Redevelopment of WTC public areas authorized

Real Estate Weekly, March 23, 1994

Planning for a major redevelopment of the public areas at the World Trade Center was authorized recently by the Port Authority Board of Commissioners.

The Board approved funding of $10 million for the development of plans, studies, surveys, specifications and cost estimates for a broad renovation of the outdoor Austin J. Tobin Plaza, the retail concourse and the complex's perimeter areas.

The Board also authorized staff to solicit private development interest in the renovation project, which is estimated to cost $300 million.

Port Authority Chairman Richard C. Leone said, "Reinvesting in the World Trade Center's facilities and services is essential to preserving its status as a first-class business complex and one of the Port Authority's major producers of net income. The Trade Center generated $51 million in 1992, funds necessary to support a myriad of vital transportation and trade facilities in the New York-New Jersey region."

"Our budget as approved last year includes $800 million in the complex over the next ten years to ensure that the World Trade Center remains lower Manhattan's pre-eminent business address," Leone said. "We believe that this

investment will pay for itself by preserving and enhancing the Trade Center's income-producing capability."

The.proposed scope of the public space renovation program includes new corridors, escalators, entrances and finishes on the Concourse level; new structures, skylights and landscaping on the Plaza level; and improvements to security around the perimeter of the complex.

Among its design goals, the program will establish a true main entrance to the complex, provide improved pedestrian flow between the Plaza and the underground concourse, and reinvigorate the shopping mall, bringing daylight and a more spacious atmosphere into its currently dark, terminal-like corridors.

Port Authority Executive Director Stanley Brezenoff said, "About 95 percent of the Trade Center's revenues are generated by its office space. Thus, a major goal of the public space project is to maximize the revenue stream from the office space by making the center more modern and attractive to current and prospective tenants. At the same time, we will be revitalizing the complex as a center for tourism and shopping, both for lower Manhattan and the metropolitan region."

Brezenoff said the bi-state agency expects to realize several benefits from its plans to solicit private-sector participation in the public space redevelopment project. "The success of retail development, in particular, requires extensive experience in the redevelopment and management of retail and food operations within a mixed-use office complex," he said. "To reduce the Port Authority's investment and provide needed private-sector expertise in maximizing the retail revenue potential of the complex, a private partner will be sought to provide capital resources, experience and capabilities beyond those that exist within our agency."

"With nearly 30 percent of the World Trade Center's 10 million square feet of office space coming up for lease renewal over the next five years,' Brezenoff emphasized, "its ability to continue to generate substantial net income is greatly dependent on how well it competes in today's real estate market. The improvements to its public spaces that we advance today, and the larger modernization program for the Trade Center's physical plant, will keep the Center strong and healthy for decades to come."

Brezenoff noted that several major WTC building infrastructure projects are in various stages of development and construction. These include:

* Upgrading the capacity of the complex's entire electrical system from 4 watts per square foot to 10;

* Increasing the capacity of its heating, ventilation and air-conditioning system;

* Modernizing the 250 elevators in the complex;

* Installing new fire alarm and sprinkler systems;

* Constructing a new operations control center;

* Constructing a new command center for coordination of security;

* Renovating the Vista International Hotel; and

* Constructing new corridors, stairs and escalators on the World Trade Center Concourse.

In the second quarter of 1994 the Port Authority plans to advertise a Request for Qualifications/Solicitation of Interest (RFQ/SOI) for a development partner to participate in the public space renovation. The RFQ/SOI would determine not only developer qualifications, but also the level of creativity, interest and commitment to the project. A Request for Proposals will then be issued to the developers identified through the RFQ/SOI process.