, which he signed just six weeks before the 9/11 attacks, requires him to replace the 10,000,000 sq. ft. of office space that was destroyed. Moreover, Silverstein is paying rent to the Port Authority, to the tune of about $120 million a year, while receiving no income from the site. Naturally, and for entirely understandable reasons, Silverstein wants to get going, so that he can start attracting tenants.

Unfortunately, there is no demand for so much office space at Ground Zero. Silverstein can’t even fill 7 World Trade Center. And what’s making it worse is that the first building in line, the Freedom Tower, is a white elephant. It’s too far from mass transit, its floor plate is too small, its design (altered to accommodate security concerns) is ugly, and commercial tenants fear it will be a terrorist target.

About the only people who are still enthusiastic about the Freedom Tower are public officials, such as Governor Pataki, who’ve invested political capital in the structure, and who view it as a symbol of resiliance and rebirth. Symbols are great, but a skyscraper that will cost $2 billion to build, and that no tenant wants to occupy, is a peculiar way to celebrate the return of commerce to Ground Zero. At the moment, only a handful of government offices have committed to occupy the Freedom Tower, and there certainly wouldn’t be enough of them to come close to filling it.

Everyone agrees that Larry Silverstein’s insurance proceeds and government sponsored Liberty Bonds won’t suffice to fund all five towers in the site plan. It might be enough to build two of out of the five. Silverstein says that rental income from the first couple of towers would provide the revenue stream to fund the rest. Others say that this is a pipe dream, especially when the Freedom Tower is so profoundly unmarketable. The planners’ great fear is that Silverstein runs out of cash in the middle of construction, defaults on his lease, and leaves most of the site vacant for years to come.

Governor Pataki had set Tuesday at midnight as the deadline for Silverstein and the Port Authority to resolve their differences over the site, with some $3.35 billion in Liberty Bonds hanging in the balance. Pataki and Mayor Bloomberg don’t want Silverstein to get the bonds until they are convinced he can really build what he’s promised. The two sides were close to an agreement whereby the Port Authority would build the Freedom Tower and one other tower on the Deutsche Bank site, and Silverstein would build the three most lucrative office towers along Church Street. The deal broke down over how to allocate the costs. The Port Authority said that the parties were about $1 billion apart, which needless to say is a significant figure.

The site’s cultural program is in even more of a shambles. Liebeskind’s site plan called for two buildings that would be devoted to cultural institutions. After a lengthy selection process, the Lower Manhattan Development Corporation selected four institutions: the Freedom Center, the Drawing Center, the Joyce Dance Center, and the Signature Theater. In an embarrassing reversal, the Freedom Center and the Drawing Center were booted out, because it was feared their programming would clash with the site’s patriotic zeitgeist. The LMDC has committed $10 million to find the Drawing Center another home downtown. The Freedom Center, which never existed except on paper, closed up shop for good. The Joyce and Signature companies remain nominally committed to the site, but there doesn’t seem to be a penny of funding for the Frank Gehry-designed theater they would occupy. If the theater manages to get built, one wonders if the programming would come under the same kind of narrow-minded pressure that eventually forced out the Drawing Center and Freedom Center.

The solutions to these problems are far from clear. The Freedom Tower—so symbolic, but so impractical—seems to be a colossal mistake. Yet, erasing it from the site plan would be a huge political embarrassment, especially for Gov. Pataki, whose long-shot presidential ambitions could be damaged if there is no visible progress by the time he leaves office next January. All of the parties seem to be boxed in by legal and/or moral commitments they’ve made to a site plan that increasingly makes little to no economic sense. The right answer, which no one wants to hear, is to send the original architect, Daniel Liebeskind, on his way, and re-think the whole mess.

A Final Trip to Bedrock for 9/11 Families

On Saturday, relatives of 9/11 victims had the chance to descend to the bedrock at Ground Zero, as they’ve done very year for the last three, knowing — as the Daily News put it — that “the descent to the hallowed ground may be their last.”

The reason is that, by this time next year, construction of the Freedom Tower, the new PATH terminal, and the memorial are expected to be well underway, meaning that “unfettered access to bedrock is unlikely to exist again.”

Not all of the 9/11 families are happy about this:

Michelle Stabile, 43, said the thought of construction equipment covering up the bedrock is painful.

“It’s discouraging to see the construction going on around the site. It’s disturbing,” said Stabile, who lost fiancé Frank Koestner. “And personally I would have rather they left the [site open].”

Far be it from me to dictate how somebody else should process their grief, but this is not a realistic point of view. Anybody who’s visited the site can see that a 14-acre hole in the ground can’t simply be left as a permanent gash in the streetscape. There needs to be an appropriate balance between recognizing their loss, and rebuilding what we lost. Those 9/11 families who fail to understand this balance do not offer much help in this ongoing debate.

Church Street Post Office Reopens

The 67-year-old post office at 90 Church Street — across the street from Ground Zero — reopened today for the first time since September 11, 2001. On the outside, the building had no obvious damage, but the insides were contaminated with 9/11 pixie dust. The facility had to be almost entirely gutted, and most of the windows replaced.

The building is still girthed in scaffolding, which I hope will come down soon, but as of this morning it was open for business once again. I was one of its last users before the terrorist attacks, having stopped there to mail a package early that morning.

Any return to normalcy is to be welcomed, but I have particularly selfish reasons for welcoming back the Church Street post office, because it’s on my route to work every morning. For the last three years, I’ve had to go well out of my way to buy stamps or get an overweight package mailed. From now on, I’ll be back home at Church Street.

Update: If you never thought a building from the 1930s could look and smell brand-spanking-new, then visit the post office at 90 Church Street. I spoke to one of the employees about it. They love the fresh paint and bright lighting. And all of the self-service kiosks actually have pens that write! (I wonder how long that’ll last.)

Downtown JFK Rail Link Gets a Boost

The White House has agreed to recommend that $2 billion in post-9/11 Federal aid be converted to a direct grant that would help fund a rail link between JFK airport and Lower Manhattan. The funds had previously been allocated to the Liberty Bond program. Congress must still approve the shift, but with White House backing approval seems likely.

It’s thought that the rail link would cost at least $6.0 billion. The MTA has allocated $400 million for the link in its next capital program, and the Port Authority says it will contribute about $560 million. That means Gov. Pataki, who strongly backs the rail link, still neads to find about another $3.0 billion — and that assumes the initial cost estimates are accurate. (The $6.0 billion figure seems low to me.)

Another $500 million could come from canceling the unpopular West Street tunnel, which at almost $700 million is surely the most wasteful of the Lower Manhattan rebuilding projects. West Street could be widened to eight lanes at-grade for just $175 million, freeing the surplus for much worthier projects.

The Tunnel to Nowhere

Of all the rebuilding projects proposed for Lower Manhattan, perhaps none has generated so little enthusiasm as the West Street tunnel. The New York State Department of Transportation — backed by Governor Pataki, but hardly anyone else — proposes to build a four-lane tunnel along West Street, between Vesey and Albany Streets, leaving four lanes at ground level.

The origins of the project can be found in the early design concepts for the World Trade Center site, dating from the summer of 2002. Although widely derided as uninspired, one idea from these first designs caught the public’s imagination: turning West Street into a tree-lined promenade resembling Paris’s Champs-Elysée. For that to be possible, much of the traffic along the highway would need to be routed underground.

As first conceived, the promenade would have run from Chambers Street all the way down to the Battery. But as the staggering costs of such a long tunnel became apparent, it was shortened into what is now the present proposal: a tunnel that runs for just a bit more than the length of the World Trade Center site. The purported aim is to reduce the amount of at-grade traffic adjacent to the memorial, but there would still be four lanes at ground level to allow access to local streets. The project would cost $860 million, and would tie up the West Side Highway for years, blocking both pedestrian and vehicular access to Battery Park City.

A group called Taxpayers for Common Sense has cited the West Street tunnel as one of the 27 most wasteful highway projects in America. That’s because the alternative — widening West Street to eight lanes at-grade — could be done for just $175 million. The savings of almost $700 million could be appropriated for the downtown JFK rail link, a far worthier project that is as yet unfunded, and has considerably more community support.

Neither of the tunnel’s alleged benefits makes much sense. The first is to provide an “appropriate and respectful” setting for the memorial, but as there would still be four lanes at ground level, I hardly see how this would be achieved. The other is to provide better pedestrian access to the memorial, but this could be done with bridges passing over the roadway, as was the case before 9/11. In addition, a pedestrian tunnel below West Street is already part of the WTC site plan. All in all, pedestrians will have plenty of safe routes to cross West Street without the need for any tunnel.

The tunnel has plenty of commuity opposition. Rep. Jerrold Nadler, Sen. Charles Schumer, New York City Council Member Alan J. Gerson, New York State Assemblymembers Sheldon Silver and Deborah Glick, New York State Senator Martin Connor, Manhattan Borough President C. Virginia Fields, Community Board #1, the American Automobile Association of New York, the Civic Alliance to Rebuild Downtown, the Regional Plan Association, the Coalition to Save West Street, NYPIRG-Straphangers, and the Tri-State Transportation Campaign (TSTC), are among those opposing or seriously questioning it.

According to the TSTC, at a recent public hearing there were 31 speakers, and all but one opposed the project. (The speaker in favor represented a coalition of construction workers.)

Our elected officials have generally made good decisions about the rebuilding process, but this project is a turkey.

Bloomie Froze NYCO out of Ground Zero

According to today’s Times, the Bloomberg Administration was pivotal in freezing the New York City Opera out of the cultural equation at Ground Zero.

Long unhappy with its current home at the New York State Theater, the NYCO had lobbied hard to be part of the site plan at Ground Zero. The Opera was thought to have the inside track, long before the LMDC issued an invitation to cultural institutions that eventually drew some 115 responses.

But if the NYCO moved out of Lincoln Center, the State Theater, which the city owns, would be without a tenant for the 22 weeks a year that the opera performs and rehearses there. That’s a budget hole that Bloomie would rather not have to fill.

To be sure, there were other objections to the Opera’s downtown plans, including the fact that most of the rebuilding officials simply aren’t opera fans, and therefore don’t see much merit in an opera house. But the Mayor’s influence seems to have been pivotal, especially as Governor Pataki didn’t seem to have strong feelings one way or the other.

The NYCO went so far as to hire noted architect Rafael Viñoly to design an Opera House that would fit the peculiar geometry that the Liebeskind site plan imposes. The main performance space would actually have been cantilevered over the sidewalk, with space in the building for a smaller stage, a restaurant, and even a movie theater. It was all for naught, and the NYCO now finds itself with nowhere to go. Staying where they are remains an option, but the Opera has been largely ignored in the Lincoln Center redevelopment plans, since everyone assumed they were moving.

The Times included a conceptual drawing of the Opera House we could have had. I’m sure the NYCO still hopes to erect it … somewhere.

Culture at the WTC

Daniel Liebeskind’s site plan for the World Trade Center includes placeholders for two cultural buildings. On Thursday, we finally found out what will go inside. The LMDC’s bake-off of 115 candidates concluded with four cultural institutions chosen:

• The Joyce International Center for Dance, which would build a 900-1000 seat theater for a rotating series of international dance companies. The Joyce has smaller spaces in SoHo and Chelsea, which it would keep.
• The Signature Theater, which would build three theaters of 99, 299, and 499 seats. Known for presenting seasons dedicated to a single playwright, the Signature would offer up to seven world premieres a year, and would also share the space with the TriBeCa Film Festival.
• The Drawing Center, which would offer exhibits of international artists and also provide community education programs. It would move from its current home in SoHo to the WTC site.
• The Freedom Center, the only one of the four that doesn’t currently exist anywhere, which would offer programs that “symbolize the indomitable spirit of the people of this land, the indomitable spirit of people from other lands, of the people of this city who may have been down but certainly not out.”

The New York City Opera, once considered the favorite to anchor the WTC’s cultural center, finds itself on the outside looking in. LMDC chairman John Whitehead had strongly pushed the opera, which he believed would be better able to attract the high-profile donations needed to fund the cultural buildings and the memorial. But the NYCO needed a 2,200-seat theater, and many doubted whether such a big space could be filled during the many months of the year when the opera isn’t in season. Rebuilding officials also questioned whether the opera was a logical fit for the kind of tourist traffic the site is likely to attract.

Although I’m an opera fan, I have to admit that the Joyce-Signature proposal is a more compelling use for the limited space. The four proposed theaters, ranging from 99 to 1000 seats, will create a new cultural center rivaling Lincoln Center, and I have to agree that it will be a lot easier to keep these theaters bustling all year round. The NYCO’s 2,200-seat opera house would have been dark more often than not.

I know little about the Drawing Center, but it sounds promising. The proposed Freedom Center makes me yawn. The last thing we need is pompous assurances of the value of freedom, particularly as the memorial planned for the site is likely to make much the same point. Perhaps the Center’s blue-ribbon sponsors can persuade me, but for now it sounds like an underwhelming concept.

The NYCO still wants to get out of Lincoln Center. Whitehead and City Councilmember Alan Gerson have pledged to find another home downtown, but I’m hard pressed to imagine where it could be. Lots that could accommodate a big-box opera house aren’t exactly plentiful, and the City Opera needs a magnate location — something that’s even more scarce.

In the meantime, the four selected cultural institutions have a tough road ahead. The two cultural buildings will cost hundreds of millions to construct, of which only a token sum will be available from the LMDC. None of the four has any track record of fundraising on this scale. Several prominent community business leaders have already turned down the job of fundraiser-in-chief. A six-month “feasibility study” is to be launched next month. Now it gets interesting!

Miracle on John Street

"Miracle on John Street." It's not quite good enough to be a movie title, but I felt blessed last week when my rent renewal arrived, and there is no increase!

When I moved in almost five years ago, my rent was exactly $2000, which for those not au fait with rent stabliization law in New York City, is the lowest rent level that is not regulated. That is, the landlord can charge whatever the traffic will bear. A year later, it went up by 5%. Ok, I could live with that. Another year later, they hit me with a stiffer 12.4% increase. This was right at my pain threshold, but as there was no assurance of getting a better deal anywhere else, I stayed put.

Then 9/11 hit. In the immediate aftermath, the landlord volunteered a 10% rent cut. Residents were bailing out of Lower Manhattan in droves, and while tenants theoretically could be sued, there wasn't a jury on earth that would side with a landlord under such circumstances. Rather than be stuck with apartments they couldn't fill, landlords offered concessions and hoped the tenants would stick it out. Most did.

In the meantime, Congress appropriated funds for a Lower Manhattan Residential Grant program. Tenants in my part of town - below Chambers Street, and east of Broadway - were eligible for a $250per month subsidy if they committed to the area for two years. (Had I lived west of Broadway, the subsidy would have been $500/month.) At my next renewal, the landlord raised the rent by 7.5%, which if you're keeping track is still about $76/month less than pre-9/11 levels. With the HUD subsidy, my effective rent was $2034/month for two years, starting August 1, 2002.

As last weekend approached, I was bracing for the worst, knowing it was about the time of year when my rent renewal would be coming. Not only I about to lose my HUD subsidy, but the landlord would have the first chance in two years to raise my rent. If a May 30 New York Times article can be believed, vacancy rates downtown are just 5%, which (if true) would suggest that any post-9/11 reluctance to live in Lower Manhattan has largely evaporated. In short, I was convinced I was in for a very significant increase.

Well, it didn't happen. My HUD subsidy will of course expire in August, but my base rent will be the same for the third year in a row. What happened? For me, the HUD subsidy was a happy dividend of living downtown, but I intended to stay no matter what. I suspect, however, that there were many who moved in only for the subsidy, and for whom the rents were just barely affordable. Those leases are now expiring, and the residents are most likely headed elsewhere. With their apartments now coming on the market in large numbers, I would guess the time wasn't ripe for jacking up downtown rents.

I don't expect this to last forever. But with several big residential buildings coming on-line in my neighborhood over the next year, thanks to the Liberty Bonds program (another post-9/11 helping of pork from Congress), a healthy supply of new market-rate units should act as a drag on rents for the next year or two. Or so I hope!

Port Authority Confronts Silverstein

The New York Post reports that the Port Authority has asked WTC developer Larry Silverstein to explain how he expects to pay his share of rebuilding costs. Now that Silverstein has lost a lawsuit against most of his insurers, the most he could receive is $4.6 billion, and it could be as little as $3.5 billion depending on how the remaining court battles play out (and he has lost all of them so far). That's a far cry from the $7.0 billion Silverstein would have received, had he persuaded a jury that the 9/11 attacks counted as two separate occurrences.

Now, $4.6 billion isn't exactly chump change, but Silverstein has already blown $1.48 billion of it on legal fees, mortgage payments, and his $120 million-a-year lease with the Port Authority. It's estimated he'd owe another $630 million on lease payments before the 1,776-foot Freedom Tower, on which he's breaking ground this summer, could start generating income.

Silverstein estimates it will cost $1.6 billion to build the Freedom Tower, but the Port Authority believes he also owes a contribution to the sub-grade infrastructure, which could run to another billion. Add it all up, and it's more money than Silverstein is known to have. Banks are unlikely to lend Silverstein any more money when the Freedom Tower as yet has no principal tenant.

The bet here is that the Port Authority will have to find a way to buy Silverstein out of his lease.