Weighing options for rebuilding downtown.
As a government-backed incentives package takes shape, downtown landlords face a challenge. Scores of displaced trade center tenants have relocated elsewhere and many of those who remain are considering doing the same.
But some firms are signing leases downtown--PKF, an accounting firm, recently signed a lease for 20,000 SF at 29 Broadway. Also, the Securities and Exchange Commission, which previously rented space at 7 world Trade Center, has leased 140,000 SF at the Woolworth Building Woolworth Building
in New York City; erected by Frank Woolworth in 1913; tallest building until Empire State Building (1930-1931). [Architecture: NCE, 3004]
See : Tallness .
So what is needed to retain tenants and lure new ones into the area?
The solution thus far has focused on incentive packages and tax abatements, all of which are engineered by the government. Some have suggested that the real estate industry should lower rents.
"Voluntary rent reductions are always a mistake. The market never lies. If there is a lot of vacant space down there, rents will fall," said Peter Pattison, a real estate consultant.
He questioned whether saving $2 a SF on office space would even be enough to compel some firms to rent space here anyway.
"Making funds available for capital expenditures is a better way for the government to help," said Pattison, who pointed out that that firms spend a great deal of money outfitting their new space.
Ten years ago, commercial landlords cut rents sharply, which allowed some tenants to remain in Manhattan. The reduction also lured new tenants who were previously barred from the high-rent market. Midtown mid·town
A central portion of a city, between uptown and downtown.
US & Canad the centre of a town office space dropped from $50 to $30 a SF quickly during that span.
Yet last year, midtown rents rose nearly 30 percent. This alone was enough to drive many tenants across the Hudson River Hudson River
River, New York, U.S. Originating in the Adirondack Mountains and flowing for about 315 mi (507 km) to New York City, it was named for Henry Hudson, who explored it in 1609. Dutch settlement of the Hudson valley began in 1629. , where rents were--and remain--substantially lower.
New York's senators have been piecing together an incentives package for lower Manhattan Lower Manhattan is the southernmost part of the island of Manhattan, the main island and center of business and government of the City of New York. Lower Manhattan is generally defined as the area delineated on the north by Chambers Street, on the west by the Hudson River (North businesses, but they have yet to announce the specifics. Clearly, their help is crucial to the area, and an incentives package needs to be enacted as soon as possible.
Beyond the government's efforts, the dismal economic outlook could effectively lower commercial rents throughout the city.
"Rents will come down because of market conditions. Landlords won't lower them out of a sense of civic duty," said Rick Salomon Rick Salomon (born 24 January 1968 in Neptune, New Jersey) is best known for his relationships with various female celebrities, including Shannen Doherty, Paris Hilton, and Pamela Anderson. Biography
The son of a former executive vice president at Warner Bros. , partner at Manhattan-based law firm Salans.
It happened ten years ago, so there's good reason to believe it will happen again."
"When push comes to shove, if you can save companies some money it definitely attracts tenants," said Brian Siegal, senior broker from the NAI See Network Associates. Lawrence Group.
He compared the REAP Program in Long Island City to what is likely to happen downtown. REAP credits firms that move into areas like Long Island City by giving each employee a grant.
Prior to Sept. 11, such a program directed at lower Manhattan was unthinkable.
"We certainly hope that the incentives package passes soon, so more tenants don't flee," said Siegal.
Another source stressed that land lords--in this market--must be "aggressive."
"They have to be intelligent, and that means responding to the economy," said Bruce Weissberg, president of real estate brokerage DG Hart.
Sens. Charles Schumer and Hillary Clinton have said publicly that their plan would provide $2 to $5 billion in incentives.
"Everyone says that downtown is going to need a shot in the arm; otherwise, it's not going to recover," said Schumer in a recent New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times article.
On a smaller scale, several small businesses downtown have received grants from the Manhattan borough president's office. A total of $30,000 was awarded to 28 businesses in lower Manhattan to help them recover from the Sept. 11 attacks.
"Many businesses, particularly small businesses, have suffered incalculable in·cal·cu·la·ble
a. Impossible to calculate: a mass of incalculable figures.
b. Too great to be calculated or reckoned: incalculable wealth. losses since the terrorist attack. That is why I believe it is imperative that we help them in this slow but steady recovery effort," skid Manhattan borough president Borough President (informally BP, or Beep in slang) is an elective office in each of the five boroughs of New York City.
The offices of borough president were created in 1898 with the formation of the City of Greater New York. C. Virginia Fields C. Virginia Fields is the former Borough President of Manhattan, elected in 1997 and reelected in 2001. Her term expired in January 2006.
C. (Clara) Virginia Fields was born in Birmingham, Alabama circa 1946 and received her B.A. .
The Small Business Recovery Grant Fund was created in early October. The grants that each business received ranged from $800 to $1,500.
The New York Times reported last week that over half of the small business applications or federal disaster loans have bees rejected. But the article also pointed out that few business owners have applied for disaster relief.
One explanation for the weak show of interest in loans is that some business owners are concerned about business prospects in the area near Ground Zero. These owners may be considering a move away from this neighborhood.
The United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Small Business Administration is, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the article, "all but begging for applicants. So far, the SBA SBA
Small Business Administration
Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government has approved 844 applications worth $80 million in disaster assistance."
On a larger scale, until New York's senators submit their final package to Congress, the downtown waiting game will continue.