Date: Fri, 9 Mar 2007 16:02:34 -0500 (EST) From: Louis Epstein Subject: WTC Rebuilding #509:Competitors knock FT,Others Knock Memorial Various things have been percolating since I last wrote... even as Spitzer waved ahead the construction of the Fraud'em Tower, he was saying he wasn't so sure about the way Bloomberg wanted the names jumbled on the memorial...but it didn't take long for him to wimp out on that challenge... http://nypost.com/seven/02232007/news/regionalnews/eliot_backtracks_on_wtc_wall_of_honor_shock_regionalnews_tom_topousis_and_fredric_u__dicker.htm (the story also notes that the PA "ruled out any major design changes" to the FT). Memorialists are out to press Spitzer nonetheless, and traffic at his official mailto form http://161.11.121.121/govemail ought to take note of OUR concerns as well as theirs! The Daily News printed a letter on meml names from Deirdre Shanahan Harvey,who I remember being on line with me at the very first public hearing in 2002: http://www.nydailynews.com/02-26-2007/news/ideas_opinions/story/500740p-422257c.html We may not share her priorities,but certainly concur on the issue of rethinking and correcting mistakes! Cecil Shepherd forwarded a Bloomberg News article on the "Continuing Committee" (of competing real estate operators) campaign against the FT plan...again,their objections are not our objections. ---------- Forwarded message ---------- Date: Wed, 28 Feb 2007 21:38:59 +0000 From: Cecil A. Shepherd To: Louis Epstein >From Bloomberg News... If Durst Is Right, Freedom Tower May Be Boondoggle (Update4) 2007-02-28 13:50 (New York) (Adds World Trade Center's square footage in 10th paragraph.) By Bob Ivry and David M. Levitt Feb. 28 (Bloomberg) -- New York City's $2.88 billion FreedomTower may be a financial disaster in the making. That's the opinion of a handful of Manhattan's best-known real estate executives now that the 2.6 million-square-foot office skyscraper has been approved to replace the World Trade Center. By the time the 90-story landmark is scheduled to open in 2012, about40 percent of the space will be leased at a rate that won't cover construction costs. ``The Freedom Tower isn't economically feasible under the present circumstances,'' said Douglas Durst, a third-generation New York developer whose company is building Bank of America Corp.'s new offices in midtown Manhattan. The symbol of the city's recovery from the terrorist attacks of Sept. 11, 2001, was supposed to be former New York Governor George Pataki's legacy. Eliot Spitzer, his successor, is supporting development of the 16-acre Ground Zero site, which is owned by the Port Authority of New York and New Jersey and overseen by Spitzer and New Jersey Governor Jon Corzine. Durst and Anthony Malkin, who owns the Empire State Building,have formed the Continuing Committee for a Reasonable World Trade Center to pressure the Port Authority to change the design of theFreedom Tower to make it more desirable to renters from theprivate sector. Penn Station ``Competitive products will be coming on the market at thesame time,'' said Malkin, president of Wien & Malkin, a New York-based real estate investment firm started by his grandfather.``They'll be able to get higher rents right across the street.'' Three office buildings are scheduled to open at the World Trade Center site at about the same time as the Freedom Tower,with a combined 6.2 million square feet of office space. Two of the three buildings will offer open plans that financial services firms favor for trading floors. The Port Authority's development won't. Just north of Ground Zero, Goldman Sachs Group Inc., Wall Street's most profitable firm, is building its new 1.9 million square foot headquarters. In midtown, Steven Roth's Vornado Realty Trust is planning another 2 million square feet of office space across the street from Pennsylvania Station to open in 2011 or 2012. It will include space for trading floors. Bank of America's new building at Sixth Avenue and 42nd Street, built by Durst Organization Inc., will add 2.1 million square feet in 2008 and 11 Times Square, scheduled to open in 2009, will offer 1 million square feet. That brings the total of new Manhattan office space coming on the market from 2008 to 2013 to at least 15.8 million square feet. The World Trade Center's twin towers had 9 million square feet. Tenant Commitments Brookfield Properties Corp. and Boston Properties Inc. are also planning to build office skyscrapers in Manhattan. The Freedom Tower has tenant commitments from federal and state government agencies for about 40 percent of the building.The U.S. Customs unit of the Department of Homeland Securityagreed to take 645,000 square feet and New York state's Office of General Services will lease 412,000 square feet, with an option for an additional 600,000 square feet.     Those tenants will pay $59 a square foot. At a cost of $1,100 a square foot, the Freedom Tower would have to command rents between $70 and $80 a square foot to yield a 5 percent return,said Barry Gosin, chief executive officer of Newmark Knight Frank,the third-largest real estate brokerage in New York City. For a 7 percent to 8 percent return, ``which isn't unreasonable for aninvestment of that size and risk,'' the tower's landlord wouldneed to charge an average of $100 per square foot, he said. `Hard to Justify' At 7 World Trade Center, which opened last year with 1.7 million square feet of office space just to the north of theFreedom Tower, landlord Larry Silverstein is asking $65 to $80 asquare foot, according to Silverstein's Web site. ``The tower is hard to justify on an economic basis,'' Gosin said. ``From New York City's perspective, why do the economics of the building matter? At the end of the day, it will be good forthe city.'' After the Sept. 11 attacks flattened the World Trade Center,Pataki coined the name Freedom Tower for its replacement, to bebuilt next to a memorial at the twin towers footprints. Ten months after a July 4, 2004, cornerstone-laying ceremony, Pataki responded to the security concerns of New York City Police Commissioner Raymond Kelly by ordering a complete reworking of the design by architects David Childs and Daniel Libeskind. Spitzer's Reversal Childs's new design includes a 187-foot concrete base, to besheathed in glass prisms, that some have derided as being too bunker-like. The New York Post, in a front-page headline, labeled it ``Fort Zero.'' The project is essential ``to making sure that this remains the financial center of the country and the world,'' New York City Mayor Michael Bloomberg said at a Feb. 20 press conference. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP. Spitzer was against the development during last year'ssuccessful gubernatorial campaign when he called the economic prospects for the office building ``very much in doubt.'' Last week, he supported the project. ``This should not be interpreted to mean this is the project I would have designed at its initiation,'' Spitzer said at thepress conference with Bloomberg and Corzine. ``But where we aretoday, this is clearly the best and the wisest alternative.'' Rail Network Spitzer's change of heart was influenced by investors whoexpressed an interest in buying the Freedom Tower, said JenniferGivner, a Spitzer spokeswoman. ``Private investors and their interest have given credence to the economic viability of the project,'' Givner said. Goldman held talks with the Port Authority about buying all or part of the Freedom Tower, said two people with knowledge of the discussions. Goldman subsequently decided against an investment, the people said. Port Authority Executive Director Anthony Shorris wouldn't identify any firms that may have expressed interest. New York's Metropolitan Transportation Authority and the Port Authority are investing more than $3 billion in federal aid they received after the terrorist attacks to improve the downtown railnetwork. The Port Authority is building a new terminal at Ground Zero for PATH trains coming from New Jersey, which later may be expanded to include a rail connection from Long Island and John F.Kennedy International Airport. The station is scheduled to open in 2009. Vacancy Rates Construction has started on the Fulton Street Transit Center,a hub one block to east of the PATH terminal that serves 11 subway lines. Planners envision an underground transit center stretching from the center of lower Manhattan to the Hudson River ferry slipsat the World Financial Center. At the same time, the residential population in the area is growing, up to 37,000 at the end of September from about 23,000 before the attack on the World Trade Center. Deputy Mayor DanielDoctoroff predicts that 17,000 new housing units will be built and 70,000 people will live in the neighborhood by 2011. Henry Elghanayan, chief executive officer of Rockrose Development Corp., which has developed more than 60 residentialproperties in Manhattan, said the Ground Zero site should consideradding housing to the mix. ``The office market is much different from the residential market,'' he said. ``It goes up very dramatically and it comes down very dramatically.'' Rising rents and shrinking vacancy rates have been the hallmarks of downtown Manhattan's revitalization for more than a year. Office vacancies dipped below 10 percent late last year, thelowest since before Sept. 11, 2001, according to data compiled byreal estate brokerage Colliers International. Slowing Growth ``It's a really strong market, and I think it's going to staythat way for a number of years to come,'' Shorris said. Michael Cohen, chief executive officer of GVA Williams, a New York-based commercial real estate brokerage, said the additional Manhattan office space that will become available at the time the Freedom Tower opens won't have a significant effect on rents. `` I just don't see the scenario for a glut,'' he said. CBRE Torto Wheaton Research projects downtown vacancy rates will reach 12 percent by 2011 and annual downtown office rents,which jumped 25 percent last year, will slow to a growth rate of 3percent a year.     ``Rent growth will continue, but it might prove disappointing to those paying record prices for office assets and justifying it by assuming significant rent spikes in the years ahead,'' said Craig Thomas, senior vice president at Boston-based CBRE Torto Wheaton. `Like Father, Like Son' ``You can't decide to build an office building knowing exactly when to hit the market,'' said Steven Spinola, presidentof the Real Estate Board of New York, who supports building theFreedom Tower. That's usually luck.'' Opened in 1973, the twin towers only twice exceeded 95 percent occupancy, during the early 1980s, and then in their lastyears. Both periods coincided with stock market booms that boosted the lower Manhattan economy. The towers were initially so unpopular with tenants that then-Governor Nelson Rockefeller agreed to fill most of the south tower with state offices. ``The first World Trade Center was a turkey but had tremendous symbolic value,'' said Richard LeFrak, the billionaire New York developer. ``Like father like son.'' The Port Authority, which occupied 724,000 square feet in the World Trade Center's north tower, doesn't plan to take space in the Freedom Tower. Instead, it has a tentative agreement to leasethe same amount of space in 4 World Trade Center, the smallest of the four skyscrapers planned for the site. If the landlord refuses to occupy the Freedom Tower, it shows the difficulty that the Port Authority may have in signing up tenants, said Guy Nordenson, a structural engineer who worked on the first design of the Freedom Tower with Childs. ``The core of my opposition is ethical,'' Nordenson said.``Forcing government employees to occupy it when no one else will is just wrong.'' --With reporting by Sharon L. Crenson in New York. information on redevelopment at NewYork's World Trade Center site, see http://www.renewnyc.org For the Web site of the Port Authority of New York and NewJersey, see http://www.panynj.gov To contact the reporters on this story:David M. Levitt in New York at +1-212-617-4765 or dlevitt@bloomberg.net Bob Ivry in New York at +1-212-617-5157 or bivry@bloomberg.net: To contact the editor responsible for this story: Rob Urban at +1-212-617-5192 or robprag@bloomberg.net . ---------- End forwarded message ---------- There being a street between the FT and the more centrally located smaller-and-worse towers of the Libescheme...and between the new buildings and the sites of those they purport to "rebuild"... is of course one of the things wrong with the official plan... but in their zeal to keep supply tight and rents high,these operators ignore the "Group of 35" report that identified a need for 60 million square feet on new space in the city by 2020 even before 14 million square feet of Lower Manhattan's best space was destroyed. The bigger new towers are the more revenue potential they can claim, and rents should certainly exceed the $70 a square foot Silverstein is asking for top floors of the new 7 WTC...though the symbolism is still more important than the economics,as paying too much attention to short-term economics is itself a spiritual surrender to the terrorists. And the "ethics" of deferring to fears created to murders are far worse than those of demanding that people have courage. In any case,the NY Times has noted low vacancies in the area (Joe Wright forwarded the article but I'm not including it this time). Meanwhile,the official webcam at the WTC site has been stopped: http://nypost.com/seven/03022007/news/regionalnews/wtc_web_exposure_reduced_regionalnews_.htm (The alleged cost claims are quite bogus!) Ex-Governor Pataki agreed to reimburse the state for his previously mentioned rental of a private jet for his trip to Maryland to see FT beams at the steel mill when cheaper state aircraft were at his disposal. The "survivors' staircase" arguments continue, it's now proposed that it be moved temporarily while a decision is made: http://www.nydailynews.com/03-06-2007/news/local/story/503024p-424278c.html Post gripes on Bloomberg,who planned meml fundraiser in Miami and aborted trip after fire The Daily News has printed a guest column by two memorialists on the issue of names: http://www.nydailynews.com/03-09-2007/news/ideas_opinions/story/503640p-424774c.html (They speak to the dignity of the individuals killed at the WTC, but in citing "2,979" victims instead of 2,749 and not objecting to the Pentagon and Shanksville victims being mixed in,they still can't resist confusing the site's identity with those of the other attacks!) Meanwhile,keep an eye on pro-rebuilding websites... we're not idle!Archives of this email list are at http://www.put.com/wtc/archive.html except for the most recent. The Twin Towers Alliance recently completed a year since "pre-launch" and passed 4000 total signatures (including unvalidated ones)...still increasing daily despite all the rain officials pour on our parades. Please do what you can to help keep our cause in the public eye...we are NOT going away! -=-=- The World Trade Center towers MUST rise again, at least as tall as before...or terror has triumphed.