Industry debates response to Sept. 11.

When will the government pass an incentives package for Manhattan? How can Manhattan retain tenants? Will vacancy rates continue to climb?

These and other urgent issues were discussed by a panel of real estate executives during last week's Commercial Property News opportunity conference.

Stephen Spinola, president of the Real Estate Board of New York, moderated the panel which featured Insignia chairman Stephen Siegel, Cushman & Wakefield president of US operations Bruce Mosler, Mack Call Realty Corporation ceo Mitchell Hersh, Tishman Speyer Properties managing director Robert Speyer and W & M Properties president Anthony Malkin.

Their comments ran the gamut from cautiously hopeful to downright dreary, and once during the event--titled "New York Area Real Estate: A Region at the Crossroad"--two panelists verbally sparred over interpretations of the post-Sept. 11 market.

After being asked to gauge the effect that Sept. 11 has had on Midtown properties, Speyer responded that "two pieces of conventional wisdom have been debunked," and the volume of negative news has not been justified.

"People said that Midtown real estate would increase in value. It hasn't. And people also said that there would be a new fear of trophy buildings, which hasn't happened," said Speyer, managing director of Tishman Speyer.

Siegel took issue with Speyer's "rosy view," as Siegel called it, by informing him that unless downtown recovers, the entire city will be in trouble.

"It will pull midtown down. It's going to be worse, not better," said Siegel.

Differences aside, the panelists all agreed that an incentives package needs to be introduced as soon as possible. Bruce Mosler said that transportation is another critical issue.

"There needs to be immediate work on this. It needs to be a comprehensive plan," said Mosler.

Malkin, speaking about the incentives package, said that the real issue is demand. "You cannot push a string," said Malkin, whose comments dwelled on the Westchester and Fairfield County markets.

Another panelist with holdings outside New York City was Hersh.

"On Sept 11 we saw an immediate flurry of demand for our space in New Jersey," said Hersh. "Companies are looking at space more strategically now," he said.

Mosler said that New York City has "missed the boat" in attracting and retaining tenants downtown. "The incentives must occur, and we've got to address these issues quickly," said Mosler.

Spinola said that the incentives package--were it already in effect--could have stemmed the flow of tenants out of the city.

"Mistakes have already been made," said Spinola.

Spinola then asked the panel to describe the type of incentives that would help the most.

Mosler said that cutting costs for landlords is important, and Speyer asked the panel about where the money for an incentives package should come from.

Spinola, categorizing the way that others throughout the country perceive what occurred here, said that it is "New York's problem."

According to Malkin, the federal government gave far more money--sooner--to aid San Francisco after it suffered a huge earthquake years ago.

"We're asking for a small piece of what everyone else got," said Malkin.

The amount being asked for on Capitol Hill, according to Spinola, is $20 billion, "the magic number" that New York Sens. Hilary Clinton and Charles Schumer have been seeking.

"The importance of these incentives cannot be underestimated," said Mosler.

Security issues were discussed next, as Spinola questioned whether or not barriers on the sidewalk and closed streets are necessary as the city tries to get back to normal.

"Security is an issue everywhere. Let's not make distinctions," said Siegel, whose recent breakfast in the Metlife Building's Sky Club triggered an anecdote.

"People keep thinking that just downtown needs security. But that the MetLife building is the perfect place for a plane to hit. It could fly right up Park Avenue," he said, explaining how security is an issue throughout the city.

As for the barriers, Siegel said that they should be removed.

The final question centered on the recent announcement by federal economists that we are indeed in a recession. When would be out of it, Spinola asked the panel

Malkin said that New York City's economy should turn around by 2003. Speyer said that economists are always wrong, and noted that retail sales were actually not that bad so far this year.

"It doesn't matter what the economy does, we really need a firm plan to execute downtown," he said.

Hersh said that he has every confidence that the city will rebound, though "it will be a different form of growth."

The final word on the topic was left to Mosler, who cited consumer confidence as necessary to lead us out of this recession.

"The financial services will lead the way here. I think we will begin to see signs of a recovery by next year," he said.