7WTC deal's fanfare a sign of frayed nerves?

Real Estate Weekly, Oct 17, 2007 by Daniel Geiger

NCR Corporation, a leading maker of retail payment systems and ATM machines, announced yesterday (Tuesday) that it will be relocating most of its executive management and a portion of its sales staff to Lower Manhattan from the company's headquarters in Dayton Ohio. As rew-online.com first reported in recent weeks, the firm will be taking the 35th floor at 7 World Trade Center. The company received an unusual level of acknowledgement from high-ranking government officials, including New York State Governor Eliot Spitzer, Assembly Speaker Sheldon Silver and City Councilman Alan Gerson, who gathered at the Lower Manhattan Development Corporation's offices Tuesday morning to formally announce the lease.

"What is critical is we are the magnet for senior corporate decision makers ... that is what our economy is founded on," Spitzer said when asked by a reporter why the lease was receiving attention when other deals at 7 World Trade Center, including a lease for hundreds of thousands of square feet taken last year by Moody's Investors Service, seemed to draw less notice.

Unlike most of the other tenants in 7 WTC, who are predominantly local tenants who relocated to the building from the within Manhattan, NCR will be the first to move high-level staff from outside of the city.

"That we're the epicenter of intellectual decision-making is what makes Lower Manhattan what it has been," Spitzer said.

At the start of the news conference, Spitzer said that NCR was moving its headquarters from Dayton.

"I don't want to raise a rivalry here, but it makes more sense to be here than in Dayton, Ohio," Spitze, said.

NCR's chairman and CEO Bill Nuti corrected that point, stating in his remarks during the press conference that "our corporate headquarters will remain in Dayton ... we're very proud of Dayton, Ohio."

Nuti said that 200 of the company's employees would work in the new office at 7 WTC, but it isn't clear just how many will come from the firm's Ohio headquarters. According to Nuti, the company already has 350 employees in New York who work from home and he said that many of them would now have an office to go to.

"We're very pleased to be a part of the [downtown] rebuilding effort," Nuti said. "Over 450 of our customers are in New York, so it makes a lot of business sense for us to be here as well."

Although the downtown commercial office market has surged in recent months and a number of large financial firms have made significant space commitments in the district, the deal may be a chance to highlight the district's merits at a crucial time when one of the area's largest tenants is considering its space options. Merrill Lynch, which has over a million square feet of space at World Financial Center, seems to be at a crossroad over whether to renew its existing lease, potentially lease a full tower at the World Trade Center site or relocate elsewhere, possibly midtown where it has been rumored to be in discussions with the developer, Vornado, to be the anchor tenant in a new skyscraper at the site of the Hotel Pennsylvania.

Avi Schick, president of the LMDC, said at a press conference in September that he was working "like hell" to keep the financial giant in Lower Manhattan.

But Schick, who was at the press conference Tuesday, seemed anxious when asked whether his efforts had been successful.

"They're very close to announcing their decision," was all Schick said.