Commercial development still on track

Real Estate Weekly, Nov 7, 2001 by Parke Chapman

Sept. 11 couldn't stop what this city is known by, and loved for: commercial development. A host of major commercial projects underway before the World Trade Center attacks remain on track despite the urgency of rebuilding downtown.

Several are mired in the public review process while many have been delayed by the attacks. But, overall, the pace of development remains strong, further evidence that Manhattan will always be a work in progress.

"People are eager to move forward. There is an extensive amount of investment being made in Manhattan development," said Joseph Rose, commissioner of city planning.

Rose was optimistic about the future of these large scale developments, yet he also made it clear that rebuilding efforts would be a paramount concern for years to come.

"The challenge is to assure that lower Manhattan continues to be a good environment, and that means insuring diversity down here," said Rose.

Rose said that since the early 1990s the city has been working to lure a variety of industries to lower Manhattan. The efforts were paying off prior to Sept. 11--lower Manhattan was becoming more of a residential area than it had ever been in the past. Commercial businesses other than financial services firms or banks were also calling this area home.

There was a reason that this happened, according to Rose.

"This area has been studied a lot. There was a lot of analysis before Sept. 11 about what should happen here," he said.

The challenge is to "make sure that lower Manhattan continues to be a good environment," said Rose.

As far as new downtown developments, the proposed New York Stock Exchange at Wall and Broad Street still needs condemnation proceedings before it can move forward. The New York Times Company's new building. slated for Eighth Avenue and 41st Street also needs condemnation.

Several major projects must petition for rezoning. The former Con Edison site on the east side must be rezoned before Fisher Brothers and Sheldon Solow, the joint developers of the project, can begin work on the site.

In terms of where the majority of these developments will be built, 42nd Street is a hotbed of activity.

Howard Milstein has plans for a 850,000-SF office development at 42nd Street and Eighth Avenue. Carlisle Development is building a 565,000-SF office building at 42nd Street and Twelfth Avenue and the Durst Organization has a 1 million-SF development slated to be built at Sixth Ave. and 42nd Street. This project, like many others, needs condemnation before it can proceed.

One of the buildings that will house the new stock exchange--15 Broad St.--is being occupied now by the Bank of New York. A spokesperson for the Economic Development Corporation said that the Bank of New York will occupy 15 Broad for a maximum of 18 months under a licensing agreement with JP Morgan.

It is not a sublease, since the city will condemn it when the Bank of New York's occupancy ends.

"This could delay construction by six months, at the most. Otherwise, we are moving forward with acquiring all of the properties here," said Janel Patterson, EDC spokesperson.

Uptown, the embattled Sloan-Kettering research facility development on the Upper East Side is apparently moving forward. The project has sparked much controversy over what neighbors fear will be a biotech facility with the potential to contaminate the area. Sloan-Kettering has dismissed their fears, and the city appears to be on the cancer hospital's side. Community opposition is sure to dog this development for some time, however.

One project whose future is uncertain is the $1.5 billion Lincoln Center redevelopment plan.

Even before Sept. 11, infighting had stalled the project. Then the chairman of the Lincoln Center Redevelopment Corporation abruptly resigned.

"The project, at this point, is undefined. It has never gotten to the point of a master plan because none of those involved can reach a consensus," said Larry Horowitz, chairman of community board 7.

"There are just so many pieces of this puzzle. Spending $1.5 billion is no small venture," said Horowitz.

By all accounts, Manhattan's commercial centers will continue to grow.

Commissioner Rose cited "an extensive array of projects" ongoing throughout the city, many of which are moving into the approval phase.

And in typical New York fashion, ambition is still running high.

"Some developers have even contacted us hoping to expand their proposals," said Rose.