Downtown’s Rebirth, 10 Years and $24 Billion Later

A DECADE after the Sept. 11 attack, downtown Manhattan is resurgent. The residential population has doubled. Two skyscrapers — 1 and 4 World Trade Center — are rising at ground zero, due to open in 2013. The next year, the exuberant PATH transit hub is scheduled to come online. The national memorial is open; two streets have been built. A far more diverse array of businesses call downtown home today, including a large cluster of media companies, law firms and nonprofit organizations. And just last week, both the northbound and southbound platforms of the Cortlandt Street subway station were open.


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That is not what most people expected.

“I had a lot of skepticism about whether the World Trade Center area could be recreated as a vibrant, 24-hour place,” said John H. Mollenkopf, director of the City University of New York’s Center for Urban Research. “But I have to say that despite much botched planning, the delays, posturing and bureaucratic politics, things are actually coming along very well.”

But progress does not come cheap. The cost of rebuilding the trade center, several related projects and the downtown public transportation system will run close to $24 billion — probably not all that surprising given the institutional rivalries, the political squabbling and the complexity of building 26 interdependent projects on a cramped 16-acre site next to a river and with two transit lines running underneath.

Financing the reconstruction has been equally complex. After the terrorist attacks, President George W. Bush promised more than $20 billion in federal aid for New York. But slightly more than $6 billion was spent on the clean-up and emergency aid. Of the remaining $14 billion, only $8 billion was actual cash for rebuilding — the rest came in the form of tax incentives. The insurance proceeds from the site itself came to $4.5 billion.

The state provided tens of millions of dollars in additional tax breaks for downtown tenants and employers.

One World Trade Center (the former Freedom Tower) alone cost $3.2 billion to build. New security concerns in the post-Sept. 11 world contributed to the building’s being redesigned three times over the past decade. Still, this year, that building landed a glamorous lead tenant, the media company Condé Nast Publications. But it cost taxpayers plenty: $47.5 million in rent rebates and millions more in sales tax and commercial rent tax exemptions.

Goldman Sachs’s new tower across West Street from the World Trade Center site, a relative bargain at $2.4 billion, received $1.65 billion in tax-free Liberty Bonds, which saved the bank millions in financing costs. Goldman threatened to abandon the project after the state botched negotiations for the tower. That led the state to enlarge its incentive package to include $115 million in tax breaks and cash grants, in what critics described as the most egregious example of corporate welfare in city history.

Goldman’s share of the Liberty Bonds illustrates the size of its taxpayer bounty. The bonds accounted for 69 percent of the project’s cost. But the developer Larry Silverstein got only $2.6 billion in Liberty Bonds, or 41 percent of the $6.3 billion projected cost of building three towers on the trade center site itself.

Other developers, meanwhile, got a total of $1.6 billion of the tax-free bonds for 15 luxury buildings containing a total of 5,700 apartments to repopulate Lower Manhattan. Fewer than 5 percent of those units were set aside for poor and working-class New Yorkers.

Fearing the loss of businesses in Lower Manhattan, the Pataki administration provided dozens of companies with $313 million in cash grants for staying downtown, although there was little chance that the American Stock Exchange, Century 21 or the law firm Stroock & Stroock & Lavan would leave.

But nothing in the area can compare with the transit hub, with its white-winged super-structure designed by the Spanish architect Santiago Calatrava. The hub’s cost has swelled to $3.44 billion from $1.9 billion over the past decade, though it will serve only 80,000 PATH riders daily. Pennsylvania Station in Manhattan serves seven times that number, and yet its planned renovation has largely stalled.

Still, given the area’s remarkable rebirth, people may be willing to overlook that. “If you had told me the day after 9/11 that downtown would be doing as well as it’s now doing in attracting businesses and so many residential tenants, I would have said, ‘Get out of here,’ ” said Senator Charles E. Schumer, who was instrumental in getting the $20 billion in federal aid.


A version of this article appeared in print on September 11, 2011, on page MB4 of the New York edition with the headline: Downtown’s Rebirth, 10 Years and $24 Billion Later.

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Source: New York Times/ Region

About Abdul Rahman Alieh

I use this space to share interesting videos and snippets from articles and books I come across. I hope you find this blog interesting. Can't wait to read your comments! Abdul Rahman

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