Downtown looking up
How's this for a Christmas gift? A shimmering new city rising, Phoenix-like, from the dust of Ground Zero. Okay, the mega-vision for downtown's renewal is not going to happen overnight. But, believe it or not, the prospect of all five towers slated for the site actually being built has just taken a giant step closer to reality.
That's quite a turnaround from a few months back, when most project insiders believed developer Larry Silverstein could not bankroll more than one building, the iconic Freedom Tower, if that.
Earlier this month, a federal jury only blocks from Ground Zero ruled that the attacks constituted two separate events. That decision means another $1.1 billion in insurance proceeds in the kitty.
Talk about stocking stuffers! But it will take more than money for these towers to rise. It will take the political will of the man who wrapped himself in the flag of 9/11 and vowed to restore all that was destroyed that September day, Gov. Pataki.
The court win for Silverstein means that he will have, in all, $4.65 billion available from insurers for replacing the acres of lost office space. That's not the entire $7 billion he initially had sought. He lost the bigger of his two insurance cases in May. But many experts believe that now he may have enough to get over the finish line - with two Big Ifs.
Big If No. 1: To cover what Silverstein didn't get from his insurers, he will need the lion's share of $3.5 billion in low-interest Liberty Bonds that Washington earmarked for reviving downtown. That's not a done deal. Developers are eying the bonds for building everything from a Marriott in Harlem to a sprawling new Bronx Terminal Market. Worthy projects, but the bonds were meant for downtown, and downtown is where they should stay. Gov. Pataki, who has a lot to say over use of the bonds, must play the enforcer.
Big If No. 2: Tenants. Is there enough demand to sustain a new development that would equal one-third the space in all of downtown Los Angeles? Silverstein is said to be in serious talks with Verizon to be the anchor tenant for his recently rebuilt 7 World Trade Center, which abuts Ground Zero. He will need dozens more king-size tenants like that to get his five planned towers underway.
Not an impossible dream, says M. Myers Mermel, a tough-minded real estate exec who has been tracking downtown commercial space since 9/11. "Investment banks, to name one sector, are expanding into new space as they continue to hire," he said. "And downtown is the cheapest market for space in Manhattan." That means a stream of blue-chip tenants for Silverstein - potentially.
But if Silverstein is to reel in those big fish, he will need Pataki. The governor must sprinkle around more incentives and use some of his famed aw-shucks charm to jawbone prospective tenants into signing on.
This would do much to revive the fading image of a governor facing fiscal meltdown in Albany, gridlock in the Legislature and calls from fellow GOPers to pass on running for a fourth term. Sure, he'll need backup from Mayor Bloomberg and others. But it's up to Pataki to play Santa Claus and make sure this gift gets delivered.