WTC Leases  - News Articles

November 29, 1987,. New York Times, "New York State Offices; The Tainted Move From the World Trade Center," by Mark McCain,

May 4, 1988, PR Newswire, "Dravo completes sales of Gibbs & Hill, Dravo Engineering companies,

November 29, 1988, New York Times, "Salomon Will Move to Trade Center," by Thomas J. Lueck,

June 11, 1989, New York Times, "Softening Rents; Sluggish Market Favors Tenants Renewing a Lease," by Mark McCain,

May 16, 1990, New York Times, "Real Estate; Japanese Help Fill Trade Center," by Alan S. Oser, 

March 7, 1993, New York Times, "The Twin Towers: The Cost -- Inching Back to Life, Trade Center Tallies the Cost; Businesses Concerned How Far Insurance Will Cover Them," by Steven Prokesch with Barry Meier,

April 23, 1993, New York Times, "BankAmerica Signs A Lease for 8 Floors At the Trade Center," by Thomas J. Lueck,

November 5, 1993, PR Newswire, "The Federal Home Loan Bank Moves to Seven World Trade Center,"

June 13, 1997, New York Times, "Dow Jones Unit in Move,"

August 13, 1997, New York Times, "Dow Jones Markets To Open New Office," by David M. Halbfinger,

December 17, 1997, Real Estate Weekly, "Blue Cross/Blue Shield signs largest WTC lease of decade,"

May 31, 1998, New York Times, "At the World Trade Center, Things Are Looking Up," by John Holusha,

July 20, 1998, Brown and Wood Press Release, "Port Authority Signs Major World Trade Center Lease -- Prestigious Law Firm Expands Space, as Trade Center Leasing Soars,"

December 2, 1998, Real Estate Weekly, "Midtown rents climb, as Financial District paces downtown,"

June 30, 1999, Real Estate Weekly, "Year-to-date absorption shows positive signs,"

August 4, 1999, Real Estate Weekly, "Despite leasing decline, Midtown is tightest since '85,"

March 4, 2001, New York Times, "CITY LORE; Learning to Love the World Trade Center," by Tara Bahrampour,

July 25, 2001, Real Estate Weekly, "Leasing activity subsides in most Manhattan submarket,"

September 11, 2001, CNN Money, "Tenants scramble to cope," by Staff Writer Chris Isidore, 

September 11, 2001, CNN News, "World Trade Center: A city in towers,"

September 12, 2001, eWeek, "Tragedy Strikes Interactive Businesses In WTC,

September 12, 2001, Washington Post, "An Icon of Capitalism: 'Now It's All Gone' World's 5th-Tallest Buildings Housed Offices, Retail Shops," by Greg Schneider and David S. Hilzenrath, 

October 24, 2001, USA Today, 'Wall Street' migrates to Midtown," by Noelle Knox and Martha T. Moor,

December 19, 2001, Los Angeles Times, "New York Office Market in a Spin," by Jesus Sanchez,

April 21, 2002, The Observer, "The Journal Tries to Leave Wall Street," by Sridhar Pappu and Tom McGeveran,

May/June 2003, Information Management Journal, "A disaster plan in action: How a law firm in the World Trade Center survived 9/11 with vital records and employees intact," by Jean Barr,

September 17th 2006, NY Daily News, "Big Firms Feasted on Small-Biz Bucks, The rich gobbled up WTC aid meant for little guys," by Russ Buettner,

November 14, 2006, SeekingAlpha, "An In-Depth Look At The KBW IPO," by Bill Simpson, 

February 2011, Grubb & Ellis, "Downtown Starts Year Strong,"

June 13, 1997, New York Times, "Dow Jones Unit in Move,"

Dow Jones & Company has leased 71,000 square feet of office space at Two World Trade Center, the Port Authority of New York and New Jersey said yesterday.

The 10-year lease is valued at about $23 million.

Dow Jones Markets, the company's financial and business information unit, will move its marketing operations to New York from Harborside Financial Center in Jersey City. The company will occupy two floors in the 110-story tower, which is owned by the Port Authority.

August 13, 1997, New York Times, "Dow Jones Markets To Open New Office," by David M. Halbfinger,

Dow Jones Markets, the financial data division of Dow Jones and Company, is setting up a 150-person office in Manhattan to develop new products as part of an effort to turn itself around, the company said yesterday.

In January, under pressure from minority shareholders upset by the poor performance of the company's stock, Dow Jones announced plans to invest $650 million over the next three to four years to overhaul Telerate, which it renamed Dow Jones Markets. Telerate has been losing market share to Reuters Holdings P.L.C. and Bloomberg L.P. In April, as part of that effort, Dow Jones Markets formed a technology and marketing alliance with the Microsoft Corporation.

The new office at 195 Broadway will house about 50 people who now work at Telerate's complex at Harborside Financial Center in Jersey City, as well as close to 100 new employees.

Dow Jones, represented by Cushman & Wakefield, rented 35,920 square feet at 195 Broadway, at Fulton Street, on a three-year sublease from the Cigna Insurance Company, which has 10 floors in the building, owned by Peter S. Kalikow. Cigna was represented by the Williams Real Estate Company.

November 3, 1990, New York Fears Exodus of Jobs On Wall Street, by Richard Levine

Just when New York can least afford to lose them, several major financial institutions are considering leaving the city and taking thousands of jobs with them. The biggest and most immediate concern to New York is the possible departure of the five commodities exchanges, where options and futures for items like gold, platinum, aluminum, oil, coffee, cocoa, sugar, orange juice and currencies are traded in a frenzied choreography of capitalism in the World Trade Center complex. They are the hub of an industry that annually generates $1.3 billion a year in goods, services...

December 2, 1998, Real Estate Weekly, "Midtown rents climb, as Financial District paces downtown,"

(increase of office leasing rate in New York City)(Industry Overview)(Statistical Data Included)

The WTC/WFC submarket saw its availability rate drop to 4 percent last month thanks in part to Landmark Education Corp.'s 44,383 square-foot lease and Global Knowledge's 12,730 square-foot commitment, both at One World Trade Center

August 4, 1999, Real Estate Weekly, "Despite leasing decline, Midtown is tightest since '85. (New York)

Constraints on supply put a damper on leasing activity in the World Trade/World Financial Center submarket during the first half of 1999. Year-to-date leasing volume of 390,000 square feet is off by 62 percent from last year's first half activity. WTC/WFC recorded negative absorption totaling 130,000 square feet over the first six months of 1999, pushing availability up to 4.9 percent. Several significant blocks of space were offered in June, including direct offerings of 26,684 square feet and 21,925 square feet at 1 and 2 World Trade Center, respectively, as well as Nomura Securities' 50,000 square-foot sublease offering at 2 World Financial Center

July 25, 2001, Real Estate Weekly, "Leasing activity subsides in most Manhattan submarket,"


Downtown's leasing totaled 2.64 million SF through midyear, compared to the 5.75 million SF leased during the same period in 2000. In the same period in 1999, 3.26 million SF was leased. New sublease space continued to surface in June, including Hartford Fire Insurance Company's 75,000 SF offering at 7 World Trade Center. With space steadily returned to the Downtown market each month this year (350,000 SF added overall in June), the available supply notched up by a full point since this time last year to 6.4 percent. At midyear 1999, however, Downtown's availability stood nearly twice as high at 11.4 percent. Average asking rents held firm at $43.27 per SF, up more than $3 per SF from a year ago and more than $10 per SF from two years ago.

June 30, 1999, Real Estate Weekly, "Year-to-date absorption shows positive signs.(office space leasing) 

Availability in the World Trade Center/World Financial Center segment dropped by three-tenths of a percentage point to 4.6 percent in May, based on 120,000 square feet of leasing activity and 80,000 square feet of positive net absorption. May leasing activity included a long-term renewal of 218,244 square feet by Credit Suisse First Boston at 5 World Trade Center, and DeLoitte & Touche's signing for 75,000 square feet at 1 World Financial Center

June 11, 1989, New York Times, "Softening Rents; Sluggish Market Favors Tenants Renewing a Lease," by Mark McCain,


COMPANIES that signed leases for Manhattan office space early in this decade have reason to be cheerful as they approach the end of 10-year agreements.

Many of them are paying excessive rents because their leases date to a time when landlords held the upper hand. But rent increases have not kept pace with inflation since 1985, and as leases expire, tenants are renewing at lower rents or moving into better space without increasing their rent outlay.

''Without question, people who signed leases in 1981 and 1982, at the height of the market, are paying well in excess of what the market can bear,'' said Stephen F. Anderson, a vice president of Coldwell Banker Commercial Real Estate, a real estate company.

Some tenants, burdened by rents as high as 50 percent above market value, are restructuring leases that still have several years remaining - often by merging the remaining high-rent years with lower rents of a new long-term lease.

Building owners are willing to negotiate these deals because they prefer the financial security of long leases over the opportunity to briefly collect a higher rent on space that may then sit empty.

''Vacant space is a nightmare in this market,'' Mr. Anderson said, ''and landlords are concerned about the future, so they're willing to belly-up to the bar and do some serious negotiating to keep tenants in place.''

Of course, renewal opportunities vary from building to building. Some landlords, out of foolishness or strength, still play hardball during negotiations, but a greater number of them have eased their game.

''As a landlord today, you have to be more accommodating than you might like to be,'' said H. Dale Hemmerdinger, president of Atco Properties & Management, which owns five office buildings in Manhattan. ''Our basic philosophy at this point is: Tenants are very valuable and we're willing to do whatever is reasonable to keep them. That permeates everything we do.''

For tenants, that attitude is a welcome change from the take-it-or-leave-it stance held by many owners in the early 1980's, when demand outpaced supply of Manhattan office space.

Among the tenants signing better deals is Skandia America Reinsurance Corporation. This summer it will move offices from a 21-year-old tower at 280 Park Avenue to a slightly newer tower at One Liberty Plaza, where it will occupy three 40,000-square-foot floors.

NOT only will Skandia be paying a substantially lower rent at One Liberty Plaza, but it will occupy space in a building that has had a recent cosmetic and mechanical overhaul.

''Economically this deal is more attractive for us - no question about that,'' said John Lucadamo, a vice president of Skandia. ''Also, One Liberty Plaza is a high-quality building and it's in the heart of the reinsurance business, where we belong.''

Although details of the Skandia deal were not released, which is typical of lease transactions, realty experts say that base rents at One Liberty Plaza are about $36 to $38 a square foot. And the escalation formulas - for increasing rent payments - are less onerous than those of the early 80's.

Back then, most owners demanded escalations linked in arbitrary fashion to wage increases secured by union porters in office buildings. Ostensibly a way for owners to cover increases in operating expenses over the life of lease agreements, which typically last 10 years, the escalation clauses rapidly became profit centers by outpacing inflation.

That is the reverse of what happened in the 70's, when tenants held leases that prevented landlords from recouping increased costs during periods of double-digit inflation. Today a compromise is often negotiated: Tenants pay annual escalations based solely on increases in a landlord's operating expenses, such as insurance, repairs and payroll.

''The porters' wage clauses have really nailed a lot of tenants with leases written in the early 80's,'' said Henry L. Feld, a senior vice president of Joseph Hilton & Associates, a realty company based in Manhattan. ''They've been paying tremendous escalations on the back end of leases.''

Moreover, tenants have been hit with substantial property-tax increases - passed along separately by landlords. ''Companies that signed leases in buildings that came on stream in '82 and '83 - like 101 Park Avenue and 520 Madison Avenue - are now eating $7 or $8 a foot just in tax escalations,'' Mr. Feld said.

ALTOGETHER, a company that leased space in a new office building eight years ago for a base rent of $40 a square foot could be paying in excess of $60 a square foot today, even though the market value of the space may have remained at $40.

And when time comes for the owner to negotiate a new lease, his share of that stagnant $40 rent will be smaller because of higher taxes and operating expenses incorporated into the base number.

''In many instances, the net operating income for landlords has dropped over the past decade,'' noted Barry Nealon, a managing director of Jones Lang Wootton, a real estate company with offices at 5 Hanover Square, a downtown office building erected in 1962.

''Our 10-year lease is expiring in November,'' Mr. Nealon said. ''In today's marketplace, we can either migrate to quality - by moving into class-A building where the rents are comparable to what we now pay - or we could choose an older building and secure a substantial reduction in rent.''

Or a tenant can remain in its current offices, and negotiate a lease renewal that reflects the sluggish condition of rental rates. Building owners prefer renewals because leasing space to new tenants is costly. There are brokerage commissions, marketing expenses, lost income while the space is vacant, renovation work to prepare the space for new tenants, and often six months of ''free rent'' as a lure.

Although the first choice of some tenants with expiring leases is to remain where they are, other tenants have priorities or space requirements that their existing space can not accommodate, especially now that New York City regulations make modest renovations difficult in buildings with asbestos.

''If a tenant doesn't need to change his office layout and his only complaint about an expiring lease is that it's above market, any smart landlord can make a real sweetheart deal and still be way ahead of the game,'' said Maurice H. Solomon, a senior vice president of Julien J. Studley Inc., a realty brokerage based in Manhattan.

''The upfront money a landlord has to spend to get a new tenant is substantial,'' he said. ''You can figure it'll cost him at least $100 per square foot in lost rent, removal of asbestos, demolition work and building new interior space for the next tenant. Then on top of that, he's got a brokerage commission to pay.''

March 7, 1993, New York Times, "The Twin Towers: The Cost -- Inching Back to Life, Trade Center Tallies the Cost; Businesses Concerned How Far Insurance Will Cover Them," by Steven Prokesch with Barry Meier,

After a week of frantic efforts, hundreds of companies exiled from the crippled World Trade Center have come back to life in temporary quarters, but the bombing itself is nevertheless shaping up as one of New York City's most costly financial disruptions.

Crude estimates place the cost of the economic havoc as high as $1.1 billion. While it will be some time before the real figure is known, it is already clear that the disaster has produced many thousands of hours of lost work, tens of millions of dollars of lost business and huge relocation expenses.

Many of the more than 350 businesses, government agencies and other organizations housed in the complex are hoping that insurers will cover most of their losses. But some are concerned that insurers might not pay all their expenses. And the catastrophe's cost could well end up in higher insurance rates for New York businesses inside and outside the complex, an insurance spokesman, Steven Goldstein of the Insurance Information Institute, said. 

Disaster's Aftermath

In the disaster's aftermath, most large companies showed remarkable pluck and ingenuity in operating at close to normal levels though at considerable psychological and financial costs. But some small businesses -- especially retailers in the trade center's concourse, which is now open but resembling a ghost town -- fear for their existence and look to emergency government loans.

"Our business is off 92 percent," said John Torres, the manager of Lynn's Hallmark card shop in the concourse. "We opened right away, Monday at seven, but there's no traffic -- a few curious people, but that's about it. I laid off about 16, 20 people. I had 28 employees, and I'm working with about seven. They keep calling to see if they should come in, but I've got nothing for them to do."

Faced with an exile of at least a month, businesses of all sizes are growing anxious about when they will return to normal. And while many companies are desperate to get back to their trade center offices, some are threatening never to return or to depart as soon as their leases expire.

"By and large, I think they are going to have to upgrade the quality of that building if they are going to expect anyone to renew their leases," said Charles H. Lott, chairman and chief executive of Keefe, Bruyette & Woods Inc., an investment bank specializing in bank securities and corporate finance.

Already there are cries among the center's tenants that its owner, the Port Authority of New York and New Jersey, should pay their bills. "This is going to be very expensive when we tote up the bill," said  Alfred A. DelliBovi, president of the Federal Home Loan Bank of New York, a center tenant. "Certainly we will use every avenue we can to be compensated."

The Port Authority has stopped charging tenants rents until they reoccupy their premises. In addition, Charles J. Maikish, the trade center's director, said the authority was considering providing relief for the higher costs or business losses suffered by tenants. He insisted that the authority still planned to reopen the center by early April.

Working Conditions Are at Times Bizarre

For most of the 55,000 people who work in the complex -- one of the nation's premier centers for industries like banking, securities, shipping and accounting -- it has been a period of hardship and working conditions approaching the bizarre.

Some 800 securities traders, data processors and other employees of Dean Witter, Discover and Company now work out of what had been an empty 100,000-square-foot warehouse on Varick Street in lower Manhattan. Forty-seven executives and other employees of the Federal Home Loan Bank of New York must now commute up to two and a half hours to reach their temporary headquarters in Piscataway, N.J. These and scores of others -- from law firms to newspapers to shipping companies to government agencies -- have doubled up employees in rented spaces or branch locations, accepted the charity of customers and suppliers who offered space, or simply sent people home.

Traders at the New York Mercantile Exchange and the New York Commodity Exchange, among the only large businesses able to remain in the complex, had to resort to packing dry ice around computers to prevent them from overheating because the equipment that runs the air-conditioning is buried under tons of rubble.

What has happened this last week has been nothing less than a diaspora of a skyscraper city. Perhaps most amazing, the Herculean task of resettling has occurred so smoothly, especially given that many of these businesses rely on the instantaneous transfer of information and money for their livelihoods.

New York Telephone has installed or rerouted 11,000 telephone lines and installed wiring for thousands of computers for trade center tenants at new locations. Tens of thousands of pieces of office equipment -- computers, photocopiers, desks and even garbage cans -- were rented, begged or borrowed. The International Business Machines Corporation alone provided some 30 customers with more than 500 personal computers. 

Economic Toll Continues to Rise

But the price continues to grow. Workers and companies not only left behind offices and records but cars, feared destroyed by the bomb, as well.

"We've lost some vehicles I think," said Don C. Becker, president of The Journal of Commerce Inc. "My car is down there. I don't know what happened to it." He estimates the disaster has so far cost his company $100,000, assuming its cars are intact.

Government officials last week groped to estimate the economic costs. It is unlikely that the cost of bombing will reach the record $15 billion in losses from Hurricane Andrew. Still, the destruction will easily exceed the $330 million in losses caused last year by a flood in downtown Chicago.

The preliminary guess from Gov. Mario M. Cuomo's office was $700 million, excluding structural damage to the center. Including the repair, New York City Comptroller Elizabeth Holtzman put the price at $1.1 billion, assuming the complex remains closed a month. That figure included $317 million in relocation expenses, $318 million in lost business and lost labor, and $79 million in lost retail sales.

Deputy Mayor Barry F. Sullivan said that at this point, nobody really knew what the ultimate cost would be. He suspected that others' estimates were much too high. But they could end up being too conservative. The now-vacant New York Vista Hotel, which sits above the site of the explosion, is losing $100,000 to $250,000 a day, and it may cost hundreds of millions to repair the hotel if structural damage proves severe.

Finding Ways To Manage Chaos

Hours after the disaster struck, companies began carrying out disaster plans. By last Sunday night, employees were reporting to mothballed warehouses, branch offices or sister companies. Others went to special high-tech support centers created for just such disasters. As last week progressed, they began the arduous tasks of trying to recover records and documents from the towers.

"I was there Sunday for 14 hours and everything was chaos, we could not get into the office for three days," said Ward Lape, senior vice president of Candia Shipping (USA) Inc. By Friday, he was still sharing a friend's office in Long Island City, Queens, at a desk with three co-workers and a jumble of phone lines.

The Port Authority hopes to begin restoring the complex's support systems this week and allow more tenants to be in the building at the same time. As of the weekend, access was severely limited. People still waited hours for one of 35 authority staffers to escort them to their offices.

Echoing scores of others, Masahiro Nagayasu, manager of the Americas division of Fuji Bank Ltd., said his employees waited up to three hours to get to its offices on floors 79 to 82 in Tower 2. Then they had 20 to 30 minutes to race around, grabbing computer disks and files.

Others are learning how to direct employees scattered all over the place. Dean Witter has set up a six-person center to track employees' changing telephone numbers in new locations. That firm, like dozens of others, gave employees time off while it searched for office space, computers and phone lines. About 1,500 of Dean Witter's 4,500-plus employees at the trade center were still not working by the weekend.

Keefe, Bruyette & Woods, the investment bank, had its headquarters and more 70 employees in Tower 2. Now, traders and sales representatives are working in the Jersey City office of Pershing & Company, its clearinghouse. Its corporate finance staff is in the midtown Manhattan law offices of Wachtell, Lipton, Rosen & Katz. The fixed-income division is in the bank's Hartford offices. And its security analysts are working at home.

The voice of Mr. Lott, Keefe's chairman, was thick with emotion as he related the generous offers of space he had received from other companies. But even so, his week was filled with frustrations. Traders initially had to guess where they stood in what they had bought and sold, and management still is not getting daily detailed briefings on whether the company is making or losing money. Even so, Mr. Lott was amazed that company was operating as smoothly as it was.

"What is missing is communication between people," he said. "We will certainly lose something because our customers are having a hard time getting through." By the weekend, he estimated that the company was still losing 20 to 30 percent of its usual business. 

The Role Of Computers

Many companies hope to regroup all their employees in temporary offices in the week ahead. And some were astounded that contingency plans had actually worked. Many said the hurried relocation would have been impossible even five years ago, when technology and backup systems were more primitive. For example, New York Telephone lacked the digital technology five years ago to reroute phone calls almost instantly.

Thanks to its plan, The Journal of Commerce was able to send its editing staff to its composing operation in Phillipsburg, N.J. The issue printed on Friday was two pages shorter than planned and three hours late going to press. But by Tuesday, the paper was on schedule.

Computers and telecommunications, rather than being a fragile link, made it far easier to restore operations from remote sites. The Federal Home Loan Bank of New York's wire room, through which it electronically transfers, or "wires," billions of dollars, was in the World Trade Center. But it got a backup wire room operating in its Piscataway offices within a few hours of the blast.

"More than a dozen of our people came down the chimney, emerged onto West Street, took a couple deep breaths and came over here, which is why we were up and running at 3:30 P.M. on that Friday," Mr. DelliBovi said. "We did $1.3 billion worth of business on Friday over here. That's a pretty regular amount."

For many businesses, operations are improving. The New York Shipping Association had relied on a mainframe in Tower 2 to dispatch 3,500 longshoremen who load and unload ships in New York harbor. Last week, member companies had to handle 75 percent of the workload. The association handled the remainder by "creatively rigging" a system of personal computers in its Port Elizabeth training center. Now, the group has retrieved its critical database and will soon rent another mainframe.

Smaller companies like Employees Manpower, an employment agency, are still looking for new homes. Others are improvising. Dale-Coane Inc., a messenger service, has had to rent cars because its own vehicles are inside the garage where the bomb went off and which is still sealed while the investigation continues.

Bi-Lingual USA, a language school on the 81st floor of Tower 1, is arranging for its students to come to its other location at Grand Central Terminal or sending teachers to pupils' homes. "The thing that hurts us is that we are a service company," said Koji Matsuo, one of the school's managers. 

Some Winners, But Mostly Losers

Some suppliers, like those selling rental equipment or emergency consulting services, have prospered from the episode. But some businesses who normally supply the center's tenants are reeling.

Mark Perry, owner of Stellar Concepts Inc., a vendor of glare-resistant screens and ergonomic computer equipment, said some 15 percent of his company's clients were located in the trade center. While he expects business to rebound eventually, he fears a cash crunch in coming months because trade center tenants may not be able to pay bills.

But it is retailers, inside and around the complex, that face the hardest times. Puddles of ice cream are melted inside a closed Ben & Jerry's franchise. Open shops have seen business drop by 50 to 90 percent, forcing some layoffs.

Small companies and retailers have lined up for aid from various government agencies like the Federal Small Business Administration, which has handed out some 95 applications. Through Friday, New York City and New York State agencies had approved $1.1 million worth of low-interest loans to 46 small companies.

Still, dozens more are searching for money. Harris Goldberg, manager of Papillon, said his clothing store in the center did not qualify for New York money because it was not displaced. He is plowing through the documentation for a Federal loan. "They don't make it easy for the little guy," he said.

The majority of tenants interviewed last week said that they believed Port Authority officials were doing their best under extremely difficult circumstances and would not hesitate to return. But as companies tallied their losses, at least a handful began to question whether they would return to the center or under what conditions. A great many people said they were livid that the complex's emergency backup and safety systems proved so inadequate. Many also complained that the Port Authority had not kept them informed of developments so they could plan.

Mr. Matsuo, the manager at Bi-Lingual USA, said he was concerned about the business's future if it went back to the complex. "Most employees are afraid to go back," he said. "More importantly, how do we ask our students to come back to school there?"

Mr. Maikish of the trade center summed up the situation this way. "The short-term reaction is going to be one of whether people want to renew," he said. "But I think they'll choose to renew their leases. I think the quality of space will improve as a result of the reconstruction."

Photos: Scott Marsh, head trader for Dean Witter, working at the company's temporary space on Varick Street. (Suzanne DeChillo/The New York Times) (pg. 1); Employees of Sumitomo Bank have temporarily moved their offices from the World Trade Center to 7 Hanover Square; Eric Deutsch, right, of the Real Estate Board of New York, helping Ron Schwenk, left, and Gary Johnson of United Seamen's Service to find temporary office space last week for their organization. (Photographs by Sara Krulwich/The New York Times) (pg. 40)

September 11, 2001, CNN Money, "Tenants scramble to cope," by Staff Writer Chris Isidore, 

World Trade Centers were home of many leading brokers, agencies


5:36 p.m. ET

NEW YORK (CNNfn) - The World Trade Center, destroyed Tuesday by a terrorist air attack, housed 430 businesses with 50,000 workers. Those businesses including some of the biggest names among U.S. and world financial institutions, scrambled late in the day to estimate the damage and help survivors.

One of the largest tenants in terms of employees based there, Empire Blue Cross Blue Shield, had about 4,000 employees on seven floors in Tower One, including the health insurer's top executives.

Sean Doolan, spokesman for the company in Albany, said none of its top executives was hurt in the blast or collapse of the two towers, and so far the company is not aware of any employees who were killed.

Dust and dark blankets downtown Manhattan after the collapse of the two World Trade Center towers Tuesday.

"Based purely on word of mouth, we believe all were evacuated," he said. "But I couldn't emphasize how speculative it is."

Empire is asking employees based in the center to call 866-761-8265 to check in with the company. He said the company has other operations in New York state, in Staten Island, Melville on Long Island, Middletown and Albany upstate. He believes that most employees may be relocated to Melville temporarily but there isn't room there for all.

All claims record for customers are in other locations, but many of the company's online capabilities were run out of the World Trade Center offices.


Empire Blue Cross Blue Shield -- 1-866-761-8265

Morgan Stanley -- 1-888-883-4391

Aon Corp 1-866-256-4154

American Airlines 1-800-245-0999

United Airlines 1-800-932-8555

Pentagon 1-877-663-6772

The towers included offices for many prominent investment banks including Credit Suisse First Boston, Morgan Stanley (MWD: unchanged at $48.90, Research, Estimates), Keefe, Bruyette & Woods and Cantor Fitzgerald.

Victoria Harmon, spokeswoman for CSFB, said the offices there had about 800 employees, and that she was not aware yet of how many might have been hurt or killed in the blast.

Cantor Fitzgerald -- 1-866-326-3188

The World Trade Center offices were not the company's main offices and handled mainly back-office functions. Many employees from the center made it up to CSFB offices in Midtown Manhattan after the blast, she said.

"We're trying to figure out where they're going tomorrow," she said. "I don't know the answer to that yet."

Morgan Stanley also has its main offices elsewhere in Manhattan, but it was the largest tenants in the center in terms of floor space, with about 3,500 employees based there spread over 22 floors in Tower 2 and three floors at Five World Trade Center, a smaller building in the complex.

Morgan Stanley CEO Philip Purcell issued a statement saying that the firm had limited information about the status of its employees, and set up a call center to collect information from employees. The number for them to call is 1-888-883-4391.

Keefe Bruyette & Woods, an investment bank serving primarily the banking industry, and Cantor Fitzgerald, a leading fixed-income trading firm, both had their main offices in the towers. Executives with those firms could not be reached for comment Tuesday.

Chicago-based Aon Corp. (AOC: Research, Estimates), the world's largest insurance brokerage and consulting company, had about 1,100 employees on 7 floors in the center. A company spokesman said the company was still calling as many employees as it could to try to learn their status, and had also set up a call-in number � 866-256-4154, for employees to call.

Germany's Commerzbank, Deutsche Bank AG, and market data firm Thomson Financial, a unit of Thomson Corp., also have offices in the complex.

"We have two to three hundred people who work in that building and we have not been able to account for them due to communication failure," a senior Thomson executive in London told Reuters.

At another firm with offices at the World Trade Center, Alger Capital Management Vice Chairman James Connelly said that the company's chairman, Fred Alger, is alive and in Long Island, but that he hadn't heard from a majority of the people who worked at company's Trade Center office. Retail broker Charles Schwab also had offices in the center.

Key government agencies also affected

Many government agencies of importance to business had New York offices in the building, including the Securities and Exchange Commission and the Port Authority of New York and New Jersey, a bi-state agency that runs both the region's airports as well as its shipping ports.

The Port Authority actually built and owned the World Trade Center.

The Port Authority leased the 427,000 square feet of retail in the World Trade Center for 99 years to Westfield America Inc. (WEA: Research, Estimates), a real estate investment trust. Executives with Los Angeles-based Westfield could not be reached for comment Tuesday.

New York real estate investment firm Silverstein Properties won the 99-year lease for the office space portion of the center at the same time Westfield won the retail lease. Officials with Silverstein also were not available for comment Tuesday.

Reuters contributed to this report

September 11, 2001, CNN News, "World Trade Center: A city in towers,"


September 11, 2001

The Twin Towers of the World Trade Center housed the offices of more than 430 businesses from 26 countries.

Around 50,000 people worked in the complex that was home to stores, restaurants, international business and hotels. Tens of thousands more people visited the complex every day.

Most of the World Trade Center's commercial tenants were involved in banking and finance, insurance, transportation, import and export, customs brokerage and trade association. There also were representatives of foreign governments.

The World Trade Center complex comprised seven buildings, including One and Two World Trade Center (the Twin Towers), Four and Five World Trade Center, and a mall with thousands of feet of retail space.

The 22-story World Trade Center Marriott Hotel, the eight-story U.S. Customshouse, and Seven World Trade Center -- a 47-story office building -- also are part of the complex.

Among the tenants of the Twin Towers were The Port Authority of New York and New Jersey, which had offices on the 67th and 68th floors. Empire Blue and Cross Blue Shield, an insurance company, occupied 10 floors, and Sun Microsystems leased two floors.

Dow Jones Markets, a provider of news and market information, had two floors and Oppenheimer Funds Inc., leased four floors.

Other tenants included The World Trade Institute, Aon Risk Services Inc., and financial services company Exco Noonan Inc.

More than 70 stores and restaurants were located there, from the famous Windows on the World at the top of One World Trade Center to Ben & Jerry's and Godiva Chocolates in the center's mall.

Labels: reference to Exco Noonan Inc. at WTC

September 12, 2001, Washington Post, "An Icon of Capitalism: 'Now It's All Gone' World's 5th-Tallest Buildings Housed Offices, Retail Shops," by Greg Schneider and David S. Hilzenrath, Washington Post Staff Writer

For three decades the twin towers of New York's World Trade Center stood as the symbol of American economic might, as powerful an icon for capitalism as the Statue of Liberty is for freedom.

The two 110-story buildings defined the Manhattan skyline at the turn of the millennium the way the Empire State Building did in an earlier era. But their presence was more than symbolic.

The complex was a city within a city, with 50,000 workers and 150,000 others passing through on a typical workday. It represented one-tenth of all office space in Lower Manhattan.

Scores of corporations had offices there, including financial services giant Morgan Stanley Dean Witter & Co., the biggest single tenant, with one-eighth of the space in the south tower.

The complex was a major home to the insurance companies Empire HealthChoice Inc. and Marsh USA Inc., the law offices of Sidley Austin Brown & Wood, and Cantor Fitzgerald Securities. It was also a top tourist draw, with observation decks, a simulated helicopter tour of Manhattan and a famous restaurant, Windows on the World.

"The twin towers stood for America in the same way that Big Ben stands for England," said Angus Kress Gillespie, author of the 1999 book "Twin Towers: The Life of New York City's World Trade Center."

"If you're trying to poke America in the eye, this is the way to do it."

When terrorists tried to bring the buildings down in 1993 by planting bombs in a parking garage beneath them, the business world reeled at the notion that it could be the target of a new kind of war. That bombing killed six people and injured more than 1,000, but after extensive renovations -- and with greatly increased security -- the towers reopened.

"Some people I know never went back again, or they couldn't get back into an elevator again," said Neil Lagala, who survived the 1993 bombing and continued working there for six years as an engineer with the Port Authority of New York and New Jersey.

"I did have a feeling way back in my mind that we were still a target -- these guys didn't finish the job, and I felt they would make an example of the trade center . . . but everybody felt that they shouldn't give in to the terrorists."

Just two months ago, two real estate companies, Silverstein Properties of New York and Westfield America of Los Angeles, won a bidding contest to lease the towers and their underground mall from the Port Authority for 99 years at a price of $3.25 billion. The authority had rejected earlier overtures from would-be buyers.

The World Trade Center was more than an American phenomenon; it was also what its name suggested -- a concentration of commercial forces from around the world. It housed banks from Germany, Japan, Chile and Taiwan; investment companies from Asia, Europe, South America; and even the China Chamber of Commerce.

The Royal Thai Embassy had three offices in one tower and managed to track down all 20 of its employees yesterday. All were safe, but two were hospitalized. "We're just relieved to have located them," Ambassador Tej Bunnag said. "But the shock hasn't gone away."

Officials from other tenants spent the day wracked with uncertainty.

Empire HealthChoice, which provides health insurance to thousands of New Yorkers under BlueCross/BlueShield, had 4,200 employees on several floors in one tower. Empire's other facilities in Albany, Staten Island and Long Island were transformed into emergency call centers in an effort to contact employees.

Morgan Stanley had about 3,500 people in its World Trade Center offices, with more than two-thirds of them in the south tower. Chairman Philip Purcell said in a message on the company's Web site that he had "limited information" about the fate of the employees. But he added that "in spite of this tragedy, all of our businesses are functioning and will continue to function."

A spokesman for RLI Insurance Co., based in Peoria, Ill., said all five of the employees who worked for the company at its corner office on the 80th floor of the north tower were accounted for and unhurt.

"The three people who were there grabbed their briefcases and ran down the stairwell," spokesman Mike Quine said. "Skip Orza, one of our vice presidents, found one of the World Trade Center's maintenance men lying on the stairs, burned. He helped him get out of the building. . . . We do a lot of business with folks in the south tower, though, and we think a lot of them are dead."

Rockville-based Weisenberger, a Thomson Financial company, has accounted for all 10 of its employees at 195 Broadway, which is "right in the shadow of the World Trade Center," said a shaken-sounding William Chambers, the company's president.

The twin towers, developed by the Port Authority, supplanted the Empire State Building as the world's tallest buildings when they were dedicated in 1973. They held the title until Chicago's Sears Tower claimed it the following year. Before yesterday, they were the world's fifth-tallest.

Construction began in the late 1960s, and the first of the towers opened in 1970. President Richard Nixon sent a message for the 1973 ribbon-cutting.

The towers cost $1.1 billion to build, according to Eric Darton, author of "Divided We Stand: A Biography of New York's World Trade Center."

The center quickly became a magnet for publicity seekers. In 1974, a French high-wire artist strung a tightrope between the towers for an aerial performance. In 1975, a man jumped off, opened a parachute and drifted to a safe landing.

Darton said yesterday that the destruction of the landmark "reminded me of the Hindenburg tragedy -- how something that appears to be so solid could be so unsubstantial, ultimately."

"It was an excellent target to impact the maximum amount of psychological trauma," he said.

Few could grasp the fact that such a hole was so violently ripped in the city's commercial heart.

"It's a beautiful area, actually -- the Financial Center and the river. It was a beautiful area. Now you look at it today and there's nothing there. It's unbelievable," said Lagala, the former Port Authority engineer. "I saw when those buildings were being built, I could see them from my home. And now it's all gone."

The Empire State Building is once again the tallest building in New York.

Staff writers Sandra Fleishman, Renae Merle, Ellen McCarthy, Carrie Johnson, Daniela Deane, Kathleen Day, Amy Joyce and Steven Pearlstein contributed to this report.  © 2001 The Washington Post Company

May/June 2003, Information Management Journal, "A disaster plan in action: How a law firm in the World Trade Center survived 9/11 with vital records and employees intact," by Jean Barr,

When two planes slammed into the World Trade Center (WTC) buildings on September 11, 2001 (9/11), the law firm Sidley Austin Brown & Wood LLP (SAB&W) was hit directly. The firm occupied floors 54 through 59 in the North Tower, the building hit first. Within the first hour of hearing the news in the main office in Chicago, the firm's disaster recovery plan was pulled from shelves, copied, and distributed to key supervisory personnel and management committee lawyers.

Just five months earlier, SAB&W was formed through the merger of Sidley & Austin and Brown & Wood to become a single multinational firm with 1,500 lawyers and more than 3,000 total personnel working in 14 offices in six countries. In New York on 9/11,approximately 600 people were assigned to the WTC offices and 400 to the office on Third Avenue in midtown Manhattan.

The firm was in the process of consolidating the different systems - manual and automated - from both firms, as each had its own network with different hubs, as well as two different e-mail systems (Outlook and Lotus Notes), document management systems (iManage and PCDocs), and telephone systems. The systems consolidation was just beginning, with September 30 and December 31 being the next target dates for many system changes.

Although all client/matter numbers were changed in a data conversion in May 2001, several more data conversions were planned, with the final data consolidation in the records departments scheduled for September 15-17. This involved changing all barcoded folder numbers for the former Brown & Wood's 300,000 folders, as this was far less than the former Sidley & Austin's 2 million folders.

Protecting Vital Records

When the disaster recovery plan was instituted, the first documents needed were contact lists: employees' home and emergency phone numbers, vendor lists, and client lists. Of greatest concern was the safety of the firm's employees. Human resources personnel in the Chicago office began calling all New York employees, and by the next morning, all but a handful were accounted for. By September 13, only one individual had not been located.

The emphasis on communication continued throughout the day on 9/11 and for several weeks afterward. Bulletins were posted on the firm's Internet site,, and the management committee sent internal e-mails to all personnel. A quick decision was made on 9/11 to staff the switch-board for 48 hours with SAB&W operators between 11:00 p.m. and 7:00 a.m., instead of using an answering service. This was done in order to provide a live contact for anyone calling the firm. All New York calls were routed to Chicago, and the former weather hotline was changed to an emergency line to provide ongoing updates and information.

The timetable for many system consolidations was suddenly moved up two weeks, and backup tapes played a crucial role. The weekly backup tapes from all systems in the WTC were stored offsite in New Jersey, which turned out to be a propitious decision. These tapes were driven to Chicago, where the main servers reside and data consolidations would take place.

Meanwhile in New York, by the afternoon of 9/11 a partner had procured additional office space in the Third Avenue building to accommodate 600 additional people. The purchasing department got on the phone and bought new computers from Dell Systems to be delivered to the Third Avenue office. They also acquired used furniture for offices and hotel space in New York for out-of-town personnel and those unable to return home.

Some of the firm's vital records consisted of client, personnel, vendor and services lists, backup tapes, floor plans with personnel locations identified, inventory lists of equipment, furniture, and supplies, procedures manuals, docket calendars, and blank checks. Most of these were used in the days after 9/11. Some items were available because they were part of a planned dispersal in which they had been copied and sent offsite for safe keeping. Other items were part of an automatic dispersal plan.

Disaster Recovery

On Wednesday morning, September 12, the entire Chicago office met with the local management committee members. It was an unprecedented meeting everyone in the office attended. When it was announced that the firm's insurance policies had just been renewed and doubled on September 1, 2001, applause filled the room.The insurance policies not only covered reconstruction costs for the files but for the organization's valuable art collection and personal effects as well.

In New York, the Third Avenue office was operating with a skeleton staff and was officially closed. However, many lawyers were working at home, in client offices, or other locations. Behind the scenes, cabling in the new space started, and planning for temporary furniture, phones, and computers was taking place.

A broadcast e-mail was sent to other offices requesting that spare computers be identified and packed for shipment to New York.The backup tapes arrived in Chicago that Wednesday afternoon, and the restoration process began. By afternoon, voicemail accounts were being reconstrutted for New York personnel, and the server was being rebuilt for all accounts.

The next day, all New York lawyers had e-mail access again, although their accounts did not provide access to their complete mailboxes, which held many vital documents (often 1 gigabyte or more of mail per person).The backup tapes did not contain such extensive amounts of mail per person. By afternoon, it was determined that other backup tapes were in good condition and that other systems could be converted and restored. By Thursday evening, a secure extranet was established,and the previously scheduled records conversion begun.

On Friday morning, September 14, the document management system became available to everyone. By noon, equipment from other offices and personnel was arriving in rented cars and vans to assist in the setup of the temporary quarters. By evening, the financial systems were restored. Standard software was determined and loaded on rented and new PCs. Set up of the temporary quarters continued over the weekend while Chicago employees continued to convert and restore systems. An extraordinary effort on the part of many administrative staff members took place, with many individuals working around the clock.

In the records department, the data conversion was completed on schedule on Sunday, September 16, with only a few exceptions. The bigger challenge would come during the next months as lawyers requested, but did not always receive, files.The pre-9/11 refrain of "No, don't send that offsite" became "Please tell me you sent it offsite!" Any former Brown & Wood files returned from storage needed to have all labels changed before delivery to a lawyer, as they had to reflect the new client/matter numbers and folder bar codes.The most frequent request in the records department was for reports to determine what had been destroyed.

Almost one week after the disaster, on Monday morning, September 17, the New York office personnel met in the Waldorf Astoria hotel ballroom and were given new identification badges, assigned office locations, and phone numbers.While not everyone had a desk or computer set up, they at least knew they had a place to sit. Many individuals were sent home until the office became a bit more settled. Subsequently, almost everyone returned to work over the next few weeks and months.

Grading the Recovery Plan

How did the disaster recovery plan work? It worked well to a certain extent. The firm did have the right records listed as vital. This became clear within hours of the disaster.The recovery team members did work on their parts of the plan. Overall,communication became a much larger issue than anticipated, and everyone worked hard to make sure that it was ongoing and appropriate.

Some individuals listed as having supervisory roles in the disaster recovery plan ended up not having job assignments, which was frustrating to those sitting around on 9/11. Part of the problem stemmed from a lack of testing of the plan the year before.

Did the plan need fine tuning? Yes. Just as with every plan, some things could not have been anticipated, such as the massive shutdown of Manhattan and of air transportation. Since 9/11,the firm has reviewed and revised its disaster recovery plan.

Lessons Learned

Communication with personnel in the New York office and elsewhere, with clients, media, and vendors was the key immediately after the disaster. Communication made it possible to verify the safety of all employees in New York and Washington, D.C. The next priority was reassuring the rest of the firm and its clients that SAB&W was functioning. Use of the firm's Web site, news stories, switchboard, and a toll-free number all contributed to the ability to communicate.

The firm also learned the value of friends including clients, vendors, cocounsel, and even competitors. Gaining temporary office space in the same building where the midtown Manhattan office resided was crucial, as was the leasing of more permanent space three months later. Concern for the well being of the firm's employees was manifested in the Employee Assistance Plan counselors being onsite in the New York office for anyone who needed to talk.

Having the weekly computer backup tapes offsite in New Jersey turned out to be a fortuitous decision as the weekly tapes in New York could not be retrieved due to the lack of transportation and closure of the tunnels leading into Manhattan in the days following the attacks. In the future, SAB&W will store daily tapes outside metropolitan areas.

The emphasis in the firm continues to be on standard operating procedures, standard software and hardware, and network infrastructure to make it possible to quickly load new and rented computers. Custom software or hardware must wait until long after a disaster before it can be installed. Recovering e-mail and document management systems had to be the top priority in order for the firm to support its clients. Web access into the firm's systems became a necessity, not a luxury, for many lawyers and administrative personnel.

Keeping an updated insurance policy that includes adequate coverage for valuable papers and reconstruction costs is key. Having a records database enabled the firm to quickly determine the number of files destroyed and assisted in the quick receipt of insurance payouts. Within weeks of the disaster, the database was marked to show the destruction of more than 23,000 files.

Finally, the extraordinary effort by a multitude of people made the recovery a success. Many dedicated people from technicians to administrative staff - worked around the clock to re-establish offices, restore operations, and help SAB&W resume business.

Jean Barr, CRM, is RIM Manager at Sidley Austin Brown & Wood. She may be

Copyright Association of Records Managers and Administrators Inc. May/Jun 2003

Barr, Jean "A disaster plan in action: How a law firm in the World Trade Center survived 9/11 with vital records and employees intact". Information Management Journal. 09 Mar, 2011.

September 3, 2002, The American Lawyer, "Double Indemnity," by Alison Frankel,

Barry Ostrager, the Simpson Thacher & Bartlett litigation chief, is a big admirer of Herbert Wachtell. Really, he is. Big, big fan.

Never mind the adjectives he uses to describe the co-founder of Wachtell, Lipton, Rosen & Katz -- "obstreperous, obstructive and unreasonable." Forget the nasty accusations of witness manipulation that Ostrager has tossed at Wachtell Lipton partners in the World Trade Center insurance coverage litigation. Disregard Ostrager's amusement at what he calls the "feigned indignation" with which Wachtell has greeted the Simpson Thacher lawyer's tactics.

Put all that aside, Ostrager says. Focus instead on his great compliment to Herb Wachtell and his partners: But for Wachtell's ingenuity and persuasiveness, Ostrager says, there would be no World Trade Center insurance litigation. There would be no $3.55 billion dispute over the money owed to Wachtell's client, New York real estate developer Larry Silverstein, who signed a 99-year lease on the World Trade Center just two months before the attack on the towers. As Ostrager tells it, only a mind as brilliant as Wachtell's could have crafted a plausible argument that Silverstein is owed $7.1 billion, twice his ostensible policy limit, because the World Trade Center catastrophe constituted two discrete, insurable events, not one.

Of course, Ostrager's salute to Wachtell is just a tiny bit mitigated by his own role in the litigation. He is counsel to the Swiss Reinsurance Co., the carrier that underwrote about 22 percent -- $780 million -- of the Trade Center's insurance coverage. Swiss Re, like the rest of the 21 insurance companies battling Silverstein, is determined to prove that the Trade Center collapse constituted one occurrence under Silverstein's insurance coverage, not the two Silverstein claims.

The story of the Silverstein insurance program, assembled in the summer of 2001, is so far-fetched that any law professor who dreamed it up as a hypothetical would be laughed out of the classroom. Silverstein hired a well-known broker, Willis Group Holdings Ltd., to find enough coverage to satisfy his lenders. Willis scrambled mightily to place $3.55 billion in insurance, ultimately dealing pieces to 25 carriers. Negotiations were frenetic -- so frenetic that when Silverstein took over the lease of the Trade Center on July 24, 2001, he had in hand only temporary contracts from his insurers. Most of those had been executed on the basis of a sample form that Willis had circulated, a form that included a broad definition of what constituted an occurrence for insurance purposes. (The encompassing definition was designed by Willis to favor policyholders; the more damage that could be lumped into one occurrence, the fewer deductibles policyholders would have to pay.)

One key carrier, however, had refused to base negotiations on the Willis form. Travelers Indemnity Co. insisted on using its own form, which did not specifically define "occurrence," as the foundation of discussions about a final policy. Willis needed Travelers to stay in the deal, so Willis brokers spent August 2001 deep in negotiations with Travelers underwriters about changes proposed to the Travelers form. (These negotiations, interestingly, did not include discussion of the definition of "occurrence.") As of Sept. 11, Willis had not circulated final policies to any of the 25 carriers. Silverstein and Willis now say that all of the insurance companies should be held to the terms of the Travelers policy, which, in their lawyers' interpretation of New York state insurance law, leads to the conclusion that the Trade Center collapse constituted two occurrences. The insurers -- no surprise here -- say that the Willis form prevails.

What's more, asserts Ostrager, the Willis brokers who now support the Travelers scenario didn't always. Only after Wachtell Lipton lawyers got involved, Ostrager has said repeatedly in this litigation, did Willis witnesses convert to the story that favors Silverstein. Silverstein himself said as much, Ostrager argues, in a speech he delivered in December 2001 to the "CEO Summit" on Rebuilding Confidence in the U.S. Economy. "I had to find myself the best minds that I could find," Silverstein said, "to get me two events, to provide $7 billion." Those minds, in Ostrager's telling, belong to the Wachtell Lipton lawyers.

Ostrager is a slight 55-year-old with wavy, reddish hair and an insatiable appetite for competition; in his scant spare time he breeds racehorses. He graduated from New York University Law School 18 years after Herb Wachtell, and seems to be fairly frothing for confrontation with him. Ostrager has gone so far as to fling such phrases as "corruption of the discovery process" and "unconscionable interference by Wachtell" into a brief that accuses Wachtell Lipton lawyers of "exerting fantastic pressure" on Willis witnesses and "manipulating" their testimony.

Wachtell, who says that the evidence disproves the very thesis of Ostrager's accusations, responds to the Simpson Thacher lawyer with characteristic irascibility. When his partner Meyer Koplow calls Ostrager's attack "laughable," Wachtell cuts in. "It's not laughable," he says.

Wachtell, 70, is not a physically intimidating man. He has long, slicked-back gray hair, a thin, red face and piercing eyes. He wears half-frame glasses low on his nose. Yet somehow he is fearsome. "I don't like to see my partners accused of suborning perjury," he fumes. Ostrager, he says, is litigating this case with reckless aggressiveness. "He likes to distort facts," says Wachtell. "I am mightily pissed."

So far Ostrager is winning. The insurers have beaten Silverstein on almost every significant pretrial motion in the case, including a summary judgment motion by Wachtell that was denied. That's all just prelude, however. The judge in the case, John Martin Jr. of Manhattan federal district court, has appointed another federal judge, Lewis Kaplan, to oversee settlement talks this fall. If they fail, Ostrager and Wachtell will meet in court in November to try this case. Barry Ostrager will be looking to topple Wachtell. Herb Wachtell will be trying to put the Simpson Thacher lawyer in his place. And one of their clients will walk away hundreds of millions of dollars richer.

Larry Silverstein is Herb Wachtell's oldest friend. They met as teen-agers, at New York City's High School of Music & Art, where they both played piano. At New York University, both played in the band, Silverstein on drums and Wachtell on clarinet. They stayed close enough over the years that Silverstein had dinner at Wachtell's house the Friday before Sept. 11. Silverstein didn't use Wachtell Lipton as his regular lawyers -- Skadden, Arps, Slate, Meagher & Flom and Stroock & Stroock & Lavan routinely represented him -- but when he split from his business partner (and brother-in-law), Wachtell and his partners negotiated the breakup.

On Sept. 13, two days after the towers fell, Silverstein called Martin Lipton, also a close friend and a fellow NYU trustee, to ask if Lipton thought he'd need legal advice. "Marty said, 'And how,'" says Wachtell. " hadn't thought through the scope of all the legal problems he could be facing. They'd lost four people from a small office. They were all traumatized." Silverstein arranged to come to Wachtell Lipton's offices later that afternoon.

Before he arrived, though, Wachtell had to figure out whether the firm could represent Silverstein beyond this emergency counseling session. "This would be a mammoth drain on firm resources," says Wachtell, who heads a litigation department of 53 lawyers, almost half of whom have become involved in the World Trade Center litigation. "It was a firm issue -- could we afford to take this on?" Wachtell Lipton's midtown Manhattan offices were in turmoil on Sept. 13. Some investment bankers from Keefe, Bruyette & Woods Inc., which had its offices in the World Trade Center, had been at a meeting at Wachtell Lipton when the planes hit the towers; the law firm volunteered to provide the Keefe Bruyette survivors (as well as some other lower Manhattan refugees) with a temporary headquarters. People were walking around carrying computers and phones for the guests. Wachtell Lipton lawyers were still in shock; collectively, they knew dozens of Trade Center victims. Many lawyers weren't even in the office. Herb Wachtell rounded up all of the partners who were around for an impromptu firm meeting. "We decided to do it for two reasons," he says. "Larry is my closest and oldest friend. And this was a civic thing -- we felt an obligation to be involved in the rebuilding of the city."

Silverstein, according to Wachtell Lipton partner Eric Roth, didn't stay long at Wachtell Lipton's offices on Sept. 13. Wachtell recalls talking briefly with Silverstein about several potential issues, including insurance. As it happened, Wachtell Lipton had argued an insurance coverage case in the New York Court of Appeals a week earlier (Simpson Thacher partner Mary Kay Vyskocil argued against him; Wachtell Lipton eventually won). He told Silverstein that, in his opinion, unless the insurance policy clearly stated otherwise, New York's laws would define the terrorist attacks as two occurrences, two insurable events.

But at that point, Silverstein's lawyers didn't know what the insurance policy said. Silverstein had already been in touch with John Gross, a partner at Proskauer Rose who specializes in insurance coverage. On Saturday the 15th, Gross and the Wachtell Lipton lawyers talked for the first time. "We had no idea what had happened," says Gross. "We were new counsel, we had not participated in the placement. I suggested we go meet with the Willis people and find out what was going on." Roth agreed: "We had to go meet with Willis."

Willis Group Holdings Limited is a giant insurance broker, specializing in coverage for big commercial properties. Even by Willis standards, though, the World Trade Center insurance program was huge. The Port Authority of New York and New Jersey, which finished building the complex in 1972, carried only $1.5 billion (per occurrence) in coverage on all of its buildings, which, in addition to the Trade Center, included the three New York City area airports. Silverstein's lenders insisted on more coverage, first demanding $2.3 billion, then $3.2 billion, and then, right before the lease deal closed, $3.55 billion. The lead Willis broker on the insurance placement, Timothy Boyd, and his team hustled in June and July to satisfy the lenders, contacting carriers in the United States, Europe and Bermuda to place coverage. Willis distributed to many, but not all, of the carriers underwriting packets that featured not only the risk analysis documentation on the World Trade Center, but also a 37-page sample property insurance policy that Willis had developed, a form called the WilProp 2000. The WilProp form included a specific definition of occurrence, one designed to minimize deductibles for policyholders: "all losses or damage that are attributable directly or indirectly to one cause or to one series of similar causes."

The goal in multicarrier property insurance deals is to get all of the insurers to agree to issue the same final policy, so that there are no gaps in coverage. Carriers with smaller shares of the coverage frequently defer to the policy demands of bigger insurers, however, so brokers don't expect to negotiate final policy language with all (or even most) carriers. In the World Trade Center program, for instance, no negotiations took place with the London insurance syndicates, which actually, at the time they agreed to provide coverage, waived the right to sign off on final policy wording. Moreover, insurers typically issue temporary contracts binding them to provide coverage before they finish negotiating final policy language. Usually there's plenty of time to reconcile policies after the binders come in.

Distilling facts from the frenzied discussions that took place between Willis brokers and insurance company underwriters in July 2001 is no easy task, especially now. Willis broker Boyd testified that he didn't expect carriers simply to accept the WilProp sample form, but considered it a starting point for negotiations. Swiss Re seems to have regarded it the same way. Underwriter Daniel Bollier agreed on July 9 to carry about 22 percent of all layers of coverage beyond the first $10 million, but he told Willis broker Paul Blackmore that he wanted changes in the sublimit language in the WilProp form. (Bollier was satisfied with the WilProp occurrence definition and did not attempt to negotiate changes to it.) Other carriers also seemed to expect negotiations of final policy language; only two Bermudan insurers, ACE Ltd. and XL Capital Ltd., specifically referred to the WilProp form in their binders.

Before the lease deal closing, Willis issued certificates of insurance to Silverstein, confirming to his lenders and to The Port Authority that he had sufficient coverage. His 99-year lease, for which Silverstein put up only $14 million of his own money, closed on July 24. Willis broker Boyd, however, still had work to do. One carrier, Travelers, had informed Boyd that if Travelers was to participate in the primary layer of coverage, it would have to be on the basis of its form, not the WilProp form. Boyd had tried to find a substitute carrier with as high a rating as Travelers, but the market for World Trade Center insurance was saturated.

So in late July, Boyd began serious discussions with Travelers underwriter James Coyle III about what the final Travelers policy would say.

There is no dispute that Coyle first sent Boyd the Travelers sample policy on July 11. But what did Boyd and the rest of the Willis brokers tell the other carriers about the Travelers form? On this critical question, the accounts of the Willis brokers and insurance company underwriters diverge drastically.

If the case ever goes to trial, one of the key issues will be the exchanges between London broker Blackmore and Swiss Re underwriter Daniel Bollier. Blackmore testified that sometime between July 17 and 23, he told Swiss Re underwriter Bollier that WilProp had been replaced by Travelers; on July 23 his assistant e-mailed the Travelers form to Swiss Re. But Bollier swore he remembered no conversation with Blackmore about the Travelers form. He said he paid little attention to the e-mail attachment, which arrived without a note advising that Travelers was replacing WilProp. Timothy Boyd of Willis testified that he specifically informed underwriters at eight other insurance companies that Travelers would be the primary form; notes in the files of at least three carriers indicate that their underwriters had been told. But most of the carriers deny that anyone from Willis ever told them Travelers was replacing WilProp.

At the end of August, Coyle of Travelers sent Willis' Boyd a draft policy that included the changes they'd discussed. The Travelers policy did not define occurrence, leaving the interpretation to state law. Boyd, who did negotiate the wording of Travelers' deductibles clause, never attempted to add Willis' occurrence definition to the Travelers form. On that point, he deferred to Travelers. Boyd looked over what Coyle had sent him at the end of August, but didn't respond. Labor Day weekend arrived, and there didn't seem to be any rush.

Sept. 11 found most of the brokers on the Willis World Trade Center team in Nashville, at a previously scheduled meeting of Willis' property insurance group. Like the rest of the country, they watched the television in horror. With planes grounded, the brokers were marooned in Nashville, without their paperwork. Inevitably, they began the debate: Was the attack one occurrence or two?

Willis' counsel, Stuart Gerson of New York's Epstein Becker & Green, insists that these conversations were informal and purely hypothetical. Nevertheless, when Timothy Boyd, the lead broker on the World Trade Center program, called Willis' London office as he tried to reassemble the Silverstein documents, he told London staffers, according to the notes of one, "In their opinion this is one occurrence." (Both Boyd and the London staffer testified that they did not recall the conversation.) Another broker said something similar to Swiss Re's Daniel Bollier, according to Bollier's testimony. Silverstein's own risk manager hurriedly faxed a copy of portions of the WilProp form to a lawyer for The Port Authority with a cover note: "FYI the 'occurrence' definition and the insuring agreement and the exclusions in the Willis policy that we are working with." Several hours later he sent the same materials to one of Silverstein's lenders.

At the same time, however, Boyd was working with Jim Coyle of Travelers to get a final policy issued. Coyle agreed to send Boyd a policy that reflected the state of their negotiations as of Sept. 10. On Friday, Sept. 14, Travelers faxed a final policy -- which included no definition of "occurrence" -- to Willis' temporary headquarters in New Jersey. From there, Willis faxed it to Wachtell's offices.

"We were told two things," says Wachtell, "that the Travelers form was the governing form; and that they wanted to disseminate the policy to the marketplace. We said, 'No! You may not send it out until we can confirm the facts.'" Silverstein's lawyers pressed the Willis team for interviews with the brokers. Willis senior executives agreed that John Gross of Proskauer and Eric Roth and Marc Wolinsky of Wachtell Lipton could come to New Jersey on Monday, Sept. 17, to talk to the brokers.

Over the weekend, Gross and the Wachtell Lipton lawyers studied the documents Willis had sent them. Gross is as emphatic as Wachtell about the implications of the Travelers policy. Since it didn't specifically define "occurrence," the definition was left to state law. And under New York state law, Gross asserts, the attack on the twin towers constituted two occurrences. "I knew it without even going to the books," he says. But did the Travelers policy govern the World Trade Center insurance coverage? Gross and the Wachtell Lipton lawyers say that they got their answer in their interview with the Willis broker Timothy Boyd on Monday, Sept. 17.

If Barry Ostrager's theory -- that Wachtell concocted the Travelers policy scenario -- was correct, the "fantastic pressure" that Wachtell supposedly exerted on the Willis witnesses would have had to have begun during those Sept. 17 meetings, as the lawyers and brokers figured out what to tell the insurance market about the governing policy. Willis is a sophisticated company, so, naturally, its brokers were represented by their own lawyer at these initial interviews with Silverstein's counsel. Sitting at the head of the table as Roth, Gross and Wolinsky questioned Willis witnesses was a lawyer named Andrew Amer, from the firm that is Willis' longtime outside counsel: Simpson Thacher. Amer is a partner in the department headed by Barry Ostrager.

Amer, who declined to comment, presumably heard the Willis witnesses tell Silverstein's lawyers that the Travelers policy governed the World Trade Center coverage. He said as much in a Sept. 20 e-mail to Eric Roth, confirming that Willis believed that coverage was based on the Travelers form. "We await your approval to distribute the policy to the market," Amer wrote.

So how could Ostrager later assert that Wachtell was pushing to get the Travelers policy out, that Wachtell Lipton lawyers were manipulating Willis witnesses to tell a story that favored Silverstein? Ostrager says he never talked to Amer about those meetings. To protect Willis' attorney-client privilege, he says, Simpson Thacher -- which had informed Willis from the start that it would be representing a carrier in the litigation -- erected a wall between Amer and the lawyers representing Swiss Re. When Ostrager wrote the brief accusing Wachtell of "unconscionable interference" and "corruption of the discovery process," he based his accusation on notes Travelers underwriter Coyle took during a post-Sept. 11 conversation with Willis broker Boyd in which Boyd complained about feeling so much pressure from the lawyers that he was thinking of quitting. The comment later turned out, however, to have been a reference to Willis in-house lawyers, pressing Boyd to produce documents.

Epstein Becker's Gerson, the lawyer who replaced Amer soon after those initial meetings, also rejects any suggestion that Willis witnesses were coerced, in the Sept. 17 meeting with Wachtell Lipton lawyers or in any meeting after that. "I have been at every single prep session," Gerson says. "There has been no pressure of any kind put on any Willis witness by anyone at Wachtell. I wouldn't let that happen. I am not a potted plant."

Ostrager says he never meant to suggest that Wachtell Lipton lawyers had suborned perjury, merely that in hours of preparing Willis witnesses for deposition, Wachtell Lipton partners had subtly shaped their recollections and perspectives. (Willis, insurance lawyers have noted in court, may be concerned about the possibility of Silverstein suing the brokerage for malpractice.) Immediately after Boyd's deposition testimony about pressure from lawyers, Ostrager did notify Judge Martin that Boyd had been referring to in-house lawyers, not Wachtell; and he did tell the judge in a letter and in court that he wasn't accusing Wachtell of impropriety. But he didn't withdraw his brief. And he doesn't believe that Wachtell is as indignant about his tactics as Wachtell says he is. In a deposition of Blackmore, Ostrager told Wachtell that he was going to call the judge if Wachtell didn't stop interrupting his questions. "If you want to be a litigator," Wachtell retorted, "don't be so thin-skinned every time you get an objection." Says Ostrager: "That applies in spades to him. want to be aggressive, but, like any bully, they don't want to be punched back."

Ostrager came into the World Trade Center insurance case at around the same time Wachtell did, within two days of the collapse of the towers. Swiss Re wasn't necessarily expecting litigation, Ostrager says, but retained him "as a matter of prudence." As Willis circulated the Sept. 14 Travelers policy to the other insurance companies, Swiss Re's prudence proved justified. Swiss Re, as well as a host of other carriers, notified Willis that they'd bound coverage on the basis of the WilProp form, and had never agreed to substitute the Travelers form at all. The Travelers policy, they said, wasn't their policy; many said that the Willis notice was the first they'd heard of it.

For a few weeks, Ostrager and his second-in-command, Mary Kay Vyskocil, let Silverstein set the course of the case. The real estate developer badly wanted to begin collecting the business interruption portion of his insurance, so that he could continue making payments to his lenders and his landlord, The Port Authority. Wachtell urged a meeting between Silverstein and the insurers. Willis executives organized a session on Oct. 2 at Manhattan's Metropolitan Club. "I thought it would be helpful if Larry could talk to them, let them see him in the flesh, show them he was not trying to get a windfall," Wachtell says. "We told them we understood there was a difference of opinion on occurrence, but we had to get the business interruption insurance going. Larry said, 'We ought to be sitting down and talking.' He was met with dead silence."

Ostrager regarded the meeting as a turning point. "I knew what was going on in that Oct. 2 meeting," Ostrager says. Silverstein wanted the business interruption cash, Ostrager says, to fund his two-occurrence litigation. "It was transparent and self-evident," Ostrager says. "I knew to a moral certainty that Silverstein was going to use the business interruption money> to initiate a declaratory judgment action against the insurers." So Ostrager and Vyskocil grabbed control of the litigation. On Oct. 22 they filed, on behalf of Swiss Re, a complaint for a declaratory judgment against Silverstein, asking the court to hold that the Trade Center disaster was, for insurance purposes, one occurrence. Ostrager admits that not all of the other insurers were happy about his suit. "There was a band of reactions ranging from 'We would have wanted to participate' to 'We would have appreciated it if you had consulted us,'" he says.

The Silverstein side portrays Ostrager as a litigation outlaw, infuriating the other insurers with overly aggressive tactics, starting with that declaratory judgment action. Lawyers for most of the other major insurers declined to comment publicly but insist privately that all of the insurers are working together. "There's a high level of cooperation," says Travelers counsel Harvey Kurzweil of New York's Dewey Ballantine, who, along with his partner Saul Morgenstern, has become a spokesman for the other insurers. "We've put on a remarkably cohesive, coordinated." And a successful one, so far. Though Ostrager has sometimes been alone at the extremes of the case, the insurance lawyers have united on major motions. As Ostrager had predicted, in January, Silverstein did file suit against all of the insurers, seeking a summary judgment against Travelers. Gross and the Wachtell Lipton team asked Judge Martin for a ruling that, as a matter of law, the World Trade Center disaster constituted two occurrences under the Travelers policy. Martin denied Wachtell's summary judgment motion, and, on another heavily litigated pre-trial issue, granted the insurers' motion to compel testimony from the Willis witnesses about their meetings with Wachtell.

Judge Martin seems eager for the case to settle, and has appointed federal Judge Lewis Kaplan to oversee talks, the first since a few utterly fruitless sessions late last fall. (Silverstein did settle with the two Bermudan insurance companies that explicitly mentioned the WilProp form in their binders. Those insurers agreed to pay, in cash, their policy limits for one occurrence, a total of about $350 million.) Proskauer's John Gross is still hoping for a deal; after all, if Silverstein can get anything more than his $3.55 billion one-occurrence limit, he's won. (Silverstein has stated repeatedly that he intends to use the insurance money to rebuild lower Manhattan.) Harvey Kurzweil says that Travelers and the other insurers would participate in talks; he is one of four insurance lawyers who was scheduled to meet with Wachtell Lipton partner Meyer Koplow in late August. Ostrager was also supposed to participate. One senses his heart wouldn't be in it, though. There's only one place Ostrager wants to be on Nov. 4: in Judge Martin's courtroom, picking a jury of New Yorkers whose votes he and Herb Wachtell can fight for.

November 29, 1987,. New York Times, "New York State Offices; The Tainted Move From the World Trade Center," by Mark McCain,

AS New York State nears the end of its colossal move of agencies from the World Trade Center, a former official is standing trial on bribery charges, while relocated employees are complaining of leaky pipes, frontier locations and excessive rents.

More than 40 state departments, commissions and boards are now scattered across the five boroughs - in converted factory structures, old department stores and office projects of all ages. The exodus, which began four years ago, ''is essentially complete,'' said John C. Egan, the state's Commissioner of General Services. ''The major components are done.''

Some agencies are doing well in new settings - like Fordham Plaza, a Bronx office tower, which may help breathe life into abandoned buildings and empty lots nearby.

But in other cases, like a converted loft building at 400 Broome Street in Manhattan, crumbling interiors and reported corruption have conspired against state departments that now operate in leased space negotiated by the Department of General Services.

''Consultants who could telephone acquaintances in government appear to have been more useful in lease negotiations than a solid foundation or a water-tight roof,'' the state's Commission of Investigation noted last year in a report on the move from 57 floors of the World Trade Center.

In the wake of such accusations, three men are now on trial in State Supreme Court: Joseph Siggia, the former director of the state relocation task force; Harry C. Partridge 3d, a property owner, and Paul Adler, a consultant to Mr. Partridge.

They are charged with defrauding the state in the selection and renovation of 400 Broome Street, an eight-story building on the corner of Centre Street. Mr. Siggia and Mr. Partridge also are charged with bribery and perjury.

Beyond that particular building, however, the Commission of Investigation found a pattern of ''seriously deficient'' leasing procedures. Those deficiencies, it said, encouraged misconduct such as questionable payments to individuals who helped put state offices into the former Gertz Department Store at 162-10 Jamaica Avenue in Queens.

On a drizzly day two months ago, more than 500 government workers picketed outside to protest what they alleged to be improper asbestos removal and other problems within the building, now called Gertz Plaza. Two years ago, the Department of Social Services and several other agencies moved into four 50,000-square-foot floors.

''It's a terrible building,'' said Edward F. Ott, assistant to the president of the New York State Public Employees Federation, which represents about 16,000 state workers in New York City.

''It is poorly laid out and the rehabilitation was second-rate.''

But Commissioner Egan defended Gertz Plaza and what he called the overall success of move from the World Trade Center to 24 other locations. ''We always have concerns -and problems that need to be ironed out,'' he said. ''On balance, though, this has been a positive program from a good government perspective. We are taking the lead in parts of the city where government offices will be the catalyst for other improvements.''

The state had a similar goal in the late 1960's when it moved into the World Trade Center - then viewed as a distant outpost of Wall Street. This time around, however, state agencies have ventured even farther out.

For most of this decade, Fulton Landing on the East River in Brooklyn has carried high hopes of parks, retail arcades and grandly restored and converted industrial buildings. But so far, the only sign of change is the daily arrival of more than 600 employees of the state's Department of Labor, which took a 10-year lease on the Clocktower Building at 1 Main Street last year.

''You can't even buy a comb in the area -let alone cash a paycheck,'' said Mr. Ott. ''And transportation is horrible. There's a shuttle bus from downtown Brooklyn, but it's unpredictable, and when it stops at 7 P.M., there's no way out of the area. Our people are professionals, but they can't stay late.''

The isolation also creates problems for people who have to visit the Department of Labor offices.

''It's unfathomable to me,'' said Joseph Scacalossi, a department employee, ''that they chose this location for a department that has a thousand members of the public coming by every day. And the rent of $20 a foot -about $5 million a year - is outrageous when you look across the street and see unimproved space for $5 a foot.''

The higher rent, said Barry Gosin, a co-owner of the building, reflects the renovation work, the shuttle bus and other costs that makes the building more expensive to operate than neighboring industrial buildings.

''It's one of the nicest buildings the state is in - and probably the only one with elevators made out of teak,'' Mr. Gosin said. ''It's a bit of a pioneering effort, but if the city and state don't forge a strong position in the outer boroughs, who will?''

In its push to the boroughs beyond Manhattan, however, the state did a dismal job of selecting sites and negotiating rents, according to the Commission of Investigation.

''In fact, ill-defined or carelessly implemented procedures appeared to be the rule in the World Trade Center move-out,'' it reported. ''No genuine method was evident in the agency's . . . evaluation of competing buildings or its negotiations of final lease terms.''

BUILDINGS like 400 Broome Street, for which the state pays a base rent of $26 per square foot, rank near the bottom of the success chart. ''At least, though, they've finally fixed the piping that was leaking all over us,'' said Cynthia Doyle, a utility hearing specialist for the Department of Public Service.

Other buildings have suffered lesser ailments - things that could be expected during the early months after a move. ''We often have to dial two or three times to get a call out,'' said Ken Robertson, a research scientist with the Division of Substance Abuse Services, one of the agencies that moved into an office tower at 55 West 125th Street, near Lenox Avenue, last December.

A few state departments still remain within the World Trade Center, but their days a numbered. From a high of about 2.3 million square feet, the state now rents 513,000 square feet of space in the twin towers.

Next Friday, several agencies including the Department of Taxation and Finance will begin moving into eight 20,000-square-foot floors at 80 Maiden Lane, a 75-year-old office building in downtown Manhattan.

The bulk of the agency's operations, however, will be transferred into a former Y.M.C.A. building at 55 Hanson Place in Brooklyn, two blocks south of Fort Greene Park, once renovations are finished late next year.

Remarkably, neither the costs nor the benefits of the World Trade Center move-out can be accurately assessed, according to an audit earlier this year by the state Legislative Commission on Expenditure Review.

No state agency ''was assigned responsibility for accumulating the information on costs,'' it noted. ''This is also true of the benefits, even though the development of (economically depressed) areas was one of the primary reasons given for the relocation.''

Photos of Clocktower Building at 1 Main Street in Brooklyn, leased by Department of Labor; Gertz Plaza, former Gertz Department Store, on Jamaica Avenue in Queens (NYT/Marilynn K. Yee; Ray Stubblebine)Labels: NYS had 57 floors in WTC2

Label: NYS Department of Taxation and Finance

May 4, 1988, PR Newswire, "Dravo completes sales of Gibbs & Hill, Dravo Engineering companies,"

PITTSBURGH, May 4 /PRNewswire/ -- Dravo Corporation (NYSE: DRV) reported today that it has completed the sales of Gibbs & Hill, Inc. and the Atlanta-based organization of Dravo Engineering Companies, Inc.

As indicated in previous announcements, the respective purchasers of the two businesses are  Hill International Corporation of Willingboro, N.J., and Sandwell Swan Wooster Inc., an engineering firm operating from Atlanta and Vancouver, B.C.

Terms of the transaction were not disclosed.

William G. Roth, Dravo's chairman and president, repeated his earlier statement that sales of the Gibbs & Hill and Atlanta businesses represent significant steps in accomplishing the company's exit from engineering and construction activity. "The prompt resolution of these transactions enables us to focus on opportunities to complete the divestiture of remaining engineering and construction units and to move forward with our strategy to operate exclusively as a natural resources business," Roth said.

New York-based Gibbs & Hill, traditionally Dravo's largest engineering subsidiary, principally provides service to clients in the power and transportation industries, while pulp and paper production forms the primary market for the Atlanta operation purchased by Sandwell Swan Wooster.

/CONTACT: William P. Stewart of Dravo, 412-566-3088/

cb (DRV)

Cite this article: "Dravo completes sales of Gibbs & Hill, Dravo Engineering companies." PR Newswire. PR Newswire Association LLC. 1988. HighBeam Research. 23 Feb. 2011 <>.

November 29, 1988, New York Times, "Salomon Will Move to Trade Center," by Thomas J. Lueck,

A year after withdrawing from a controversial plan for high-rise offices in Columbus Circle, Salomon Brothers, the securities concern, said yesterday that it would move its headquarters and 3,000 workers to the World Trade Center in lower Manhattan.

The move, coming when several large Manhattan employers have moved out of the city or solicited rich financial incentives to stay, ended speculation about Salomon's intentions. Despite the company's repeated assurances that it had no plans to leave New York City, it acknowledged yesterday that it had considered many sites in New Jersey and elsewhere.

''This is a reaffirmation of our commitment to New York City,'' said John H. Gutfreund, Salomon's chairman. The company said its traders, investment bankers, research analysts and similar workers would move to 7 World Trade Center in 1990, leaving 1,800 others, mainly computer operators and clerical staff, at other sites in lower Manhattan.

Koch Praises Decision

At City Hall, Mayor Koch said Salomon's move was particularly important to the city because many Wall Street concerns, hurt by last year's market collapse, were cutting costs wherever possible.

''It demonstrates that regardless of market fluctuations, the financial service sector retains confidence in the bottom-line conclusion that New York is the best place to do business,'' the Mayor said.

Salomon's decision gave a long-awaited lift to 7 World Trade Center, the last building to be erected at the World Trade Center. Drexel Burnham Lambert backed out of a $3 billion deal to move its headquarters to the building a year ago, and the structure had attracted only one accounting firm as a tenant and filled but one of its 47 floors.

Salomon said it would sign a 20-year lease on slightly over one million square feet, or just over half the space in the tower.

 A Billion in Rental Fees

Larry Silverstein, a New York developer who built 7 World Trade Center on land owned by the Port Authority of New York and New Jersey, said yesterday that finding a major tenant had not been easy because the rent was high. He said Salomon would pay more than $1 billion over 20 years.

''We were waiting for a special tenant, and Salomon is it,'' he said.

Nonetheless others close to the transaction said Salomon drove a hard bargain with Mr. Silverstein, both because of the increased competition for tenants and its own needs to economize.

Unlike some other companies that have relocated, Salomon did not receive special financial incentives from New York City. In the biggest package of incentives ever offered, the city recently agreed to give the Chase Manhattan Corporation, which is moving 5,000 workers to downtown Brooklyn, benefits valued at $235 million. Drexel Burnham is to receive a package worth $85 million in exchange for building new offices in lower Manhattan and Kew Gardens, Queens.

Tax Benefits Available

Mr. Silverstein said the only government incentives that Salomon would receive were those offered to any new tenant in the World Trade Center, which itself gets special tax treatment because it is owned by the Port Authority. The incentives include a 66 percent reduction in city real-estate taxes and an exemption from city sales taxes on the purchase of some office equipment.

Gedale B. Horowitz, Salomon's senior executive director, who was in charge of the company's search for quarters, said it had considered more than 50 sites, including developments planned or under construction along the New Jersey riverfront and in Brooklyn and Queens.

He added that the key factor for the company was the potential loss of valued professionals if their jobs were moved from Manhattan.

May 16, 1990, New York Times, "Real Estate; Japanese Help Fill Trade Center," by Alan S. Oser,

''THANK heavens for the Japanese!'' George Rossi exclaimed. They are making the office leasing numbers look respectable at the World Trade Center.

Mr. Rossi has been the trade center's general manager for sales and leasing for the last 13 months. He has 10 million square feet of office space to think about, and it is no secret that these are not happy days for the downtown Manhattan office market.

People talk about a vacancy rate there hovering around 14 percent. When secondary, or non-prime, space is considered separately, the rate may be 20 to 25 percent.

But at the World Trade Center, Mr. Rossi is happy to say, the vacancy rate is only 7 percent, or 700,000 square feet, of which 500,000 square feet are available currently. Tenants who now occupy the other 200,000 square feet intend to leave when their leases expire.

Many people have worried that a heightened presence of Japanese interests in the New York City economy symbolizes a setback to American enterprise. But for a landlord who has seen occupancy fall from 98 percent to 93 percent, the increased Japanese presence, particularly the banks, is a blessing.

The trade center's experience helps put in focus the importance of Asian financial institutions to the New York City office market.

By the end of this year, close to 10 percent of the office tenants of the World Trade Center will be Japanese concerns. The figure is 750,000 square feet already.

The leading Japanese banks -among them Fuji Bank, Dai-Ichi Kangyo Bank, Yasuda Trust and Banking and Sumitomo Bank Ltd. - occupy 350,000 square feet. That figure will soon go up to 440,000 square feet, Mr. Rossi says.

The trade center's special affinity with the Asian financial world extends beyond its relationship with the Japanese. The total space occupied by all Asian banks, bank-service firms, investment banks and currency traders amounts to 826,000 square feet, compared with 800,000 square feet by similar American institutions and 236,000 square feet by European financial institutions.

The even better news, he says, is the rapid expansion of Japanese regional banks in the United States. They often make the World Trade Center their first location for the away-from-home headquarters.

On a square-foot basis, none of this has compensated for the trade center's occupancy losses. These are mainly a result of the decline in tenants in the shipping business. Many have either closed or moved to less expensive secondary space, Mr. Rossi said.

The center's biggest tenant, Dean Witter Reynolds Inc., has left about 300,000 square feet of space since its peak occupancy of 1.3 million square feet in the 1980's. Dean Witter Reynolds has its world headquarters at the World Trade Center.

The biggest loss of all in the 1980's has been the steady departure of New York State agencies. Gov. Mario M. Cuomo set that in motion when he took office for his first term in January 1983.

The state was occupying two million square feet of space at the time. Its agencies had moved in during the dark days of the early 1970's, one of the most dismal real estate markets of New York City's post-Depression history. The trade center was developed by the Port Authority of New York and New Jersey and opened in December 1970.

Governor Cuomo thought that state offices ought to be dispersed in less prestigious locations of the city, where rents were lower and office occupancy might give the subcenters an economic lift. The state has been moving out of the World Trade Center ever since. Its occupancy is down to two floors occupied by the Governor's office itself, plus two floors that will be vacated this summer. By the end of this year, the state will occupy less than 100,000 square feet.

Most of the space that the state yielded was re-rented in the mid-1980's in the middle-$30-a-square-foot range, Mr. Rossi said. But in the last two years rents have fallen about $2 a square foot a year; annual rents are now $28 to $40 a square foot.

In recent months the market and the center sustained the additional blow of the shrinkage in the space needs of Shearson American Express, and the collapse of Drexel Burnham Lambert Inc. Together, those events have put about 750,000 square feet of space that had been committed back on the market.

The silver lining, for the present, is therefore the Japanese expansion. It has a positive effect on downtown employment as well. Although the Trade Center management lacks precise figures, it notices that space leased by Japanese banks is often filled with workers, some occupying cubicles as small as 60 square feet.

photo: George Rossi, the general manager for sales and leasing at the World Trade Center, where the vacancy rate is 7 percent. (Media Photo Group Inc.)

Labels: Japanese offices as small as 60s.f. per worker

September 13, 1991, The Record (Bergen County, NJ) "Firm Adds to Lease at Trade Center,"

NEW YORK -- Japan's fourth-largest securities firm has agreed to extend its lease in the World Trade Center through December 2005, the Port Authority of New York and New Jersey announced Thursday.

Under the agreement, Yamaichi International (America) Inc., which currently leases about 43,900 square feet on three floors of Two World Trade Center, extended its term by 11 years and took over an additional floor that it had been subleasing from another tenant, the authority said in a prepared statement. Financial terms weren't disclosed.

The trading firm, which first began leasing 6,137 square feet in the twin office towers in 1973, is the largest of more than 60 Japanese firms leasing space at the complex, the authority said.

Copyright 1991 Bergen Record Corp. All rights reserved.

Cite this article: "FIRM ADDS TO LEASE AT TRADE CENTER." The Record (Bergen County, NJ). 1991. HighBeam Research. 23 Feb. 2011 <>.

Labels: Yamaichi leases two floors in South Tower

Yamaichi International (America),Inc. is located at 2 World Trade Ctr #9650 New York, NY 10001.

Corporation Wiki

Sept. 11, 2001, CBS MarketWatch, "Trade center home to many companies, $3.2 billion lease deal was recently completed,"

By Thom Calandra,

NEW YORK (CBS.MW) -- Financial services companies, insurers and money managers, many of them publicly traded, were a big part of Manhattan's World Trade Center.

Morgan Stanley Dean Witter took about a tenth of the leased space in the two towers, which were struck by two planes early Tuesday and collapsed. "Some 3,500 people working for Morgan Stanley's individual investor businesses were based in the World Trade Center complex, and we are working diligently with local authorities to determine the facts regarding their safety," the company said.

Blue Cross Blue Shield was another large employer in the World Trade Center. The health insurer had several thousand employees working in the 1 World Trade Center tower.

The New York Mercantile Exchange, which trades oil, gold and other futures contracts, is at the World Financial Center, across the street from the two buildings. A Marriott hotel, the New York Marriott World Trade Center (NYSE:MAR) , is attached to the complex.

Cantor Fitzgerald, a financial services firm that specializes in the trading of government bonds, had its headquarters near the top of one of the towers, 1 World Trade Center. The firm, which was located on the 101st, 103rd, 104th and 105th floors, said it was trying to determine the safety of its approximately 1,000 workers in the tower. Cantor Fitzgerald's chairman, Howard W. Lutnick, made a statement in which he called the tragedy a "very difficult and confused situation."

Cantor Fitzgerald also operated an electronic trading unit called eSpeed from the tower.

Others were trying to determine the location of employees. "Our downtown office is in the WTC. We are fearing the worst because we have not heard from the people that were trapped," said Alison Miller, a corporate spokeswoman for Julien Studley Inc., a commercial real estate services firm located on the 88th floor of one of the towers.

American Express (NYSE:AXP) , the financial services company, has offices at the complex in 7 World Trade Center, just across the street from the towers. Its Web site was down Tuesday. The 7 World Trade Center building was said to be close to collapse Tuesday afternoon.

Merrill Lynch and Lehman Bros. (PINK:LEHMQ) also have a presence at the World Trade Center complex, across the street from the towers.

The World Trade Center's two towers, 1 and 2 World Trade Center, take up about 10 million square feet on reclaimed land in lower Manhattan, in the Financial District. Some of the world's largest banks had offices, operations or trading rooms in the buildings, including Bank of America (NYSE:BAC) and Deutsche Bank.

Keefe Bruyette Woods, a small brokerage that specializes in regional banks, was located in the towers. Other businesses included Bank of Yokohama, Bank of Taiwan, Fuji Bank & Trust, AIG Aviation Brokerage, Oppenheimer Funds, Providential Securities, Thomson Financial and Allstate Insurance, according to, and the World Trade Center register, which is available at

Telephones and Web sites for businesses at the twin towers were not working Tuesday. Nearly all businesses in Manhattan's surrounding Financial District, including the New York Stock Exchange several blocks away, were closed.

"I was in No. 2 on (floor) 73 when No. 1 got hit," said John Hoekman, a senior vice president who works for Morgan Stanley. "Most of us in No. 2 got out before the second (plane) hit. Some of the folks here watched people jumping out of No. 1 and hit the pavement below. The tragedy is beyond words."

Many trade centers and tourism groups from other countries, such as the Tourism Authority of Thailand, were located in the center, which is owned by the Port Authority of New York and New Jersey. The Port Authority runs most of the tunnels and bridges that connect the island of Manhattan with the state of New Jersey.

First opened in 1970, the two buildings of the World Trade Center stood 1,368 feet and 1,362 feet tall, making them higher than the 1250-feet Empire State Building in New York City. See related story about the building's history.

In July, New York Gov. George Pataki and New Jersey Acting Gov. Donald DiFrancesco announced the World Trade Center would be leased for $3.2 billion to Silverstein Properties Inc., which is privately held, and Westfield America Inc. (NYSE:WEA) , a publicly traded company. Westfield, a California company, was set to run the retail area of the twin towers under terms of the 99-year lease.

A unit of General Motors (NYSE:GM) , GMAC Commercial Mortgage Corp., issued more than $500 million of mortgage-backed securities to finance the lease pact. Investors in those securities are likely to have included pension funds.

Insurance claims for damages related to the destruction of the twin towers - and an attack on the Pentagon in Washington - could run into the billions of dollars. See insurance article.

September 13, 2001,,  "Insurance claim estimates growUp to $30 billion in losses seen resulting from attack," by Kristen Gerencher and Mike Tarsala, 

SAN FRANCISCO (CBS.MW) -- As damage estimates mount, the attacks on the World Trade Center and Pentagon are expected to be the costliest man-made disaster in U.S. history and the insurance industry will struggle to absorb billions in losses, experts said.

Estimates of total claims for loss of life, property, injuries, workers compensation and business interruption range from $15 to $30 billion, industry officials said.

The insurance market's reserves, known as reinsurance, might be unable to cover the massive claims, experts said. The Federal Reserve said it would provide additional money to support relief efforts as needed.

The Fed added an unusually large $38.25 billion in temporary reserves into the U.S. banking system Wednesday, according to Reuters. See story on how world's central banks are responding.

"Clearly, this is the sort of event no one could have anticipated," said Candysse Miller, a spokeswoman from the Insurance Information Institute in Los Angeles.

The World Trade Center's two towers plus two other buildings on site were valued at $3.2 billion this year and the complex could cost an estimated $2.5 billion to $3 billion to construct today, excluding the cost of the land. See full story.

Insurance companies may need temporary federal reinsurance to cover losses, said Robert Hunter, Director of Insurance for Washington-based Consumer Federation of America. But the industry should be able to weather the latest catastrophe, he said.

"Even after Hurricane Andrew, which was $15 billion in reported losses, only eight companies had financial difficulties and all claims were paid," Hunter said. "The industry bounced back."

Munich Re, the world's largest reinsurance company, said it expects considerable damage claims from the terror attacks on New York and Washington, according to the Financial Times.

Another reinsurer, Swiss Re, said claims could match the 800 million euros ($729 million) it paid for storms in 1999.

U.S. property-casualty insurer American International Group, AIG (NYSE:AIG) , said it will incur pre-tax losses of $500 million.

Meanwhile, Chubb (NYSE:CB) said it has "significant property exposure" in the World Trade Center and put its pre-tax loss at $100 million to $200 million, subject to revision as more facts become known. Chubb Chief Executive Dean O'Hare said total industry losses could reach $30 billion, according to the Wall Street Journal.

And Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) said it expects to incur 3 to 5 percent of the industry's total losses from this disaster, slightly more than its normal 2 to 3 percent share.

Meanwhile, life insurance companies are trying to determine how many policyholders have died and are prepared to make good on contracts, according to the American Council of Life Insurers.

Forthcoming claims for loss of life, property, injuries, workers' compensation and business interruption are certain to surpass the largest, non-natural U.S. disaster to date -- the Los Angeles riots of 1992, which cost $775 million in overall insurance losses.

The 1993 bombing of the World Trade Center brought $510 million in claims, and the Oklahoma City bombing, the most deadly terrorist attack in the U.S. until now, wrought $125 million in claims six years ago.

The U.S. government is self-insured, so physical loss to government buildings like the Pentagon isn't a commercial issue, the insurance institute said.

Property policies typically cover terrorism, but they exclude acts of declared war, Miller said. Still, in light of increased global terrorism, some commercial policies have exclusions for damage caused by terrorist attacks.

There also will be health insurance claims from potentially thousands injured in the buildings' collapse and ensuing workers' compensation claims from those killed or injured on the job.

"It will be enough of a magnitude that it may trigger some disaster planning" within the industry, Hunter said.

Added Miller: "This will throw a whole new set of issues at risk managers."

"An event like (Tuesday's) is going to cause us to rethink a lot of things in this country, whether it's financial markets or airport security," she said. "But how that plays out is anyone's guess."

October 24, 2001, New York Times, "2 Private Firms Taking Stake in Casualty Insurer," by Andrew Ross Sorkin and Joseph B. Treaster, 

With insurance premiums rising, two private investment firms plan to announce a major investment today in the Arch Capital Group, a casualty and property insurer based in Bermuda.

Warburg Pincus and Hellman & Friedman plan to invest $750 million in Arch Capital, marking the largest private equity investment in any company this year, executives close to the negotiations said.

According to the executives, Warburg is going to invest $500 million, while Hellman will invest $250 million.

Since the attacks on Sept. 11, the insurance industry has been raising rates, and some investors have begun to look at opportunities to take advantage of the growth potential.

At least three other companies, with similar investment philosophies, have been formed since the attacks, and entrepreneurs and investors are working on at least a dozen more deals.

Marsh & McLennan recently formed a Bermuda-based insurer, Axis Specialty, while the AON Corporation said it would add property and reinsurance policies to its Combined Specialty Corporation. RenaissanceRe Holdings said this month that it would start DaVinci Reinsurance, a Bermuda-based property catastrophe reinsurer. That business included an investment from State Farm Mutual Automobile Insurance.

The attacks at the World Trade Center, which resulted in losses of at least $40 billion, constituted the worst disaster insurers have ever suffered. But the tragedy is expected to ultimately benefit the industry. While some companies are likely to fail, the strongest players will prosper. There is also the expectation that newcomers will have a great opportunity to make money.

Prices on commercial insurance are already soaring as businesses suddenly want more coverage than ever, while the industry has lost more than 15 percent of its $300 billion in capital. Many companies, stunned by the big losses and convinced that they had previously priced their insurance too low, are rationing coverage now, spreading their risk over a wider customer base so that they will not be badly hurt by any one incident. That makes the demand for more insurance even greater.

Arch Capital Group, formerly Risk Capital, has been building a portfolio of insurance-related businesses since it sold off the assets of Risk Capital Reinsurance to Folksamerica Reinsurance in May 2000.

Labels: Investment in the re-insurance business after 9/11

November 26, 2001, Crane's, "Wall Street's middlemen get reshuffled; Trade center firms cutting back, giving smaller rivals a chance to gain," by Stephen Gandel,

Hilliard Farber & Co. is having its best year in a decade and a half, and its president feels awful about it.

The brokerage firm, which had been barely holding onto the top spot in the mortgage bond market, has opened up a big lead on its two closest rivals, Cantor Fitzgerald and Garban Intercapital. They were located in the World Trade Center.

"You feel great until 4 p.m., and then you realize you are dancing on other guys' graves,'' says Hilliard Farber. "It's been the toughest two and a half months of my life.''

The collapse of the World Trade Center has profoundly changed the business of the interdealers-the firms that often act as middlemen when Wall Street brokers want to trade with each other. Since Sept. 11, a few smaller players have moved up in the ranks, mostly at the expense of the devastated Cantor.

"No one wants to lay claim to taking the share of the market that used to be Cantor's,'' says a spokesperson for Garban. ``But clearly it has been redistributed.''

The events of Sept. 11 had an outsize effect on this Wall Street niche because three of its biggest players-Cantor, Garban and Euro Brokers-lost their offices and workers. As they have tried to recover, the companies have made decisions that opened the door to smaller competitors.

Cantor's big losses

Cantor lost 677 of its 1,000 employees on the top floors of Tower One. With so many of its brokers gone, it abandoned the business of trading corporate and mortgage bonds, as well as the business of trading repurchase agreements, or repos-short-term debt issued by institutions to finance investments-in the United States.

Meanwhile, Euro Brokers, which lost 60 people out of 477, scotched plans to enter the mortgage bond market.

Garban, which lost one employee, hasn't fundamentally changed its strategy. But it has been hurt by problems in getting its phone system up and running at its temporary locations in Jersey City and midtown Manhattan, and traders say the firm has lost business since Sept. 11.

On Oct. 1, for instance, Garban's New York operations had revenues of $584,350, down 55% from the $1.3 million in sales the firm had on the first day of trading in September.

"Garban has had problems logistically,'' says Robert Huntington, who trades mortgage-backed securities at Credit Suisse First Boston. "Their capability is not as strong as it used to be.''

The biggest beneficiaries-albeit unwilling ones-of the three big players' problems have been firms operating in the Treasury market, the mortgage-backed securities market and the municipal bond market.

In the Treasury market, which is dominated these days by electronic brokerages, Jersey City-based BrokerTec had been struggling to compete with Cantor's eSpeed Inc. Now, it has a daily volume of $40 billion, or nearly a third of the $150 billion in Treasury trades a day that pass through interdealer brokers, according to Andy Nybo, a senior analyst at Needham, Mass.-based TowerGroup.

Much of the increase has come at the expense of eSpeed. Though eSpeed is still the largest in the market, traders say bond price information on eSpeed's system is not as robust, a charge that Cantor disputes.

But eSpeed's volume is down 20% to $60 billion a day, from as much as $75 billion before Sept. 11, according to Mr. Nybo. Cantor says its electronic brokerage hasn't lost market share.

Cantor was thriving

"Before Sept. 11, it was looking like Cantor was going to put everyone else out of business,'' says Peter Vinella, a Wall Street technology consultant. "Now, BrokerTec has enough market share to stick around forever.''

Before Sept. 11, Hilliard Farber's lead in the mortgage market was minimal at best. Garban, the No. 2 player, was close behind, as was Cantor in the No. 3 position. Now, Hilliard Farber has solidified its lead, taking market share from both Garban and Cantor.

Liberty Patriot Securities Inc., another interdealer broker, has also been picking up volume, according to traders.

J.J. Kenney-Drake, an interdealer municipal bond broker, has seen its volume increase since Sept. 11, though the firm says it isn't sure whether that's because lower interest rates have spurred volume increases marketwide, or whether it's because Cantor, which was once a big player in the market, is no longer active.

And despite its problems, Garban says its business has risen in U.S. agency debt-bonds issued by such quasi-government institutions as Fannie Mae and Freddie Mac-and repos, two other businesses where Cantor has ceased offering voice-brokerage services.

Even before Sept. 11, the interdealer market was on the verge of big changes.

Electronic systems

In recent years, firms had been under siege from the introduction of electronic trading systems, which match buyers and sellers automatically without the need for a broker.

"With electronic servers, buyers and sellers can pretty easily find each other, so you don't need a broker,'' says Mr. Vinella.

Much of the volume in the Treasury business already has migrated to electronic trading, and other markets are following. In fact, one of the lingering effects of the tragedy may be that it has accelerated the transition to electronic trading from selling bonds over the phones. Having lost so many of its brokers, Cantor is pouring its remaining resources into electronic trading.

It already has launched a system for U.S. agencies, and plans to develop electronic trading capabilities in other bond markets, such as corporates and municipals.

"In a number of markets, it is not our strategy to go back to voice,'' says Lee Amaitis, chief executive of Cantor's international business. "Many of our rivals are not committed to technology, and we think that's a disadvantage.''

Cite this article

Gandel, Stephen. "Wall Street's middlemen get reshuffled; Trade center firms cutting back, giving smaller rivals a chance to gain.(Brief Article)." Crain's New York Business. Crain Communications, Inc. 2001. HighBeam Research. 9 Mar. 2011 <>.

 December 19, 2001, Los Angeles Times, "New York Office Market in a Spin," by Jesus Sanchez,

Real estate: Turn for the worse takes many by surprise as deluge of available space far exceeds demand.

Within hours of the Sept. 11 terrorist attacks on New York's World Trade Center, real estate brokers and tenants began to scramble for replacement offices amid fears of a space crunch and soaring rents. It didn't work out that way.

Instead, three months later, it's New York City landlords who are scrambling to fill a huge and growing pool of available space that has sent vacancies rising, rents falling and has complicated efforts to rebuild lower Manhattan.

The New York office market's surprising turn for the worse is partly the result of the many displaced businesses that have so far replaced only about half of the space they once occupied, according to industry estimates.

More significant, the slowing economy has prompted many companies--particularly Wall Street and financial services firms--to retrench and give up office space they no longer need. As a result, an unprecedented 20 million square feet of space--about twice the size of Century City--has flooded the nation's largest office market during the last three months, according to brokers.

"I think Sept. 11 brought a lot of things to bear and gave companies the opportunity to get rid of space they weren't using," said Justin Stein, regional research director for real estate services firm Grubb & Ellis. "The initial wave is certainly over, but if we continue to see layoffs in the banking industry, I'm sure we will see more space coming on to the market."

That's almost a certainty given the city's deteriorating economy, which was weakened further by the terrorist attacks. New York lost a record 79,000 jobs in October, and its economy is expected to shrink by 3.1% next year, according to government projections.

"Firms are leasing a lot less space than they previously did because of the slower economy," said Michael Burlant, a broker at Cushman & Wakefield.

Despite the destruction and damage to about 30 million square feet of New York's giant office market, the city's overall vacancy rate climbed to 9.3% in early December from 8% just before the Sept. 11 attacks, according to Grubb & Ellis. Conditions are even worse in downtown and lower Manhattan--home to Wall Street and the World Trade Center--where the vacancy rate has climbed above 10% and is expected to peak at 17% next year.

Landlord "asking" rents also have weakened since the attack, edging down 3% citywide and 8% in downtown and lower Manhattan. But tenants eager to sublease huge amounts of space are undercutting landlords by 15% or more, brokers say.

"If you are a tenant out looking for 5,000 square feet, your options are limitless," Burlant said.

The attacks and subsequent jump in available space revealed that the New York real estate market was in much weaker shape than many had thought. Only two days after the attacks, John Powers, vice chairman of Insignia/ESG, the city's largest commercial real estate broker, said his firm was deluged with tenants eager to unload about 5 million square feet of office space.

"People were saying, 'What kind of space can we free up?'" Powers said. "Then the space started dropping on the market."

But the deluge of space has far exceeded demand. Facing economic uncertainty and still reeling from the attacks' emotional and human toll, many displaced tenants have leased only a fraction of the space they formerly occupied at the World Trade Center and nearby buildings.

Sandler O'Neil & Partners, an investment banking firm once located on the 104th floor of 2 World Trade Center, took slightly less space in a midtown building in part because it lost 66 employees, about 40% of its staff, during the terrorist attack, said Fred D. Price, chief operating officer.

"We knew that initially we were not going to rehire as many people as we lost," said Price, whose firm will move into its new offices in late January. "We knew going in that we would have less need for space than before."

Investment banking firm Morgan Stanley, one of the World Trade Center's biggest tenants with about 1.2 million square feet of space, has committed to leasing only about 300,000 square feet of replacement space in addition to renewing leases in some existing buildings.

Morgan Stanley spokesman Bret Gallaway would not say whether the firm will lease as much space as it lost. "We're considering all our options," he said.

In addition, Morgan Stanley has decided against moving its institutional sales and trading operations into a million-square-foot building nearing completion in Times Square, just a short block from its headquarters. Instead, it has sold the building to rival Lehman Bros. Holdings Inc. and reportedly is considering locations outside Manhattan as part of an effort to spread out its operations and make itself less vulnerable to catastrophe.

Some firms have opted for less space in response to higher rents in midtown Manhattan, where many former World Trade Center tenants have relocated.

For example, brokerage firm Keefe, Bruyette & Woods Inc. faced rents that were more than double what it was paying at the World Trade Center, where it had been leasing space at bargain rates negotiated several years ago. As a result, the firm, which lost 67 employees in the attack, leased about half as much space--about 55,000 square feet--in a midtown high-rise than at its previous location, said spokesman Neil Shapiro.

"There was no reason to have that much space since rents are higher in midtown," Shapiro said. "It was based on necessity."

About 25% of the space leased by dislocated tenants has been in suburban locations, with much of the remainder being leased in midtown Manhattan and other parts of New York. For many firms, lower Manhattan's attractive rents and proximity to Wall Street are overshadowed by the emotional effect of the attack.

"Given what has happened, we felt that midtown would be a better location for our surviving employees," said Price of Sandler O'Neil.

Lower Manhattan remains the city's financial center, but telecommunications and transportation still are not fully restored, and the ruins of the World Trade Center continue to smolder. It will be years before cleanup and reconstruction efforts will be completed, real estate observers say.

Many are debating how much of the office space lost in the World Trade Center attacks needs to be replaced given the climbing vacancy rate.

Government tax incentives and bargain rents, combined with an economic rebound, could attract new tenants to lower Manhattan. But few expect that every square foot lost from the attacks will be replaced any time soon.

"If there is a significant downtown vacancy and you bring a lot of new product online, it could make things worse," said Burlant of Cushman & Wakefield.

February 1, 2002, Traders, "Starting All Over: Keefe, Bruyette & Woods, recovering from tragedy, is back trading after September 11,"

Keefe, Bruyette & Woods (KBW), an important listed and Nasdaq player before the World Trade Center tragedy, is at the beginning of the long road back. Over the past few months it has faced huge professional and personal problems.

Many friends and key personnel were lost. The survivors of this employee-owned, private firm, as well as their families, were plunged into grief. It had to search for new offices. Earnings have been depressed.

"Our earnings are down, there's no doubt about that, but we do remain profitable," said an official of the firm, who declined to give specific numbers. However, he conceded that there have been "several days and weeks when we have lost money, but over the total period I believe we are profitable."

The attacks on the World Trade Center virtually crippled KBW's Nasdaq trading activities. Although it had been a large market maker in many Nasdaq financial stocks, KBW's Nasdaq trading desk was decimated. The firm was forced to suspend its trading in Nasdaq stocks and has only recently resumed this key operation.

On Sept. 11, the firm's offices and desk in the 88th and 89th floors in the South Tower at the World Trade Center were staffed with about 40 professionals: 21 traders, five market makers and 16 sales traders. All of the market makers lost their lives, as did 14 sales traders.

Today that number of professionals is about 25 and fate played a part in that number. Two traders had survived because one had called in sick and the other had overslept. KBW ordinarily makes a market in over 270 Nasdaq financial services stocks and is one of the top three market makers in over 45 of them. And the firm was something of a Nasdaq trading power, but nevertheless KBW officials say most institutional customers are coming back.

"We thank our institutional clients for their patience," said Thomas B. Michaud, chief operating officer and vice-chairman of KBW. "Before Sept. 11, we would trade over one million shares in the over-the counter market and now we're starting to operate at around that level again." He added that the firm's listed business is about four and a half million shares daily.

In his 15 years with the firm, Michaud said that this has been the most difficult period. That's because no part of the firm was left untouched by the tragedy.

Joseph J. Berry, the firm's co-chief executive, was killed. And so was assistant trader Christopher Duffy, the 23-year-old son of John Duffy, 52, who is now Bruyette's lone chief executive. Berry is survived by his son, Joseph Berry, Jr., a KBW investment banker.

The period of recovery has begun with the firm recruiting new staff. Aside from the trading desk, the firm also lost many valuable research analysts on Sept. 11. Recently, it filled six vacancies in research, recruiting four from the ranks of Morgan Stanley. It is a positive step. Michael Corasanti was named director of research late in October. Previously, he had been with Neuberger Berman LLC, where he had served as managing director and portfolio manager. Thomas McCandless also joined KBW as a senior vice president in the research department. He will be covering regional banks. He was most recently an executive director and senior bank analyst for CIBC Oppenheimer.

"I haven't given any thought to disbanding the company," wrote John Duffy in an article for The Wall Street Journal. "Those who we lost would want us to rebuild, and quitting now would be caving in," he wrote.

KBW, before the September tragedy, was a firm that had a reputation for focusing on large cap companies, but was also beginning to move into the small cap area. KBW's specialty is financial and insurance companies.

And how does the trading desk fit in? "We are a research-driven organization and that is our primary focus as is our institutional brokerage business," Michaud said.

Supplying research is the key element in fueling KBW's efforts in investment banking business, a game in which it is competing with big boys like Goldman Sachs, Merrill Lynch and Morgan Stanley. But it's difficult to compete when one has lost one's biggest office.

Nevertheless, KBW officials are optimistic. "Whatever emotions this firm's employees may share, it has all been channeled into our determination to rebuild," Michaud said. KBW had to move its operations uptown to a temporary office, which will include a new trading floor, in the Equitable building in midtown Manhattan. The building is owned by BNP Paribas, which was rumored to be interested in buying KBW. Michaud declined comment.

But separately, Joseph Berry, before his death said that, "We are all shareholders. If there is a bigger company that would give our balance sheet muscle, that would be helpful."

"We are very committed to rebuilding this company," Michaud said. "We had an excellent year last year and we plan to be just as strong in the future."

Cite this article

"Starting All Over: Keefe, Bruyette & Woods, recovering from tragedy, is back trading after September 11.(Brief Article)."

Traders. SourceMedia, Inc. 2002. HighBeam Research. 9 Mar. 2011 <>.

June 14, 2002, Wall Street Journal, "Moving Back to Downtown?"

Hundreds of companies were displaced from lower Manhattan by the attack on the World Trade Center. Nine months later, here's a rundown on which companies have returned or plan to return -- and which have permanently relocated outside of the financial district.

Company Business Location (pre-9/11) Square Footage (pre-9/11) Employees at Location (pre-9/11) Coming Back? Then … and now

American Express financial services 7 WTC, 3 WFC, 40 Wall St. 1,320,000s.f. 4,000 coming back About 4,000 American Express employees were moved to other locations after the collapse of the Trade Center caused substantial damage to the World Financial Center. The workers began returning in May and will continue to come back gradually until September.

Aon Corp. insurance WTC 460,000s.f. 1,100 coming back About 600 employees are working in a temporary space in midtown. The company says it's committed to staying in downtown Manhattan, but it hasn't finalized its plans.

Bank of America banking 1 WTC 150,000s.f. 400 permanently relocated Workers temporarily relocated to New Jersey after Sept. 11. In January, the bank announced a 10-year lease on 180,000 square feet on West 33rd St. in midtown Manhattan. Displaced employees will move there beginning midyear.

Bank of New York banking 100 Church, 101 Barclay NA 8,500 mostly returned Workers are relocating to 101 Barclay (4,000 worked there) and to headquarters at One Wall Street (3,000). Will continue to use other locations in Manhattan "and beyond" on a permanent basis.

Cantor Fitzgerald securities 1 WTC 250,000s.f. 1,050 permanently relocated. The bond brokerage, which lost two-thirds of its staff and its corporate offices in the World Trade Center attack, will occupy 80,000 square feet on five floors of 135 E. 57th St. in midtown Manhattan.

Customs Service government WTC 6 351,770s.f. 800 undecided. Staff initially relocated to agency's facilities at Kennedy International Airport, in Queens, N.Y., and Newark, N.J. Later added offices at 1 Penn Plaza and West 26th St., outside financial district. Uncertain whether new Custom House will be built downtown.

Deloitte Touche Tohmatsu accounting 2 WFC, 1 WFC NA 3,500 coming back. Employees from World Financial Center are spread out over several locations across Manhattan, N.J. and Conn. A spokesman said: “We are planning to return, but no date has been set yet. We are still working to reconstruct the space.”

Deutsche Bank banking 130 Liberty, 4 WTC, 4 Albany St., 14-16 Wall St. NA 5,500 undecided. Workers moved to Deutsche Bank offices in midtown Manhattan and New Jersey. Spokesman says they may move right back to 130 Liberty, where they were. "We're looking at the building structurally and environmentally to make sure it's safe."

Dow Jones publishing 1 WFC 310,000s.f. 800 coming back Expects to return to One World Financial Center during the summer. "Our corporate headquarters has always been in Manhattan and will remain there." Company is returning three floors at WFC 1 and subletting four it previously occupied.

Empire Blue Cross insurance 1 WTC 450,000s.f. 1,914 permanently relocated Workers moved to temporary space, including 1440 Broadway and 355 Park Ave. in Manhattan, and in Melville, N.Y. The company has leased space in a new office building at 9 Metrotech Center in Brooklyn, which will hold 1,300 employees when construction is complete in spring 2003. Also, has permanently relocated 320 people to new offices space at 11 W. 42nd St. in midtown Manhattan. No plans to return to financial district.

Fireman's Fund insurance [2 WTC NA 125] returned. Relocated to new downtown space at 75 Wall Street.

Fred Alger Management mutual funds [1 WTC 36,000s.f. 220] permanently relocated Employees initially moved to backup location in N.J. Moved to new offices near Union Square, outside of the financial district, on March 11.

Goldman Sachs securities 1 New York Plaza [363,000s.f. NA] remained Plans to move equity-trading department to Jersey City location that was in development since 1999.

Gruntal & Co. securities 1 Liberty Plaza [NA 400] not disclosed Liberty Plaza workers moved to locations in N.Y., N.J., Conn. and Pa. Some working from home. Didn't disclose long-term plans.

Guy Carpenter Agencies insurance WTC 2 [NA 700] unlikely to return Temporarily relocated 250 employees to 114 W. 47th St. in midtown Manhattan. A spokeperson was unsure of the next move for those workers, adding that a return to financial district is "unlikely." Other employees from WTC have relocated to 1166 Ave. of Americas.

Instinet securities WTC 2 [105,000s.f. 21] permanently relocating Company tempoarily relocated employees to three midtown Manhattan locations: 875 Third Ave., 850 Third Ave. and 3 Times Square, the headquarters of Instinet's parent, Reuters PLC. Expects to have permanent office space in Jersey City, N.J., for most of these employees by year end.

IQ Financial Systems software WTC 2 NA 110 relocated Relocated employees outside of financial district, to 28 W. 23rd St.

Keefe Bruyette securities WTC 2 [97,000s.f. 224] permanently relocated Relocated to Seventh Ave. in midtown Manhattan. Trying to secure an additional 10,000 to 15,000 square feet of space at that location.

Lehman Brothers securities WFC 1 [710,000 (WFC) 6,400] permanently relocated Permanently relocated nearly two-thirds of its World Financial Center employees to midtown and has no plans to return to lower Manhattan.

Marsh & McLennan insurance WTC 450,000s.f. 1,900 permanently relocated About 1,100 employees, who were temporarily moved to other Marsh offices in N.Y., N.J. and Conn., will be relocated to Hoboken, N.J. by June 2003. Marsh has a total of 3,500 employees at its midtown-Manhattan headquarters.

Merrill Lynch securities 4 WFC, 2 WFC 4,300,000s.f. 9,000 coming back All employees that were displaced are now back in the World Financial Center.

Morgan Stanley securities WTC 1,320,000 3,700 permanently relocated Has relocated its 3,700 employees to other locations, primarily in New York City.

Nasdaq securities exchange 1 Liberty Plaza NA NA will relocate Nasdaq in April finalized plans to move its corporate headquarters to 1500 Broadway in New York's Times Square.

National Development Research Institute research WTC 2 44,000s.f. 130 permanently relocated Signed a 10-year lease on a new office on West 23rd St., outside the financial district.

N.Y. State Dept. of Taxation and Finance government WTC 2, 5 NA 262 permanently relocated Initially relocated to district offices in Brooklyn and Queens. In October, signed a lease on new space at 1740 Broadway.

N.Y. State Dept. of Transportation government WTC 1 19,628s.f. 58 undecided Initially relocated to smaller facility (5,567 square feet) in Long Island City, Queens. Agency says it has long-term plans to move back to Manhattan, and is looking for space downtown, but not ruling out other spots.

N.Y. State Supreme Court government WTC - Court of Claims 20,000s.f. 20 coming back Initially moved to a court house at 71 Thomas St. Plans to move to a new 20,000 square feet space at 26 Broadway. Hopes to move in by summer.

Port Authority of N.Y. & N.J. government agency WTC 1 900,000s.f. 2,300 plans to return Immediately relocated employees to the Port Authority Technical Center in Jersey City, N.J.; Journal Square Transportation Center, also in Jersey City; Port Newark; Kennedy International Airport, in Queens; and Teterboro Airport, in New Jersey. Late last year, most staff moved to 225 Park Ave. in midtown Manhattan. The agency hopes to return downtown within five years.

Reuters publishing WTC/WFC 77900s.f./78000s.f. 250 undecided Fifty employees were moved to its offices at 3 Times Square, while 150 went to 875 Third Ave, a new location secured for relocation purposes, and 50 located at 1 State St. Plaza. Company doesn't yet have long term plans.

Sandler O'Neill securities WTC 1 28,000s.f. 171 permanently relocated Relocated to midtown Manhattan

Securities and Exchange Commission government agency WTC 7 NA 330 permanently relocated Initially moved some people to U.S. Attorney's offices in Brooklyn and Manhattan, while others worked from home. On Oct. 15, moved to 233 Broadway under a long-term lease.

Sidley Austin Brown & Wood law firm WTC 1 233,000s.f. 650 permanently relocated. Initially relocated to 875 Third Ave. Will move to a 338,000 square feet space at 787 Seventh Ave., also known as the Equitable Tower, by next summer. Firm, expanded by a recent merger, will move 1,000 employees to that location.

Sun Microsystems computers, software WTC 78,000s.f. 350 permanently relocated About 200 employees initially moved to temporary office space in midtown Manhattan. Others temporarily work from Sun offices in N.Y., N.J. and Conn. Company will permanently relocate to 101 Park Ave., a 78,000 square foot space in midtown.

Temenos USA banking software WTC 1 NA 65 permanently relocated Opened an office at 112 Madison in October and another office at 410 Park Ave in January. Future expansion may be outside of New York City.

Thatcher, Profitt & Wood law firm WTC 2 126,000s.f. 314 undecided Initially relocated employees to 11 West 42nd St. in midtown Manhattan. No final decision in long term plans.

Verizon telecom WTC, 140 West NA 2,200 coming back Employees were temporarily relocated to Verizon offices in New York City, Long Island, West Chester County, N.Y., and New Jersey. Hasn't developed long-term plan. Company plans to repair damaged switching and administrative facilities that were located at 140 West St., but doesn't expect to return there for several years. About 1,700 employees had been based there.

-- Reporting by Tim Annett, Paul Beckett, Susanne Craig, Aaron Elstein, Melissa Hankins and Chris Oster. Edited by Paul Harloff.

September 10, 2002, Boston Globe, "For Trade Center companies, a year of remarkable, but still unfinished, resurrection,"

By Adam Geller, Associated Press

NEW YORK -- People from outside have been gently asking Joel Comer and his co-workers the question for weeks now: Where will they be on Sept. 11?

But inside Sandler O'Neill & Partners, even as the survivors prepare to mark the day they lost 66 colleagues, there's a vague discomfort with trying to punctuate a rebirth that may never reach a conclusion.

"It's not a measuring stick to us. It's an event, a date," says Comer, who has spent the year trying to weave together a fixed income department that lost most of its traders. "The important thing is have we done everything we can, have we rebuilt this company in a way that our colleagues would be proud of us?"

For Comer, and people like him at a handful of other remarkably resilient companies nearly wiped out in the attack on the World Trade Center, the answer is self-evident.

If you want to know how they're doing, the survivors say, you have to know not just how they'll mark Sept. 11, but where they'll be on Sept. 12 -- back at their desks.


"This is our stock," Cantor Fitzgerald CEO Howard Lutnick says. He springs out of his chair toward the big-screen television that fills a corner of his office with flickering ticker symbols.

He points to the ticker symbol for eSpeed, a subsidiary of Cantor, which lost more workers than any other firm hit by the attacks. On this late August morning, the screen shows the stock trading at $10.51 a share.

"On Sept. 10, it closed at $8.69," Lutnick says. "It's really an extraordinary testament to the people of this company."

A year later, that group includes about 150 new hires, along with the survivors. Cantor had about 1,050 workers in offices near the top of One World Trade Center. It lost 658, Lutnick's brother, Gary, among them.

Before the attacks, Lutnick and his company had a reputation for incredible brashness, a take-no-prisoners approach to business. In the months afterward, Lutnick's efforts to resurrect his company made him into something of a pariah when the families of some dead workers accused Cantor of abandoning them.

The Cantor that survives, Lutnick says, has done so by battling for the profitability he so clearly relishes, but doing it in the name of the families.

The viability of both goals was highlighted in January, when the company announced that in its first quarter since the attacks, it had earned a profit just under $20 million and turned over $4.9 million of that to the families -- the first installment in Lutnick's pledge to give a quarter of all profits to those survivors for the next five years.

Cantor has been reborn far more modestly than its first incarnation, with offices that begin on the third floor of a midtown Manhattan skyscraper, not much higher than the traffic lights at the nearest intersection.

With space tight, Lutnick shares quarters with another executive, in an office filled with photographs of their children, and their lost colleagues.

"This is my best friend Doug, hanging with my kids," Lutnick says, reaching for a snapshot of Douglas Gardner, a Cantor executive killed in the attack. "He'll never grow old."

Despite the void, Cantor has gradually inched toward a sense of equilibrium, if not normality. When the company held its annual picnic this summer, 650 people came, half of them workers and their families, about half the families of those who were killed.

"It was just easy, maybe that's the best word," Lutnick said. "There was no tension. Everybody was together."

But even if Cantor and its families have made peace, and the company is making money, that does not mean the rebuilding is done.

"Maybe after five years we'll exhale," Lutnick says. "But between now and then, there'll be no time that we stop. Between now and then, we have a lot to do."


On Wednesday, workers at EuroBrokers and parent Maxcor Financial Group, will close their offices at noon, and walk a few blocks to the East River for a service to mourn their 61 lost colleagues.

But even that moment, CEO Gil Scharf insists, will be partly about what comes next.

Part of the reason he chose that site is because the company, straining to do business in temporary, makeshift office space since last fall, just signed a lease to move to a building looking over the river, just above the chosen memorial site.

"You can't just dwell on the past, you have to look forward," said Scharf said.

Euro Brokers, like many of the financial services companies that did business in the World Trade Center, has been trying to do that despite a slumping stock market, a drooping economy and slackened demand for the services they sell. The bottom line is profits that were still down more than 20 percent from last year, when Maxcor posted its most recent quarterly results in August.

Scharf, though, says he sees his company's rebirth in the longer term. It now employs about 300 people in New York, a few more than it did before the attacks. It has moved ahead with plans to add new types of businesses, working with credit derivatives and Treasurys. And he is proud that it is making money by working for it, rather than by winning it on sympathy.

"We are not a charity case," he said. "We have to provide a service and a good service...Obviously if you do that, you get paid for it. That's what we're trying to do."

As Keefe Bruyette & Woods sought to recreate itself in the past few months, executives grasped for a resource they hadn't really expected -- layoffs on Wall Street.

As most other companies have sent workers home, the investment banking firm has snapped them up. KBW, which lost 67 of its 224 workers in the World Trade Center, will meet the one year mark substantially larger than it used to be, with 257 in its ranks.

Even so, the job of making the pieces fit together will take more time, Vice Chairman Thomas Michaud says.

"You've normally been working with the same person for 5 or 10 or 15 years," he says. "The hardest part of the rebuilding hasn't been getting the talent. "The hardest part has been getting ... the infrastructure in place, getting all the new people on the same routine."

The rebuilding isn't over. The company's revenues are down, but it is adding businesses. It is going ahead with a move into Europe, but still trying to reassure workers who remain shaken by what happened.

"There was no playbook on how to do this rebuild, I'll tell you that," Michaud says. "You just had to trust your instincts and do what was right."


A few months after last Sept. 11, an anonymous donor sent executives at Sandler O'Neill a wooden signboard carved with a pair of American flags and the firm's self-bestowed nickname: "Our Little Big Firm."

The sign hangs on the wall over Sandler's trading floor now, just about the only decoration in a room where workers are still trying to put that firm back together.

Gradually, though, the firm's renewal has taken hold.

Enough time has passed that now Mark Fitzgibbon smiles when he recounts the days last fall when his "research department" was reconstituted as eight guys in a single, borrowed cubicle, four of them sitting cross-legged on the floor balancing laptops.

The department, which lost five of its analysts, has since hired 10.

"I think if somebody who didn't know about 9/11 came into this office they'd say it looks like any other Wall Street business," Fitzgibbon says. "For all intents and purposes we are back to normal."

The company as a whole has hired 80 since September, a year so impossibly busy that executives at one point interviewed 150 candidates for two openings.

It reopened its stock trading operations in January. Soon, the wall bearing that sign will come down, so Sandler can expand into adjoining office space.

But the Sept. 11 anniversary, and all the attention surrounding it, have become another hurdle in the company's efforts to sustain itself.

"A year is a long time and this is helping everybody forward a little bit," says Fred Price, the firm's chief operating officer. "But this is also a step backward. People's emotions are on edge and it's pretty raw."

When Sandler began asking families of those killed how they wanted to mark the day, many said they did not want to be anywhere near Manhattan, that they would do so quietly rather than joining any company event.

In the last few weeks, Comer has been waking up again at 3 a.m. each night, hearing lost voices like Ken McBrayer's, whose friendship was built as much on their mutual love for sailing as their work together.

On Sept. 11, Sandler will open for business, holding a short service in its offices. Afterwards, Comer says, he plans to take his sailboat out on Long Island Sound, and spend a few hours alone, thinking, remembering. Then, he will push the thoughts to the side, and go back to doing the only thing he can to close the emotional wounds -- working.

"If I sit still and think about it, I would literally drive myself into madness at the memory of the loss and I don't want to think about that, he says. "I see their faces, I hear their voices, I wake up in the middle of the night and think I've spoken to them....But it's time to focus on what can be done."

October 03, 2003, New York Times, "Financial Firm Is Returning, 2 Years Later," by David W. Dunlap,

Two years after losing its headquarters in the south tower of the World Trade Center, the Oppenheimer Funds investment management company will return to Lower Manhattan, beginning this weekend.

The company's 550 employees will move into four floors at 2 World Financial Center in Battery Park City, said John V. Murphy, the chairman, president and chief executive. Standing in the Winter Garden yesterday, with Gov. George E. Pataki and Mayor Michael R. Bloomberg, he briefly recalled the horror of witnessing the attack.

''It was difficult to imagine that we would ever want to or even be able to return downtown,'' he said. ''It seemed that Lower Manhattan would never be the same. And, in fact, it won't. But that is the irony and beauty of it all. It won't ever be the same, but we have the unique opportunity to rebuild, renew and revitalize.''

After scattering to eight locations, Oppenheimer Funds settled into 118,000 square feet at 498 Seventh Avenue, at 37th Street.

The company, which manages $140 billion in assets, was given a $4.2 million grant under the state and city World Trade Center Job Creation and Retention Program.

OppenheimerFunds is a subsidiary of the Massachusetts Mutual Life Insurance Company, which signed for the 10-year sublease of 189,000 square feet of space in the financial center from Merrill Lynch.

In a telling moment yesterday amid the official pomp, the shadow of Sept. 11, 2001, showed itself. The text of Mr. Murphy's address called for him to say, ''I'd also like to thank our colleagues from the MassMutual Financial Group for their support and help in moving OppenheimerFunds to the World Financial Center.''

He said ''World Trade Center'' instead. Then he corrected himself.

September 12, 2001, Wall Street Journal, "Trade Center Firms Fear For Friends and Colleagues," Page B1

Brent Glading, a salesman for MassMutual Financial Group's Oppenheimer Funds Inc., was on the 33rd floor of the South Tower yesterday morning when the first plane hit the North Tower. He headed down the stairs, but then there was an announcement over the building's public address system that said a plane had hit the North Tower but that the South Tower was secure. So he and others began heading back to their offices.

Mr. Glading, who had made it down to the sixth floor, had climbed up to the 20th when the jetliner smashed into his building. "I have to believe that anyone who was in the process of evacuating may have stopped," he said, adding the flow of people down the stairs thinned significantly. "It was too premature to make that kind of announcement," said Mr. Glading, who escaped uninjured. When the plane hit, Mr. Glading was in the stairwell and smelled smoke. "The building was shaking like hell, and I thought I better get out of here," he said.

Labels: Oppenheimer 550 employees moves into WTF

September 17th 2006, NY Daily News, "Big Firms Feasted on Small-Biz Bucks, The rich gobbled up WTC aid meant for little guys," by Russ Buettner,

Sunday, 1:60AM

WITH FEDERAL and state lawmakers now investigating, the Daily News has continued to unearth evidence that tens of millions of dollars in 9/11 recovery grants went to huge multinational corporations instead of the small businesses that Congress intended. A News review of 1,000 small-business grants, conducted as part of the newspaper's ongoing investigation into New York's handling of the $21.4 billion federal 9/11 relief package, raises serious questions about whether more than 40% of those recipients would meet any definition of a small business - other than the one used by the state's economic development agency.

The latest findings include small business money going to concerns owned by 28 Fortune 500 companies - including Tyco, Archer Daniels Midland, Con Edison, Borders bookseller and Xerox. These firms received a total of $9.4 million that the state has claimed it gave to small businesses.

The grants examined by The News were among 24,000 made under the 9/11 small-business programs by the Empire State Development Corp. and its subsidiary, the Lower Manhattan Development Corp.

The 400 grants being questioned by The News totaled $40 million, according to records.

Other findings:

Some $11.1 million went to the affiliates of 26 companies that reported at least $1 billion in revenue the year of the attacks, including retail giant Abercrombie & Fitch, real estate powerhouse CB Richard Ellis, and companies owned by supermarket and gasoline magnate John Catsimatidis.

Another $5.8 million went to 19 companies with revenue between $100 million and $1 billion, which exceeds most definitions of a small business.

That list includes Central Parking, which owns parking garages nationwide, and Ark Restaurants, owner of restaurants in Washington, Las Vegas and Manhattan, including Bryant Park Grill, Canyon Road, and, at the time, Lutece.

Another $4.3 million went to businesses controlled by 14 investment firms or banks that have assets in excess of $1 billion, including branches of some of the largest banks in Asia.

Millions more went to large, privately held businesses, many with offices across the country, for which revenue figures are not readily available.

Ignoring or missing who actually owned a grant applicant made giants look small. Massive real estate owners and international powerhouses were approved as if each local office or building under control was a separate mom-and-pop shop. Collecting through several subsidiaries, some even exceeded the $500,000 cap that Congress set for the programs to recoup economic losses.

For example, real estate giant Brookfield Properties, collecting through several subsidiaries, received $900,000 in small-business recovery grants (BRGs) specifically for economic losses, and received an additional $642,500 under a small-firm business retention program.

Also, Retirement Systems of Alabama - manager of $26.6 billion in assets - collected a $150,000 small-business grant through a subsidiary that owns the office tower at 55 Water St.

Then there are the subsidiaries of three multinational giants that received small-business money but have also garnered more than a billion dollars in contracts for the reconstruction of Iraq.

Parsons Transportation, a local subsidiary of Parsons Corp., a worldwide engineering and construction firm that has been awarded nearly $1 billion of work in Iraq, received two 9/11 grants totaling $900,750.

But in 2001, the parent company was ranked the nation's 74th-largest privately owned company by Forbes magazine, with revenue of $2.4 billion.

We followed rules, co.'s say

Many recipients that returned calls from The News pointed out that they had simply followed the programs' rules, with a few adding that the development corporation was well aware that they were applying as the local office of a Fortune 500 or major multinational firm.

"We never claimed we were a small business," said Richard Jurek, a spokesman for grant recipient Northern Trust, a Chicago-based Fortune 500 bank and financial services company. "We fully disclosed who we were."

The awarding of small business aid to these companies never would have happened had the ESDC followed federal Small Business Administration rules for determining whether a firm is eligible for government small-business programs.

The administration links all businesses, including parent companies and subsidiaries, as one applicant. The agency's rules for annual revenue and number of employees are much stricter than the ones used by the Empire State Developement Corp.

The ESDC used a definition of a small business that SBA uses only for research purposes. And it sometimes neglected a key element of that loose definition.

For statistical research, SBA defines a small business as an independent firm with fewer than 500 total employees at all locations. SBA considers firms not to be independent if any entity has the power to control it, most commonly through ownership.

The ESDC's rules for Business Recovery Grants, the largest such 9/11 program, required applicants to report employees worldwide. The state reviewed applicant's tax returns to research links to bigger firms.

But the ESDC frequently missed those connections, as The News' findings show.

Financial hits

The rules for another program, the Small Firm Attraction and Retention Grants, or SFARG, made no mention of employees in other cities or countries. The agency now acknowledges that the biggest firms in the world were eligible, so long as they had a downtown office with 200 or fewer employees. The ESDC argues that the BRG program alone met Congress' mandate that $500 million go to cover the economic losses of small businesses.

To be sure, the local operations of some well-heeled grant recipients took hard financial hits from the attacks.

Catsimatidis, who said his supermarket and gasoline empire now brings in more than $3 billion a year, said he would have closed one of his two Gristedes stores in Battery Park City had he not received $516,268 in grants along with a favorable new lease.

"That's what induced us to remodel the store and reopen it," Catsimatidis said. "We all suffered down there."

But many of the recipients' parent companies still had tremendous wealth at their fingertips - and were never at any risk of going out of business.

The chairman of the Munich-based Allianz told shareholders that the attacks and the recession "combined to have a devastating effect on our operating results," with adjusted net income dropping 32% to $1.4 billion.

Allianz employed 179,946 people worldwide in 2001, with revenues of nearly $86 billion. A local office of its subsidiary, Fireman's Fund Insurance, received $755,000 under two grant programs.

In other cases, the recipient's accounting records make it appear that taxpayers wound up simply covering part of their insurance deductible.

Borders - with sales in 2001 of $3.38 billion - told its shareholders that the loss of a store in 2 World Trade Center "was not material to the company's consolidated fiscal 2001 results," according to a securities filing.

By this year, Borders had collected $19.9 million in insurance claims from the lost store. Still, the ESDC awarded Borders a $95,000 grant for the same location.

Energy giant Con Ed estimated that it took a $430 million hit from the 9/11 attacks. In February, the company told shareholders that it had collected $76 million from insurance and $93 million in federal grants, adding that it planned to pass the rest of its losses on to customers.

For 2001, Con Ed reported revenue of $9.39 billion and 13,953 employees, SEC filings show. But the ESDC awarded its subsidiary, Con Edison Development, $52,500 under the SFARG program.


Check out our web site at for a list of more of the mammoth companies that received grants intended for small business.

May. 01, 2008, Time Magazine, "Rules of Disengagement,"

What's valued at more than $231 billion? Answer: the assets of some 3.8 million current and former federal employees, everyone from letter carriers to U.S. Senators, whose retirement funds are socked away in the Thrift Savings Plan (TSP), one of the largest and fastest-growing 401(k)-style funds in the U.S. If Senator Joseph Lieberman of Connecticut has his way, the TSP will soon radically alter the way it picks some of its stocks. Lieberman told TIME he will introduce legislation to give all TSP participants the option to disinvest in companies that do business in or with countries labeled by the U.S. as state sponsors of terrorism. That list currently includes Iran, North Korea, Syria and Sudan. "Terrorism is the greatest challenge to our security today, and the Federal Government is working night and day to prevent and prepare for it here at home and to combat it overseas," Lieberman told TIME. "Federal employees should be given the opportunity to opt out of investing in companies that do business with state sponsors of terrorism, and the companies themselves must understand that there is a price to pay."

Lieberman's initiative will add momentum to an antiterrorism bandwagon that has already started to roll. Last month, FTSE, a big provider of indexes, and the Conflict Securities Advisory Group (CSAG), a research consultant, launched a "terror free" index that excludes assets for some 400 foreign firms that operate in terrorism-supporting countries. Northern Trust, a huge fund manager that caters to both individuals and institutions, will soon roll out investment products based on that index. A source familiar with the naughty list says both ABB, a Swiss engineering giant that does business in Iran, and the China National Petroleum Corp., which operates in Sudan, are included.

The tool is not limited to multibillion-dollar funds: CSAG is also offering a free service called the Terror-Free Calculator ( Very few U.S. mutual funds have so far embraced terror-free investing. But as it expands, this device will let anyone evaluate his own mutual funds. Parametric, another big asset manager, last month produced a terror-free screen of stocks that is available through intermediaries including Smith Barney, Merrill Lynch and Bank of America. Credit Suisse has also released a new terror-free product.

Predictably, all three presidential candidates have endorsed the terror-free concept. In California, Governor Arnold Schwarzenegger recently signed a measure terminating investment by the state's huge pension funds CalPERS and CalSTERS in companies doing business in Iran. At least 19 states, including New York, New Jersey, Texas, Pennsylvania, Maryland, Missouri and Louisiana, have proposed or passed laws requiring state pension-plan sponsors to divest from firms with business links to terrorism-sponsoring nations.

Companies in Europe, in Asia and elsewhere face no such restrictions. Many, like France's energy behemoth Total or Russia's Lukoil, are only too happy to sidestep American competitors as they pursue business in nations like Iran, which badly needs outside help for its oil industry. If the terror-free trend should spread, those companies could face significant divestment by U.S. shareholders. Other big-name international companies that have done business with outlaw states include Siemens, Hyundai, Alcatel, BNP Paribas and Statoil. The roster of some 400 global companies excluded by the FTSE/CSAG index includes many that trade on U.S. stock exchanges.

Almost no U.S. companies trade directly with rogue states because federal law forbids commerce with countries found to be state sponsors of terrorism. In the past, foreign subsidiaries of General Electric, Halliburton, Aon and Foster Wheeler have all done so legally. But these companies were approached several years ago by folks like New York City pension authorities and agreed to terminate or eventually end their involvement.

What happens if U.S. products get transshipped to terrorism-supporting countries--say, if Pepsi or Kleenexes or Marlboros end up in Tehran? Nothing. The screening focuses solely on big transactions, usually with signed public contracts that are disclosable by publicly held companies; black-market materials, transshipments and the like are not in the mix.

The proposed legislation comes at a tough time for investors because with the dollar sagging, experts recommend a slug of foreign stocks and bonds for a diversified portfolio. Critics, including some U.S. fund managers, claim that terror-free investing will mean missed opportunities. And forced divestment could have tax and transaction costs that could depress a fund's performance. According to a study by the Center for Retirement Research at Boston College, if some of the Iran-divestment bills currently before state legislatures "are passed in their broadest form, institutions may be forced to sell $18 billion in investments." Tennessee and Maine lawmakers have rejected terror-free-investment bills, expressing concern that state retirees might suffer lower returns if the provisions passed.

Proponents insist the performance of terror-free funds will not be a problem. New York City comptroller Bill Thompson, who oversees pension funds totaling $110 billion, says there is "strong interest" in establishing a terror-free pension option for the city's municipal workforce. He says according to the portfolio studies, the performance of terror-free funds will be as good as or better than alternatives. "Whenever you remove companies from the mix, there will be an impact," says Stephen Schoenfeld, Northern Trust's chief investment officer. "But when you use a very broad index like the FTSE/CSAG and remove comparatively few companies, performance is not going to change much over the long term."

Considering that "socially responsible" and "green" funds have prospered in recent years by avoiding companies that sell tobacco or pollute, the surprise since 9/11 is that more money has not flowed into terror-free investing. Advocates argue it is a nonviolent way for Americans to confront terrorism and maybe even profit from the fight,9171,1736696,00.html

Labels: Northern Trust

January 12, 1992, New York Times, "Coming to the Trade Center; Showcase for the Russians,"

Thanks to the Russian Government, the World Trade Center actually will be using commercial space at its northeast plaza building for its intended purpose -- showcasing foreign products.

The Russians have chosen to open a trade and cultural center at the center in 52,000 square feet of ground-floor and mezzanine space. They are also taking 28,000 square feet of office space.

It's a 20-year lease that the trade center says has a value of $51 million. It was born of conversations set in motion by Gronich & Company, a leasing firm whose managing director, James P. Stuckey, is New York's former development commissioner.

The retail and showroom space will be in 5 World Trade Center, at Church and Vesey Streets. The Russians' International Center for Business Cooperation, as tenant, will have an auditorium, conference rooms and whatever else it takes to galvanize trade.

A Russian delegation that included Alexei Tsaregorodtsev, chief of staff to Aleksandr Rutskoi, now Russian's vice president, met George Rossi, the trade center's rental manager, in a visit to the city a year ago. "We began talking to a group in January and they wound up in power," Mr. Rossi said.

The Russians' center, which the Phillips Janson Group is designing, is expected to open early in December.

Labels: Russians take 80, 00s.f. in WTC 5

November 4, 1992, Real Estate Weekly, "Japanese bank signs downtown. (Hokkaido Takushoku Bank Ltd. leases commercial space in Two World Trade Center in downtown New York, New York,"

A regional Japanese bank has signed a major lease in Downtown Manhattan.

Hokkaido Takushoku Bank Ltd. has committed to 22,254 square feet in relocating, within Two World Trade Center in downtown Manhattan. The 10-year lease carries an aggregate rent in excess of $8 million.

Michael Burgio, Eric Deutsch and Steve Nishiura of Cushman & Wakefield, Inc. represented the bank in negotiations.

Labels: Hokkaido Takushoku Bank Ltd., 1992, half floor in tower 2

March, 1993, Railway Age, Gibbs & Hill group acquired by UE&C -

United Engineers and Constructors Inc - Brief Article

The transportation group of Gibbs & hill has been acquired by United Engineers & Constructors, Inc., (UE&C) and will become part of UE&C Urban Services, a new UE&C subsidiary. The new company will consist of the Gibbs & Hill group in New York, UE&C's Jackson & Moreland architectural group in Boston, and UE&C's airport services and infrastructure group in Denver.

Charles Q. Miller, president of Philadelphia-based UE&C, said Gibbs & Hill offices in New York, Washington, and Chicago will become part of UE&C Urban Services. "Gibbs & Hill's expertise in mass transit and light rail systems provides an outstanding base for our expansion in the infrastructure market, projected for strong growth over the next ten years," said Miller.

Gibbs & Hill was founded in 1911 to carry out the Pennsylvania Railroad electrification, a 2,600-track-mile project completed in 1938. Today, Miller noted, Gibbs & Hill has project experience with virtually every major U.S. transit agency.

Robert S. Marrone, previously vice president of strategic planning for UE&C, has been named president and CEO of UE&C Urban Services.

COPYRIGHT 1993 Simmons-Boardman Publishing Corporation

COPYRIGHT 2004 Gale Group

March 4, 1993, New York Times, "3 Potential Tenants Reconsidering Move To the Trade Center," by Claudia H. Deutsch,


Correction Appended

Three companies that had planned to move into large offices in the World Trade Center before the explosion last Friday are now reconsidering the move. The three companies had been negotiating for a total of 690,000 square feet, equivalent to 10 to 15 floors of office space.

The companies -- Rollins Hudig Hall, Bank of America and Fiduciary Trust -- have now postponed those deals, while a construction consultant that was separately hired by all three, Bennis & Reissman, double-checks the Port Authority's own assessment of how long it will take to make the twin towers safe and functional.

Robert Bennis, a principal of Bennis & Reissman, said he found nothing "detrimental to eventual occupancy," but he was far less upbeat about timing. "I think a month is optimistic for opening these buildings," he said.

Customizing and Other Worries

Rollins Hudig Hall was preparing to sublease floors 102 to 105 from Shearson Lehman Brothers, and Bank of America and Fiduciary Trust were negotiating directly with the Center.

Officials from the companies would not comment on their plans, but brokers involved with the deals say that they are questioning whether they will have enough time to customize the space by the time they need it and whether their employees will feel comfortable moving to the towers.

Port Authority officials say it may be a month or more before the buildings are reopened. In addition, there are indications that some present tenants -- including the Federal Home Loan Bank -- are considering not renewing their leases.

A lengthy closing would worsen the problems of the 350 banks, brokerage firms and other tenants of the Center that were shut out by the bombing.

Yesterday, as the Port Authority tried to reassure tenants that the buildings would reopen soon and that they would be safe, landlords and real-estate brokers were rushing to fill some of the acres of vacant office space in lower Manhattan with World Trade Center tenants.

They couched their efforts in terms of offering help, some even making space available rent-free for displaced tenants. But they readily concede that they expect to turn a fair part of their temporary guests into permanent residents. And they are already having a measure of success persuading companies not to move into the center, or to move out after their leases expire.

Numerous brokers are trying to pull off 11th-hour deals with tenants that had almost decided to move into the center.

The brokers' efforts are a major concern to the Port Authority, which gets 15 percent of its annual revenues from the World Trade Center. It is also a concern to city officials who fear some tenants, or prospective tenants, will be wooed away from New York. The city has estimated that companies and government agencies could lose $692 million if the Center were closed for just a week, and $1.07 billion if the buildings were closed for a month.

Fourth of District Vacant

At the same time, the commercial real-estate industry has been among the hardest-hit victims of the stubborn recession, and the temptation to exploit the center's troubles is intense. According to the Real Estate Board of New York, there are 22 million square feet of vacant office space in lower Manhattan, more than a quarter of the total office space. Asking rents have not risen much above $28 per square foot annually, down from the high $30's less than four years ago. World Trade Center rents range about $25 to $45.

At a briefing yesterday morning, Anthony E. Shorris, the first deputy executive director of the Port Authority, played down the chances of tenant flight. "I have yet to find a tenant who wants to move out," he said.

Discussing the renovation and repair plans, Mr. Shorris said: "I don't think anyone will believe the building is not a safe one. The building that people left on Friday is not the one that people will come back to in a month."

As word of the three interrupted deals hit the street, city officials met with representatives of the companies to forestall any chance that they would leave the city. And agents of other Manhattan buildings began calling those and other companies that were negotiating with the center, trying to get them to reconsider.

Calls From Rival Buildings

"Everyone is getting calls from people in also-ran buildings, trying to reopen negotiations," said Mary Ann Tighe, executive managing director of Edward S. Gordon Company, a major commercial brokerage firm.

Some already claim success. Karla Kudatzky, an agent with Galbreath Riverbank who manages 90 West Street, says she is "99 percent certain" that a center tenant she has been chasing for a year is going to take the 14th floor of her building, even though it has a year to go on its Trade Center lease.

One broker close to the Federal Home Loan Bank of New York said the institution was undecided between renewing its lease at the top of One World Trade Center, or moving to 7 World Trade Center, a non-Port Authority building nearby. Then Friday's explosion happened; the bank signed with Building 7. "That explosion tipped the balance," the broker said. Officials of the bank could not be reached for comment last night.

Similarly, Michael Myers, president of Newmark Equity Advisory Group, had been trying to relocate a foreign embassy from the center to midtown for months. After the explosion, the country's ambassador called and approved the deal. "He said the embassy employees just no longer felt comfortable in the center," Mr. Myers said.

Rents Not Seen Rising

The uncertainty about the towers has not yet pushed rents up yet in other buildings. In fact, yesterday the Real Estate Board announced that many of its members, including such large property owners as Olympia & York, the Rudin Management Company, the Mendik Company, and Jack Resnick & Sons, had offered to make a total of 3 million square feet of space available to displaced tenants, for the cost of electricity, taxes and cleaning, for about a month. Several brokerages have also offered to match needy tenants with vacant office space, without charging commissions.

Still, amid the benevolence is a good deal of opportunism, but it might not be fatal to the Port Authority. No landlords expect that the World Trade Center is permanently out of the running for tenants. And they are being careful not to burn bridges, either with such powerful neighbors or with the city, which has asked the industry to help out.

Moreover, some buildings may find that the ripple effect from the explosion is not all to their benefit. Tenants are now more likely to look closely at other buildings' security systems and fire safety systems, which may not appear any better than the center's.

Most experts say that the ultimate number of permanent defectors from the trade center can be controlled by the Port Authority. "If they assess the damage and fix it properly, people will want to stay," said Raymond T. O'Keefe, an executive director of Edward S. Gordon.

Labels: the PA, gets 15 % of its annual revenues from the WTC, Rollins Hudig Hall, 1992, after bombing Federal Home Loan Bank of New York moves out of 105 floor of tower 1 and into Building 7

April 23, 1993, New York Times, "BankAmerica Signs A Lease for 8 Floors At the Trade Center," by Thomas J. Lueck,

The BankAmerica Corporation announced yesterday that it had signed a 15-year lease to move 1,100 workers to eight floors of Tower One of the World Trade Center.

The move by the nation's second largest bank holding company was portrayed by bank executives and government officials as a vote of confidence in the Twin Towers after the terrorist bombing of Feb. 26. In the wake of the explosion in lower Manhattan, fears surfaced that security concerns would prompt many companies to move out when their leases were up and others to decide not to move in.

It was clear yesterday that the Port Authority, which owns the trade center, was forced to offer extraordinary incentives. Officials close to the negotiations said BankAmerica would receive two years' free rent, effectively giving it a square-foot rental lower than many other tenants in the towers pay.

The bank's decision to move workers from at least 10 other buildings in Manhattan followed weeks of rumors that it had changed its mind about moving into the tower after the bombing. Bank officials said at a news conference that it had looked at alternative buildings in New Jersey, Phoenix and California, and had, in fact, postponed any decision after the bombing.

But Dan Costello, the corporation's executive vice president in charge of real estate, said that after bank officials reviewed security systems in the World Trade Center, including improvements made since the bombing, they were convinced that the complex was "the safest building in New York, and perhaps even in the country."

BankAmerica executives announced their decision at a news conference attended by Mayor David N. Dinkins, Gov. Mario M. Cuomo and other officials, who described it as a major expression of confidence in the troubled complex. "BankAmerica is sending an important message to the world that the World Trade Center is back," Governor Cuomo said.

Although not all details of the deal were disclosed, it was clear that the city, the state and the Port Authority of New York and New Jersey had mounted an aggressive campaign for at least nine months to lure the company to the World Trade Center and prevent it from leaving Manhattan. 

Sales-Tax Breaks

The bank holding company, second in size to Citicorp, is to receive sales-tax breaks and other incentives from the city and state worth $15.5 million over the 15 years. The package includes a promise by New York City to buy some machinery and equipment to be used by BankAmerica.

BankAmerica, based in San Francisco, also said yesterday that it had signed a new 20-year lease and will retain 360 employees at the Bank of America Building at 335 Madison Avenue, near 46th Street. It will also retain 240 employees at 40 East 52d Street, the former Security Pacific Building. Its 1,700 Manhattan employees are in international banking, foreign exchange trading, stock trade processing and other operations. 

[Bank of America had 1,100 employees at WTC. on 8 floors of WTC1, or approximately 945,000s.f. However, CNN reported that BoA leased 132,586s.f. on floors 9, 10, 11, and 81., or 120s.f. per employee at 1,100 employees.]

Financial incentives have become all but routine in government efforts to attract and retain big business. In an example last year, Morgan Stanley & Company, which had threatened to move 4,100 employees to Stamford, Conn., received a tax-incentive package worth $39.6 million over a 10-year Manhattan lease.

But, according to people close to the negotiations, who spoke on the condition of anonymity, it was deep concessions offered by the Port Authority that were most critical in attracting BankAmerica. The effort almost certainly created political conflicts for the agency since it is accountable to both New Jersey and New York and was courting a large tenant that might otherwise have selected a New Jersey office building.

After BankAmerica begins paying rent, authority officials said, it will pay between $25 and $35 a square foot. Though they declined to be more specific, they said the Tower One space would have brought 20 percent more in the robust years for Manhattan real estate in the mid-1980's.

It was unclear yesterday whether the Port Authority had offered the free rent before the Feb. 26 explosion, or whether BankAmerica used the uncertainty after the bombing to extract the further concessions.

BankAmerica had made a verbal pledge to lease its World Trade Center space by December, several officials said. But by the February blast, they said, that oral promise had not been made formal in a legally binding contract, and a legion of economic development officials set out on a fresh campaign to persuade the bank holding company to sign its lease.

With BankAmerica occupying eight floors of Tower One, authority officials said the complex would be 92 percent occupied. The rate is higher than before the explosion, when 88 percent of the complex was filled.

BankAmerica's committment to the complex comes at a time when most tenants in the buildings say life has returned almost to normal.

No large tenants have left the complex since the bombing. But because all are required to meet legal requirments of their leases and would lose money if they left before the leases expire, it is not known whether some will elect to leave when they have the option in coming months and years. 

Not Back in Offices Yet

One of the last remaining World Trade Center tenants that has not yet returned to its offices in the complex is Deloitte & Touche, the accounting firm, which has seven floors in Tower Two and moved 1,200 workers to other buildings in Manhattan. Because of the pressures of the government's April 15 deadline for filing income tax returns, the firm had said it had not plans to return to its trade center offices until after that deadline.

[Deloitte & Touche, seven floors, or approximately 315,000s.f. for 1,200 employees, or 262 s.f. per employee.]

Yesterday, Paul Higgins, a Deloitte & Touche spokesman, said the firm had still not returned. The reason, he said, is that cleaning the firm's Twin Tower offices -- the Port Authority's responsibility -- had not been completed. He declined to say when the firm would return.

But other companies said their return to the trade center complex was accomplished without any snags.

"There are no lingering problems," said George Mullen, executive vice president of Fiduciary Trust International, an investment management concern, which returned with 500 employees to five floors of Tower Two on March 25. Since then, it has signed a lease for an additional floor for 45 employees.

Labels: 1993: Bank of America leases 8 floors in tower 1

May 9, 1993, New York Times, "The World Trade Center; A Kinder, Gentler Trade Center," by Claudia H. Deutsch,

SUPERFICIALLY, it's business as usual at the World Trade Center. People throng the concourse and the plaza, going to shops and subways and, of course, to and from work.

Free PATH rides last week from the center increased traffic even more, and center-subsidized sales at stores and restaurants in the complex this coming week will probably bring even more people in.

Tenants, meanwhile, are nearly all back in their offices. And lease negotiations continue apace. BankAmerica just signed a much ballyhooed 15-year lease for eight floors in Tower One, and the law firm of Brown & Wood will soon close on a deal for expansion space in Tower Two.

The flurry of litigation that many expected from tenants trying to get out of leases after the Feb. 26 car bomb explosion closed the towers down doesn't look like it will materialize. In fact, with BankAmerica coming on, the center will be 92 percent occupied, a heady rate for any building in this space-glutted city.

But does this mean that the bombing has left no lasting impact on the center?

Not at all.

Indeed, the World Trade Center that is emerging from its trauma is a changed place. Some changes are already evident to even the most casual visitor -- who will need a pass to get beyond the ground floor. Others are in the offing: the center's physical plant, state-of-the-art when the buildings opened in the early 1970's, is about to go through an accelerated overhaul.

But perhaps the most dramatic changes of all will be impossible to see, though easy for tenants to feel: the Port Authority of New York and New Jersey, the center's owner, is finally dealing with the rampant dissatisfaction with services and maintenance that have plagued the Twin Towers for years.

"We were already upgrading the physical systems and customer service when the blast happened," said Charles J. Maikish, the World Trade Center's director, whose watch-alarm still goes off at 12:18 P.M. each day so he can pause for a moment in memory of the six people who died when the bomb went off. "Now we are going to do even more."

Indeed, the signs of post-bomb change are all around. There's a new visitor's desk in both towers, where visitors who once could roam free must sign in before gaining access to the elevators. All tenants carry identification cards now, and some -- those that use the building during off-hours, for example -- will get ID cards with holograms that are almost impossible to copy.

No one can make it to the bowels of Tower One, once a free-access garage and tenant storage facility, without a security escort. The elevators, the electrical systems, all of the once-revolutionary-but-now-antiquated cogs in the center's physical wheels are being overhauled. And it's hard to miss the two huge chillers on Vesey Street and Liberty Street, temporarily there to make sure the buildings remain cool while the bomb-damaged chillers in the basement, the heart of the air-conditioning system, are repaired.

BUT perhaps most important to tenants, the post-bomb center is a much more tenant-friendly place. Coffee cups and welcoming letters awaited all tenants as they moved back in. The Port Authority forgave any rent for tenants evacuated after the bombing, even though not all leases provided for such. It paid moving costs, and is paying tenants about $150 an employee to cover other costs. It is offering stress counseling to tenants' employees and free parking at the nearby Battery Park Garage for those who used to use the now-gutted garage.

Mr. Maikish and his staff are visiting large tenants every day, smaller ones every week, just to make sure things are going well. And a new team of customer service people is gearing up to make sure that every tenant request, from a paint job to a lease change, is expedited, and with grace.

"Their response to tenants after the blast has definitely helped their tenant relations," said Barry Gosin, the Newmark Real Estate broker who is representing Brown & Wood.

It's quite a change for an office complex that, until recently, was known as one of the city's most arrogantly managed.

Indeed, for all of the 70's and much of the 80's, the Trade Center, with its 10 million square feet of rentable space, was the only Class A space that downtown had to offer. It not only ruled the market, it was the market.

Rents, which could go as high as $55 a foot for high floors, were nonnegotiable. Rarely was a tenant offered more than $20 a foot toward the cost of building offices. Leases were inflexible, with sublets hardly ever allowed. Tenants could wait weeks before a burned-out bulb was changed or before the engineering department would approve a simple office change like a moved wall. The Port Authority made significant profits on any services it did finally provide; Mr. Maikish says it was known to charge as much as $25 for changing a lightbulb.

Cleaning was superficial, and cosmetic maintenance was haphazard. A vandal pulled a veneer strip off one elevator in Tower One and it sat that way for weeks.

"A truly Class A building would fix something like that in two days," said one disgruntled tenant.

Mr. Maikish does not deny the allegations of neglect.

"We were complacent, and our complacency reflected itself in the quality of service," he conceded. "Attention to tenants was simply not pinnacle."

Mr. Maikish insists that all that began to change a couple of years ago, when the Port Authority recognized that it had 3 million square feet coming up for renewal between 1992 and 1995 and that this time it would have to compete for them with the World Financial Center, One Financial Square and other premier buildings that had added 12 million square feet of Class A space to downtown.

"We knew we had to become more flexible and responsive," Mr. Maikish said.

Mr. Maikish says the center has become both. It is riding herd on its own vendors, for example. It now has five cleaning services, not just one, and is giving out only short-term contracts. It also now has a 20-person group that does nothing but handle tenant complaints and requests. In the offing is a separate maintenance group devoted purely to handling tenant requests, so that no tenant gets short shrift if a large number of staff members are called to handle a general maintenance problem in the building's base.

"We no longer feel like we have to deal with all kinds of Port Authority departments when we need something," said John C. Feldcamp, executive director of Brown & Wood, which has 120,000 feet in the center and is looking for at least 10,000 more.

A few months ago Mr. Maikish hired separate representatives to deal with Japanese and Taiwanese tenants, many of whom are more willing to complain to their home office about problems than to confront management. And Mr. Maikish and his staff are regularly visiting Tokyo and other Asian home offices to make sure that they learn of problems before they result in a move.

"We'd hear that our Japanese tenants were looking in midtown, or we'd notice that they were simply not talking to us about expansion space," Mr. Maikish said. "We had to act on the signals we were getting."

It is pretty easy to believe Mr. Maikish that all of the tenant relations changes would have occurred even without the bomb. It is not as easy to figure out what might have happened with the center's physical plant.

Indeed, the bomb went off while the center was in the midst of a five-year, multimillion dollar renovation program that began in 1992. Almost every aspect of that program is getting a post-bomb fillip added in.

Take the 250 elevators, all marvels of efficiency when installed more than two decades ago but obsolete by today's standards. They depend on electrical switches; for some years, the authority has planned to replace those with microprocessors, those electronic traffic cops that make sure all elevators are not on the ground floor at the same time.

Now the elevators have emergency lights, operated by battery packs. And the authority may put in magnetic swipes, security devices that will not let an elevator door open on specific floors unless the passenger has an electronically readable identification card.

The center had hoped to have requests-for-proposal out for a new 10-year maintenance and modernization program for the elevators this month and may still do so for the smaller buildings. But for the two towers, where some elevators are still sooty from the bomb, they probably won't be out until September.

THE scheduled overhaul and expansion of the electrical systems is getting another once-over, too. The buildings, built in the pre-fax, pre-personal computer days, are powered from eight Consolidated Edison high-tension feeders that feed into one primary distribution center, which in turn delivers about 3 or 4 watts per square foot through 26 substations; modern telecommunications require more like 8-to-10 watts.

At the time of the bombing, the center had already planned to augment its transformers and add two more high-tension feeders, with an eye to providing those 8 to 10 watts within the next 4 or 5 years. But now engineers are talking about splitting the feeders off into two separate distribution centers. They are expected to decide within two months.

"It would cost a lot and we would no longer have absolute redundancy between the feeders," Mr. Maikish said. "But it would make it harder to knock out the entire system."

The increased use of telecommunications devices, with the concommitant heat they generate, has taxed the building's cooling systems as well. Indeed, many tenants have complained of bad air-conditioning for years.

The center had planned to build a new water line in the fall and to install an extra chiller in 1995. Now it hopes to have the chiller by July. The bomb pretty well knocked out six of the seven existing chillers, but the streetside rentals should carry the air-conditioning until they are fixed.

The center hopes to have five of the seven operating by summer, along with some newer ones. The eventual goal, post-blast, is the same as it was pre-blast: 64,000 tons of chiller capacity, a 15,000-ton increase above what is available now.

Security and fire safety are striding forward, too. Guards now patrol the staircases and a new fire alarm system, complete with audible voice lines directly into each tenant's offices, is in the works.

And, reacting to the difficulty that tenants had spotting signs in the smoke-filled staircases, the center has contracted with the Switzer Group, Manhattan space planners, to put in signs made of a sulfur-based crystalline substance sandwiched within plastic that will literally glow in the dark.

"The law says you must have re-entry signs but no one remembered to pass a law that you had to be able to see them," said Robert Sutter, the Switzer Group's president. The group is also re-evaluating an ongoing project to replace corridor signs and directional signs in the lobbies, all with an eye to how well they would function in a fire.

Now Mr. Maikish and his crew are faced with marketing the spiffed-up center. Many of the Japanese tenants, for example, have leases that expire in 1995 and it is not certain that all -- or any -- will stay.

"We have not commenced negotiations with anyone, but we certainly have contacted a number of landlords with respect to our space needs," said Robert A. Rabbino Jr., a joint general manager at the Sumitomo Bank Limited, whose lease on three floors in Tower One expires in less than two years.

Meanwhile, the center is holding breakfasts for brokers to acquaint them with its capital program, its more flexible negotiation stance, and its new emphasis on tenant services. It takes out ads whenever a tenant renews and it sent representatives to an international real estate conference to discuss how it has handled the blast damage.

"It is hard to reverse a bad image that builds up through so many years, but we are trying," Mr. Maikish said.

The big sticking point still seems to be the authority's legal department. Its leases are among the town's most intractable and its lawyers have the reputation of drawing negotiations out forever.

"The business staff is cooperative, but the rigidity of the legal department is monumental," said Dan Gronich, head of the Gronich & Company brokerage firm.

MR. MAIKISH said he was now allowing some sublet clauses, and since the bombing, is willing to include various safety and security assurances in leases. "The difference is that now, every clause is subject to negotiation," he said.

But brokers and tenants say negotiations can still be rough, particularly since many tenants now hold out for clauses that cover indemnification and rent abatement in case of future terrorist attacks, as well as clauses specifying the nature of the buildings' safety and security precautions.

Although Mr. Maikish and his crew are willing to discuss all these things, brokers report that they are not necessarily caving in on any of them.

"The port is negotiating as though it is coming from a position of strength," said Michael Burgio, a Cushman & Wakefield broker who is negotiating a deal in the towers. "They say, 'We have enhanced security, we are giving you a better product.' "

Some tenants say they have a point.

"There is no question that we have blast-related issues we want answered in the new lease," said Mr. Feldcamp. "But even though we have more demands, we also have a greater appreciation of the strengths of this building. How many buildings, after all, could have survived that bomb?"

Photo: For tower tenants, 'Welcome Back' presents. (pg. 1); New communications desks allow monitoring of all areas in the towers. (pg. 13)(Photographs by John Sotomayor/The New York Times)

Labels: Important article, critical of PA

September 29, 1993, Real Estate Weekly, "Insurer consolidates 4 Manhattan locales. (Rollins Hudig Hall Group Inc. subleases commercial space at Two World Trade Center, New York, New York)"

The international insurance firm Rollins Hudig Hall Inc. has subleased 172,000 square feet of space at Two World Trade Center.

The commitment is one of the year's largest Downtown, and represents a major consolidation for Rollins Hudig Hall, which had previously been housed in four Midtown and Downtown offices.

Rollins Hudig Hall, an international insurance brokerage and reinsurance company, is subletting its space at Two World Trade Center from Smith Barney/Shearson, and will occupy all of floors 102, 103 and 105 as well as part of 104. The sublease has a term of eight years, seven months.

Rollins Hudig Hall was represented in the Two World Trade transaction by ESG's Michael Geoghegan, consulting director, Carol Nelson, executive vice president, Bruce E. Surry, managing director, and Mary Ann Tighe, executive managing director.

The consolidation is prompted by the combining of the operations of Frank B. Hall Co. and Rollins Burdick Hunter. The company is currently occupying space at 605 Third Avenue, 261 Madison Avenue, 88 Pine Street and One Liberty Plaza. The consolidation at Two World Trade Center will involve some 650 employees.

Separately, ESG has negotiated a sublease of Rollins Hudig Hall's former space at 605 Third Avenue. In an expansion move, Neuberger & Berman, a current tenant in the building, will sublease 58,000 square feet for a term seven years, coupled with a long-term extension.

The ESG team that negotiated the 605 Third Avenue sublease, on behalf of Rollins Hudig Hall, comprised David Berkey, Richard Karson, managing director, Carol Nelson, executive vice president, and Mary Ann Tighe, executive managing director.

Labels: Rollins Hudig Hall Inc. 102, 103, 105, parts of 104

September 20, 1995, New York Times, "Real Estate; The World Trade Center increases business from medium-sized companies, not from mega-deals," by Mervyn Rothstein

THE SCOR U.S. Corporation, the American subsidiary of the French reinsurance company SCOR S.A., has leased 60,000 square feet of office space at 2 World Trade Center.

The lease, for the 23d and part of the 24th floor, has a total value of more than $30 million, said Charles J. Maikish, the trade center's director.

Mr. Maikish declined to provide the specific rent, but called it "a market-rate deal," defining market rate as an annual rent in the "low $30's a square foot."

The deal, he said, was similar to many in recent months at the trade center and in the rest of lower Manhattan. "The trend in lower Manhattan has been consolidation," he said. SCOR had been at 110 William Street, he said, and bought a smaller company, Unity Fire and Marine, whose offices were at the trade center.

"When it bought that company," he said, "SCOR decided it wanted to consolidate the two offices. It had a choice of doing it here or on William Street. It was also considering 140 Broadway. But it chose the trade center."

Mr. Maikish said that the recent tendency at the trade center had been to fill space "not through megadeals but with small and midsized companies."

"In the last year there have been 60 individual new leasing transactions," he said. Most of the deals, he said, involved international companies on their first forays into New York. "We've been very active and successful in that market," he said.

The 16-acre trade center complex has about 12 million square feet of rentable office space. It consists of two 110-story office towers, a 47-story office building, two 9-story office buildings, an 8-story United States Customs House and a 22-story hotel, the Vista, which is on the market.

Mr. Maikish said the occupancy rate at the trade center was 86 percent, down from 88 percent three years ago, before the bombing at the trade center in 1993. But he said that some of the difference could be accounted for by the departure of the consulting and accounting firm Deloitte & Touche, the only major tenant not to move back after the bombing. Deloitte & Touche vacated about 300,000 square feet and took about 320,000 square feet nearby at the World Financial Center.

[or 42,857s.f. per floor for 7 floors]

"Deloitte & Touche accounted for three percentage points," he said.

Mr. Maikish added that at least four big new deals were "in discussion," each involving at least 100,000 square feet, but he declined to name the possible tenants. "As large blocks of space in midtown are becoming more and more limited, more and more people are looking here," he said. Viva Madison Avenue!

Labels: SCOR U.S. Corporation rents 23rd, 24rth floor in tower 2 in 1995

November 27, 1996, PRNewswire, "Primark Corporation To Acquire Baseline Financial Services,"

WALTHAM, Mass., Nov. 27 /PRNewswire/ -- Primark Corporation (NYSE NYSE

See: New York Stock Exchange

..... Click the link for more information.: PMK) announced today that it has executed a contract to acquire Baseline Financial Services in a $40 million cash transaction from Bowne & Co. (AMEX AMEX

See: American Stock Exchange : BNE) and the company's founder, Robert Patterson. Baseline, a rapidly growing company, offers a wide array of fundamental data and information in a graphically rich format designed for the institutional money manager. It is anticipated that the acquisition will be consummated within thirty days.

The Baseline product brings leading edge and essential financial information to the investment manager in the form of dynamic graphs, charts and reports. With more than 450 client firms in North America and over 4,000 desktops, the product has gained considerable market share as a powerful tool for examining stocks, industries, and sectors. The company's founder, Robert Patterson, will continue to manage the company under a long-term employment contract.

"Baseline has a great product that has a loyal and enthusiastic following among portfolio managers. This acquisition provides new opportunities for Primark to integrate our existing data with Baseline and bring even more value to the institutional money manager," said Joseph E. Kasputys chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board.  of Primark. "Importantly, our strong global distribution capabilities can bring the Baseline product and its coverage of 7,000 US companies to the international markets. At the same time, we can combine our extensive international data with the Baseline product for portfolio managers investing internationally," he added.

Primark Corporation, headquartered in Waltham, Massachusetts, is a $600 million global provider of information technology solutions, combining advanced software and applications with some of the most accurate, timely and comprehensive databases in the world. The company, through its subsidiaries, targets the data-intensive financial, government, weather and communications/computer information markets.

SOURCE Primark Corporation 11/27/96 /CONTACT: Jim Flanagan of Primark, 617-487-2131/

January 29, 1997, New York Times, "Trade Center Sweetens Deal to Keep Brokerage Firm," by Mervyn Rothstein,

After flirting with New Jersey, Cantor Fitzgerald, a major institutional-bond brokerage firm and provider of financial information services, has decided to remain at 1 World Trade Center and expand its space. The company has leased an additional 75,000 square feet, bringing its total in the building to 175,000 square feet. The deal involves New York City tax incentives, including sales tax relief, valued at about $2 million.

The company has renewed its lease for the 104th and 105th floors -- the top office floors in the 110-story, 4.7 million-square-foot tower -- and has added the 103d and part of the 101st floors. The 15-year lease in the building, which is owned by the Port Authority of New York and New Jersey, has an aggregate value of about $75 million. Cantor Fitzgerald has 2,200 employees, about 1,000 of them at the Trade Center.

Scott Pudalov of the Insignia/Edward S. Gordon Company, who represented Cantor Fitzgerald with David Levinson, Michael Geoghegan and Janet Pierce, said Cantor Fitzgerald had considered moving to Jersey City, possibly to the Harborside Financial Center, a nearly 2 million-square-foot complex next to the Exchange Place PATH station. But Mr. Pudalov said the Port Authority had agreed to provide Cantor Fitzgerald with increased electrical and air-conditioning capacity and emergency backup power.

Cherrie Nanninga, the Port Authority's director of real estate, said many tenants at the Trade Center have requested such provisions.

Labels: Cantor leases 175, 000 s.f. in 1997 on 105, 104, 103, part of 101

August 15, 1997, Company Exco Noonan, Good Jobs NY,

Date Announced 8/15/1997

Site One World Trade Center

Total Subsidy $6.3 million

Amount tied to job creation ???

Promised Job Creation 80

Promised Job Retention 219

Length of Contract 15 years

Competing Sites Jersey City - recruited back to New York City

Conditions Exco Noonan agreed to add 80 jobs by 2002.

Notes British foreign exchange company Exco Noonan left New York City in 1991 and agreed to return after receiving an incentive package that included $3.9 million in real estate tax abatements, $2.37 million in outright grants and $400,000 in sales tax exemptions. Exco Noonan, whose employees have an average salary of $125,000, agreed to add 80 jobs within five years as part of the deal.

(In this case we list the returning 219 employees as "retained.")

September 02, 1997, New York Times, "Brokerage Leases Office in Jersey City," by David M. Halbfinger,

In a coda to a government-subsidized deal that lured a foreign exchange company, Exco Noonan, to Manhattan from Jersey City, another New York company has taken over the office space that Exco Noonan abandoned in Jersey City.

Spear Leeds & Kellogg, the New York brokerage house, has more than doubled the space occupied by its Troster Singer division at 10 Exchange Place, the sharp-tipped tower on the Jersey City waterfront, with the lease of nearly 50,000 square feet that is being vacated by Exco Noonan. Troster Singer, a market maker on the Nasdaq stock exchange, had occupied only 36,000 square feet in the building, which is owned by the Prudential Insurance Company.

Troster Singer, which was represented by Cushman & Wakefield, has been at 10 Exchange Place for seven years. In 1994, when Spear Leeds, the parent brokerage, threatened to move its 700 workers to Jersey City, New York officials granted it $2.4 million in tax breaks. The company moved to 120 Broadway instead. The tax incentives included $500,000 that was dependent on the company's hiring additional workers in New York.

Exco Noonan, a division of Exco P.L.C., said on Aug. 14 that it would move its 219 workers to the World Trade Center in return for $6.3 million in incentives from city and state agencies. Exco Noonan, which was represented by Jones Lang Wootton, assigned its lease at 10 Exchange Place to Troster Singer.


WTCA Electronic Newsletter - January 2, 1998 


NEW YORK -- The Port Authority of New York and New Jersey, owners and operators of  WTC New York, announced recently that it had signed the largest WTC lease of 1997 with Aon Risk Services, Inc. of New York, a global brokerage and consulting organization, to take seven full floors of Two World Trade Center.  The transaction is the second largest lease to be executed in Downtown Manhattan in 1997. 

Port Authority Executive Director Robert E. Boyle said, "The World Trade Center has enjoyed a surge in leasing activity this year, executing leases for nearly 1.5 million square feet of space in 1997.  Aon's lease follows major lease signings with Bankers Trust, Dow Jones, Thacher, Proffitt & Woods and Exco Noonan.  Only one large contiguous block of space remains in the entire complex. 

The WTC houses a full spectrum of business and government agencies involved in international commerce, with 435 tenants from 26 countries. 


Agreement Brings More Than 400 Jobs To New York,

Mayor Rudolph W. Giuliani and Governor George E. Pataki announced today an agreement with Exco Plc., a leading international securities, capital and money markets company currently based at Exchange Place in Jersey City, to move its 219 employees from Jersey City to One World Trade Center in downtown Manhattan.

Exco moved to Exchange Place six years ago. In addition, the move back to Manhattan will keep the company's current 241 jobs in New York City. The company will vacate space at 199 Water Street and consolidate these 460 employees in 61,000-square-feet of space on the 25th and 26th floors of One World Trade Center.

In addition to the economic activity resulting from the agreement with Exco, the company is expected to generate $11.4 million in annual city taxes.

"The recruitment of Exco to New York City demonstrates once again that New York City is the financial capital of the world," said Mayor Giuliani. "For the first time in years, companies like Exco are realizing the advantages of doing business in New York City and are making sure they have a major presence here. This is a great day for the City, our reinvigorated business climate has won back Exco and its 460 jobs."

The City's agreement with Exco, negotiated through the New York City Economic Development Corporation (EDC), includes $3.9 million in real estate tax abatements. The State is also providing a $1 million grant for equipment, a $300,000 job training grant, an interest rate subsidy grant for $650,000 and $400,000 in sales tax abatements.

"This agreement proves that because of Mayor Giuliani's leadership, companies are now deciding to move into New York City instead of from it," said EDC President Charles Millard. "Exco's decision underscores the effectiveness of our efforts to maintain and attract companies and create jobs."

Charles A. Gargano, Chairman of the Empire State Development Corporation said, "Once again, Governor Pataki and Mayor Giuliani's commitment to make New York competitive is paying off. We welcome Exco back to New York, where it can grow and thrive in New York's business friendly environment."

Exco Plc. moved its subsidiary, Exco Noonan, to Jersey City in 1991 and kept another subsidiary, Exco RMJ, at its Lower Manhattan location. Since then, the company has recognized the advantages of having both divisions in a single New York City location.

"The heart of the financial district of Manhattan provides an ideal location for our integrated operation in close proximity to most of our customers," said Exco Chairman and Chief Executive Officer Peter Edge. "The move will benefit our staff, our businesses and New York City."

EDC's Business Recruitment Division, established by Mayor Giuliani in 1996, is charged with promoting the competitive advantages of New York City to businesses considering relocating or consolidating in one of the five boroughs. Including this agreement, the City has directly recruited 10 companies for a total of over 1,200 jobs. 

August 20, 1997, Real Estate Weekly, "Thacher Proffitt & Wood signs lease at 2 World Trade Center,"

Thacher Proffitt & Wood, a preeminent law firm dating back to 1848, restructured its office lease for approximately 112,000 square feet of space at 2 World Trade Center. The value of the new, 15-year term is approximately $65 million.

The complex transaction involved negotiating an early renewal for the firm's existing 81,000 square feet, and a new lease for an additional 31,000 square feet,  structured to be co-terminus with the initial lease. The firm will occupy contiguous space on floors 39 and 40, and partial space on the 38th floor. Additionally, the negotiation involved options for space on the remainder of the 38th floor, and space on the entire 37th floor.

Wayne LaGary, senior managing director, Robert D. Goodman, senior managing director, and Phillip Lipper, managing director with the Downtown New York office of Julien J. Studley, Inc., exclusively represented the tenant in the negotiations. Thacher Proffitt & Wood's negotiations were led by Jack Williams, managing partner, Robert Lincoln, executive director, and Joseph Philip Forte, chairman of the real estate practice group. Outside counsel to Thacher Proffitt & Wood was Charles Salfeld of Bachner, Tall, Plevoy & Misher. Acting on behalf of The Port Authority of New York and New Jersey were Cherrie Nanninga, director of real estate, George Meyer, manager of office leasing, and Gail Mitchell, senior lease account manager.

According to LaGary, "The unanimous decision by the partners to remain at the Trade Center was driven by the favorable economics of the transaction." He added that the terms of the deal include retrofitting the firm's space to provide for data and communications upgrades.

According to Nanninga, "The Port Authority worked aggressively to accommodate Thacher Proffitt & Wood, a long-term, prestigious tenant of the Trade Center, to meet its current and future operating needs."

Labels: 1997, Thacher Proffitt & Wood leases 38, 39, 40 floor in Building 2, missing from CNN tenant list

May 17, 1995, Real Estate Weekly, "REIT or trophy: what's WTC worth?"  by Lois Weiss,

Words: 2257


ISSN: 1096-7214

The fantasy of owning the Word Trade Center, the ultimate trophy property - may become a reality under a plan being investigated by the Port Authority of New York and New Jersey. Last Thursday, Chemical Securities was chosen to study the feasibility of selling the Twin Towers, along with any financial hurdles that might need to be addressed.

For some folks this is deja vu, as a 1984 report made by Bear Stearns in the middle of the steam rolling market concluded the Port Authority should hold onto its 107-story skyscrapers and assorted supporting players. Now, ten years and one governor later, with privatization as the key word, a new round of investigation has begun.

Some of the city's top investment brokers wondered whether the complex is too much for any one investor and suggested the property might be turned into a securitized property such as a real estate investment trust (REIT) that would be traded on the stock exchange. This might be one way of collateralizing current bondholders while obtaining a cash infusion for the Port Authority. On the other hand, last Thursday's bankruptcy filing by the owners of Rockefeller Center, who pay their mortgage to a REIT, left some wondering if a one - entity REIT makes investment sense.

The WTC property itself consists of the twin towers, known as One and Two World Trade Center, the Commodities Exchange building at 4 WTC, the Dean Witter building at 5 WTC and Six World Trade, which is the U.S. Customhouse that merely pays operating expenses. Three WTC is the newly renovated Vista Hotel that connects Towers One and Two, but that will be marketed under a different arrangement. InterBank/Brener Hospitality Consultants helped the Port Authority to chose Eastdil and Knight, Frank & Rutley to market the hotel property. The properties are all currently held as one tax lot of 13,867,981 square feet.

What is for sale does not include Larry Silverstein's Seven World Trade Center, which is on a separate ground lease and tax lot.

The city's assessment roll carries the main WTC tax lot with a fair market value of $2.15 billion and unless it changes for the final roll to be released on May 25th, it should technically pay on an actual assessment of $967.5 million, that should translate to a tax of about $102 million. The WTC does not formally protest its taxes through the city's administrative system.

Under the agreement between the Port Authority and New York City, the city is supposed to receive a Payment in Lieu of Taxes (PILOT) of about $4 per rentable foot, or $40 million, less than half of the true tax liability. In reality, the WTC wasn't paying that much. While the Dept. of Finance attempted to re-adjust the payment last Fall to bring it closer to the $40 million, because of a number of not-for-profits based in the World Trade Center, the payment was re-adjusted by the Comptroller's office to $19 million for calendar year 1994. It goes up to about $25 million this year and could be negotiated higher. The formula is based on comparisons to other Downtown buildings and some of the space being warehoused by WTC for asbestos removal goes untaxed. Needless to say, a private owner might not get such a good deal.

Investment brokers were concerned they do not know the buildings' cash-flow or carry costs, nor when leases are due to expire.

According to George T. Rossi, general manager of the WTC, there is about 12 million square feet of office space. Other brokers estimate the Twin Towers themselves at having 4.5 million square feet each, and each floor is nearly an acre of column-free space.

"The basic thing is whether there will be a market, what the market is, and the ramifications of the sale, ' explained Rossi. "And if it were complicated - which it is - what finally happens?"

When the study was being made by Bear Stearns, certain tenants as well as prospects asked for certain lease assurances in the event of a sale. Brokers reported some leases were written not to the Port Authority, in fact, but to holding companies that could transfer the lease in the event of a sale.

A real estate executive who wished to remain anonymous said there are a variety of clauses that allow them to swap taxes from one form to another. They can move tenants and have a great deal of flexibility within the leases.

"A private sector landlord might exercise all those clauses, which would put the existing tenants in great jeopardy unless there was an owner of great integrity," the broker noted.

Rossi said aside from the warehoused space that totals somewhere between 200,000 and 300,000 square feet, the property is 91 percent occupied. Rents range from deals made when the complex opened in 1970 in the low teens to deals done at $55 a square-foot at the height in the market. The average rent, Rossi guesstimated, is around $30 a foot.

The Trade Center gross income is in excess of $320 million he said, while expenses approach $300 million. "We're trying to generate bottom line revenues in the $20 to $2.5 million range," Rossi said. "There's a reason why Bear Stearns said not to sell, and it was a much better market."

One investment broker, who asked not to be named, agreed, "It isn't outside the realm of any political organization to go upside and backward. Why would anybody want to do it now when you did it in '85 and it would have looked like shear brilliance to have sold it then. Buy low, sell high still makes a lot of sense to our investors."

Wayne LaGary, corporate managing director of Julien J. Studley, said leases in the building should be prepared so that tenants know there is a level of continuity and a level of exposure that is capped. "This should be cleaned up before its sold," LaGary said. "They need to manage the expectations of the tenants so they are not exposed to huge increases. And the tenants aren't running out."

Darcy A. Stacom, senior director in the financial services group of Cushman & Wakefield, said if Governor George Pataki is looking to downsize and privatize, this could be a big vehicle to do it. "To that extent, it's going to be going to difficult for any one group to swallow," she said, pointing to the largest of more recent sales that have not topped $200 million. "You're looking at a transaction of five times this," she said. "If a pension fund wanted to buy this they could, but it would be a phenomenal amount of resources. It may be more of a structured deal or securitized deal or a World Trade Center REIT," she suggested, noting the total magnitude of the transaction is so large it would be very difficult to have any groups organized to buy this together. "When we see typical Chinese investors they are comfortable with transactions of $5 to $50 million," she said.

Warren Heller, senior director of Jones Lang Wootton, recalled when the WTC buildings were built in the early 70s they were single-handedly responsible for the collapse of the market because it was too much space coming on all at once. "So many of the original leases were at extremely low rents and for long time periods with extension options," he noted. "If there are below market rents, it will have material impact on the valuation. The Towers are clearly among the best known and most recognizable and distinguished buildings in the world, but for a valuation standpoint we would need more information about the leases."

Recent expansions at the Center include Cantor Fitzgerald, a securities trading firm that took another 40,000 square feet bringing them to 200,000 square feet. Rollins Hudig Hall decided to take another floor and is considering the possibility of yet another that would take them over 200,000 square feet. A French insurance firm recently took 60,000 square feet, which is a floor and a half, and a company that handles a lot of the trading paperwork for the government of Indonesia, Surveyor Indonesia, has taken a full floor. "We're chipping away at the vacancy," Rossi said.

Windows on the World will be operated by those who ironically started the restaurant and then went on to rejuvenate the exclusive Rainbow Room at Rockefeller Center. "The drawings are well on their way and demolition, which will inaugurate the reconstruction, will be in the next month,' said Rossi. "It's a complete demolition and rebuilding. The only thing that stays is the name."

He said people toyed about a new name, "but when push comes to shove, it's a name that has cache around the world."

Turning to the 300,000 square feet of retail concourse, in the 25 months since the February 1993 bombing, they have opened or renovated 25 different stores. The latest two are a Coach store and a Cambridge Men's Shop. The Limited, Limited Express, Structures and the Gap also have new stores. Next week, Warner Bros. will open its second store in New York at the Center and in June comes Sam Goody. "We're turning them over left and right. They are also in serious discussions with Borders Books to do a 35,000 square-foot three-level book store in space in 5 WTC that was a former Chemical Bank space.

The stores are now open on Saturdays and while leases don't require the stores to open on Sunday, Rossi said about a third are open.

Heller said someone might buy it because they have an enormous ego. "You might buy it because Downtown New York is at a low cycle and its a tremendous opportunity to buy quality products with unequal name recognition at a discount. There is tremendous market arbitrage in buying Downtown today," he added.

Andrew Gerringer, senior vice president of Douglas Elliman, predicts the buyer would have to be some kind of institutional player. "It's such a complex situation it probably will take a couple of years to figure out what they are selling," he observed. "It's a property that has to be held for a long time. It's not something you can sell right way and will be interesting to see what happens. It could be a REIT itself, like the Rockefeller Center."

Peter Hauspurg, chairman of Eastern Consolidated Properties, also believes its a good candidate for a securitization. "It certainly will attract enormous attention," he said. "It would be hard for one individual to commit the equity portion, which would be $250 to $400 million. It could be a pension fund, but it would be one large bucket to have a lot of apples in and a lot would shy away. Who knows what the deferred maintenance is?" he wondered. "The bill going forward would be enormous."

James D. Kuhn, chairman of Newmark & Co., said the deal will have to be in excess of a billion dollars. "The first question would be if is it all cash or are they taking something back," he wondered. He also believes a massive securitization could be one way for the Port Authority to obtain some money.

Mark O. Decker, president of the National Association of Real Estate Investment Trusts, said there aren't many single asset REITs. "It wouldn't be the strangest thing we've seen," he said. "While it doesn't fit the perfect mold for a REIT - because part of the appeal of a REIT is the diversity - I wouldn't say we'll never see it, but it will be some time before we see the Brooklyn Bridge or tollbooths owned as a REIT."

Decker said REITs like to acquire office properties at 30 to 60 cents on replacement costs. "Unless there is an incredible cash flow or isn't at 100 percent of cash flow and the REIT can add value and grow it as an asset, it doesn't jump into my mind as a REIT asset. But that office market is fairly fluid and is a buyer's market, so it very well might be a REIT asset. If it's owned by a government entity, it is undermanaged for sure," he added.

The Vista Hotel is owned by the Port Authority and is operated by Hilton International with a lease that one insider said, "doesn't end in our lifetime." There are both incentive clauses and performance guidelines that have to be met, as well, that give the Port Authority the right to terminate the lease.

Rossi said the hotel was renovated and the arrangement re-negotiated with Hilton, making it more favorable and attractive to a third-party buyer. "We've been paving the way to spin off that building," he said.

Brenden Sullivan, a partner with Interbank/Brener, said the Port Authority will retain title to the fee. "There is some integration as far as the systems," he noted. The 820 rooms include 23 suites and the 120 executive level special rooms on the 19th, 20th, and 21st floors. There is also a health club, and meeting space on the second and third floors.

He would not comment on the Hilton agreement.

David Gilbert, a vice president with JP Morgan in the real estate investment banking group who is handling the U.N. Plaza sale on behalf of New York City, said "It's a tremendous time to be in the market for selling hotels. The financing is becoming more readily available and there is also more interest from both domestic and international investors."

Labels: the Dean Witter building at 5 WTC

ICAP was formed by the merger of Garban plc and Intercapital plc in September 1999 and was previously named Garban-Intercapital plc. Exco plc acquired the wholesale broking operations of IPGL by means of a reverse take-over in October 1998 and changed its name to Intercapital plc. In November 1998, Garban was demerged from United Business Media plc. The Garban-Intercapital merger brought together Garban's traditional strength in government and corporate bonds, interest rate products and money market instruments with Intercapital's strengths in interest rate swaps and options, commodity swaps, illiquid securities and foreign exchange options. Garban-Intercapital plc was changed to ICAP plc in July 2001.

Michael Spencer set up Intercapital in May 1986, initially to concentrate on the new interest rate swaps market. As a specialist financial derivatives broking firm, Intercapital grew from the original four people to over three hundred world-wide, with offices in London, New York, Sydney, Singapore and a joint venture in Tokyo. In October 1998 Intercapital merged with EXCO plc, a listed money broker, and formed Intercapital plc.

In the 1950s, Harlow Meyer & Co was one of several London based brokers specialising in spot and forward foreign exchange transactions between UK banks. Harlow Meyer & Co entered the US market in the 1960s and in 1977 became part of MAI plc. The money broking businesses were expanded further in the US with the acquisition of Mallon & Dorney. In 1982 Garvin GuyButler, which had had a presence in the US since the 1920s was acquired and in 1983 Garban LLC, a leading fixed income broker, was acquired. These operations had significant broking interests in both the UK and the US. There was a merger between MAI plc and United in April 1996 and in 1998 the broking businesses, branded Garban plc, were independently listed on the London Stock Exchange.

Labels: Exco Noonan 460 employees in 61,000-square-feet of space on the 25th and 26th floors of WTC 1

September 2, 1997, New York Times, "Brokerage Leases Office in Jersey City," by David M. Halbfinger,

In a coda to a government-subsidized deal that lured a foreign exchange company, Exco Noonan, to Manhattan from Jersey City, another New York company has taken over the office space that Exco Noonan abandoned in Jersey City.

Spear Leeds & Kellogg, the New York brokerage house, has more than doubled the space occupied by its Troster Singer division at 10 Exchange Place, the sharp-tipped tower on the Jersey City waterfront, with the lease of nearly 50,000 square feet that is being vacated by Exco Noonan. Troster Singer, a market maker on the Nasdaq stock exchange, had occupied only 36,000 square feet in the building, which is owned by the Prudential Insurance Company.

Troster Singer, which was represented by Cushman & Wakefield, has been at 10 Exchange Place for seven years. In 1994, when Spear Leeds, the parent brokerage, threatened to move its 700 workers to Jersey City, New York officials granted it $2.4 million in tax breaks. The company moved to 120 Broadway instead. The tax incentives included $500,000 that was dependent on the company's hiring additional workers in New York.

Exco Noonan, a division of Exco P.L.C., said on Aug. 14 that it would move  its 219 workers to the World Trade Center in return for $6.3 million in incentives from city and state agencies. Exco Noonan, which was represented by Jones Lang Wootton, assigned its lease at 10 Exchange Place to Troster Singer.


Labels: Exco Noonan

September 3, 1997, New York Times, "Bankers Trust Adds Trade Center Office," by David M. Halbfinger,

In an expansion from its 41-story headquarters, Bankers Trust Company is moving about 1,000 workers across Liberty Street to 4 World Trade Center, where it leased 274,000 square feet from the Port Authority of New York and New Jersey, officials said yesterday.

The new space on three floors will house Bankers Trust's operations and technology divisions and will adjoin the bank's headquarters at 130 Liberty Street across an existing pedestrian bridge.

Bankers Trust, represented by the Insignia/Edward S. Gordon Company, will pay an average of $26 a square foot over 20 years, officials said. The move will take two years to complete, as the leases of some current tenants expire.

December 12, 1997, New York Times,  "Trade Center Lands Empire Blue Cross," by John Holusha,

Empire Blue Cross and Blue Shield has signed an agreement with the Port Authority to lease 461,000 square feet on 10 floors on the north tower at the World Trade Center, the agency said yesterday. It said the signing was the largest lease transaction at the Trade Center in 10 years.

The 21-year lease has a value of about $246 million, officials of the Port Authority of New York and New Jersey said, or an average of about $25 a square foot annually.

Negotiations for Empire to move downtown from its current midtown location on Third Avenue near 41st Street have been under way for months. The insurance company sold its building at 622 Third Avenue for $171 million in October [1997] to take advantage of high property values.

The building was bought by Charles S. Cohen of the Cohen Brothers Realty Corporation. Empire will start moving its operations to the Trade Center starting in the fall of next year, after 23 years in midtown.

Empire ended up leasing less space than the 600,000 square feet originally planned because the company expects to move some of its support functions to an as-yet undisclosed location in Queens, officials said. The company will benefit from a five-year abatement of the commercial occupancy tax under the city's downtown incentive program.

Mary Ann Tighe, a broker with the Insignia/Edward S. Gordon Company, represented Empire.

January 2, 1998, WTCA Electronic Newsletter, "Largest WTC Lease of 1997 Announced by WTC New York,"

NEW YORK -- The Port Authority of New York and New Jersey, owners and operators of  WTC New York, announced recently that it had signed the largest WTC lease of 1997 with Aon Risk Services, Inc. of New York, a global brokerage and consulting organization, to take seven full floors of Two World Trade Center.  The transaction is the second largest lease to be executed in Downtown Manhattan in 1997. 

Port Authority Executive Director Robert E. Boyle said, "The World Trade Center has enjoyed a surge in leasing activity this year, executing leases for nearly 1.5 million square feet of space in 1997.  Aon's lease follows major lease signings with Bankers Trust, Dow Jones, Thacher, Proffitt & Woods and Exco Noonan.  Only one large contiguous block of space remains in the entire complex. 

The WTC houses a full spectrum of business and government agencies involved in international commerce, with 435 tenants from 26 countries.

[AON Corporation 219,133s.f. Insurance 92,99,100, according to CNN. Seven full floors would be 315,000s.f.]

Labels: 1997: AON takes 7 full floors in Building 2

January 2, 1998, New York Times, "Oppenheimer to Expand," by David W. Chen,

Oppenheimer & Company has signed a 16-year, $71 million lease to expand its offices by 50 percent at the World Trade Center, the Port Authority of New York and New Jersey has announced.

The deal will give Oppenheimer 181,304 square feet from the 31st to 34th floor of 2 World Trade Center, an increase of 63,454 square feet. The deal also gives Oppenheimer, a mutual fund company, the option to expand an additional 71,000 square feet over 10 years.

Oppenheimer is now on the 33d and 34th floors, as well as part of the 32d.

Mark Jaccom, executive managing director of the midtown Manhattan office of Julien J. Studley Inc., and Greg Collins, Marc Shapses and Pete Capuciati, managing directors with Studley, represented Oppenheimer. For the Port Authority, Cherrie Nanninga, director of real estate, and George Meyer, manager of office leasing, negotiated the deal. DAVID W. CHEN

Labels: Oppenheimer, 181,304 square feet, an increase of 63,454 square feet.

May 31, 1998, New York Times, "At the World Trade Center, Things Are Looking Up," by John Holusha,

THE leases were signed, one after another. Bankers Trust took 274,000 square feet, Aon Risk Services 396,000, Oppenheimer Funds 181,000, Empire Blue Cross and Blue Shield 461,000 and, finally, J&H Marsh & McLennan committed to 361,000 square feet earlier this month.

All the space is at one building complex, the World Trade Center, whose twin 110-story towers and other buildings have 10.5 million square feet of office space and an additional 300,000 square feet of retail space.

As the market for office space in midtown has tightened and rental rates increased, tenants have been looking to downtown as a cheaper alternative. Over the last year, those seeking large blocks of space have been finding them at the trade center, which had many vacancies as a result of the 1993 terrorist bombing and the shrinkage of the financial industry in the early part of the decade.

''In January 1997 we had about an 80 percent occupancy rate,'' said Cherrie Nanninga, director of real estate for the Port Authority of New York and New Jersey, which owns the complex. Twenty percent of 10.5 million square feet of space is 2.1 million, which would be a substantial building by itself.

But as a result of the last year's work, Ms. Nanninga, said the complex is over 90 percent occupied and expects to it reach the 95 percent mark by the end of the year. That, she said, would be about as full as the center is likely to get, since there is almost always someone moving in or out. ''Ninety-seven percent occupancy would be full,'' said Ms. Nanninga, whose name is pronounced NAN-in-gay.

In all, the trade center reached agreements to lease 2.2 million square feet of office space in 1997, or almost a quarter of the 9.6 million square feet leased in the downtown district.

Real estate executives and brokers say the trade center has benefited from both the general resurgence of the downtown office market -- which was so depressed just a few years ago that the city offered a financial incentive program to lure prospective tenants -- and the Port Authority's newfound willingness to be more flexible than in the past.

Mary Ann Tighe, an executive managing director of Insignia/ESG, who helped broker many of the recent deals at the center, said Port Authority officials had become less bureaucratic and more entrepreneurial in recent years. ''Now they are willing to give us things that could not have been discussed in the past,'' she said.

She said the deal with Empire Blue Cross and Blue Shield was an example of that new thinking. ''Empire always had a subsidized cafeteria for its employees, which is very expensive,'' she said. ''You have the cost of the real estate, plus the manpower and the subsidy and the economics were not working within the confines of the Port's standard proposal for leasing the space..''

To get around the problem, Port Authority officials agreed to expand the cafeteria it already had in the complex for its own employees to accommodate those from Empire. ''That is showing immense flexibility for a government agency,'' Ms. Tighe said. ''They were going to renovate it anyway, so adding the capacity was not that big a deal."

Bradley Gerla, a downtown specialist for Jones Lang Wootton, agreed that there was a new attitude at the Port, as the authority is usually called. ''They have streamlined the entire process,'' he said. ''I'm doing a deal for 10,000 square feet that would have been impossible five or six years ago. By the time they got finished negotiating terms, the tenant would have signed someplace else.''

THE cafeteria expansion is just a small part of the renovations going on at the trade center, where all 240 elevators and 70 escalators will be modernized with new controls for better service and shorter waiting times. The Port Authority has already spent $325 million on the 25-year-old center and expects to spend $400 million more before the upgrade is finished.

The improvements include added communications capacity and increased electrical capacity to power the personal computers and fax machines that were laboratory projects when the trade center was designed.

Mindful that the bombing knocked out power to the buildings, redundant sources of power have been added, including a cable through the PATH tube to New Jersey in the building in case the power flow in New York somehow fails.

Security overall has been tightened, with guards checking employee passes at the elevators. There is still underground parking, but it is available only to tenants who have an electronic card to open the garage door.

Port officials have been upgrading the 300,000 square feet of retail space in the center, to make it more of a destination for shoppers, not just a service for tenants. A long-closed Alexander's is being converted into a Marche, a European-style market/restaurant; a Warner Brothers Studio Store has been installed in the underground plaza that unites the complex, and a Banana Republic store is going into a space vacated after to the merger of Chase and Chemical banks.

The center is a natural retail destination, Ms. Nanninga said. ''We have 1.8 million visitors to our observation deck a year,'' she said. In addition, largely because of the conversion of nearby downtown office buildings to residences, there are 20,000 people who now live in lower Manhattan who add to the retail base.

Some brokers say the aggressive leasing campaign and renovation of the center are part of an effort to prepare for sale to a private investor, possibly a real estate investment trust. REIT's typically prefer to buy fully leased properties, so their income is predictable.

The Port Authority has been studying the possibility of a sale, but officials say no decision has been made. ''The Port Authority has been doing all this work in leasing and retail to enhance the value of the center,'' said James S. Meiskin, the president of Plymouth Partners, a tenant's broker. ''They used to be 9 to 5 people, but now they are pushing through things they have never done before. I believe they will test the market at some point, and a REIT like Vornado or Mack-Cali would be logical candidates to buy.''

Downtown locations are an alternative for companies unwilling to pay the higher rents of midtown, real estate executives say. ''For a B building in midtown you are talking rents in the mid $30's'' a square foot annually, said Barry Gosin, chief executive of Newmark & Company Real Estate. ''Downtown, it is more like the mid to upper 20's.''

He said the residential conversion program had helped make downtown a more attractive location than in the early 1990's, when the streets were all but deserted on weekends and after business hours. ''There are 3,000 to 4,000 residential units and a few new restaurants,'' he said. ''There is a need for more, but the fact is there are people on the street.''

As a result of the demand that is shifting from midtown, the vacancy rate in the downtown area has dropped sharply. According to John V. Wheeler, a senior director of Cushman & Wakefield, the overall vacancy rate is 12 percent, with Class A space in single digits at 8 percent. The overall vacancy rate compares to 20.2 percent in 1995.

But Michael Cohen, the president of Williams Real Estate, said that a word of caution was in order when thinking about the trade center and the downtown office market. ''A lot of what we are seeing is growth in financial services,'' he said. ''The firms are adding salesmen and staff as the Dow rises. That is very ephemeral absorption, because Wall Street sheds staff and space when the tide turns.''

But for now investors appear to believe the good times will last, because they are paying prices unheard of less than a year ago, according to Howard Michael, chairman of the Carlton Group, a real estate investment banking firm.

''The guys who were paying $50 a foot to buy buildings six to nine months ago are paying $110 to $120 a foot now,'' he said. ''Downtown is still the cheapest real estate in Manhattan, and it's the best opportunity for further growth.''

Photo: In January 1997, says Cherrie Nanninga, real estate director for the Port Authority of New York and New Jersey, the World Trade Center was 80 percent occupied. It now has more than 90 percent occupancy, she says, adding that she expects 95 percent by year's end. That, she says, is about as full as it is likely to get since there is always an ebb an flow of tenants. (Jack Manning/The New York Times)

Labels: Bankers Trust took 274, 000 square feet, Aon Risk Services 396,000, Oppenheimer Funds 181, Empire Blue Cross and Blue Shield 461,000 and, finally, J&H Marsh & McLennan 361,000

July 20, 1998, Brown and Wood Press Release, "Port Authority Signs Major World Trade Center Lease -- Prestigious Law Firm Expands Space, as Trade Center Leasing Soars,"

Brown and Wood, NEWS World Trade Center, 99-98: FOR IMMEDIATE RELEASE, July 20, 1998

(Editors: Please note release date.) In one of the largest World Trade Center lease expansions of the year, Brown & Wood LLP today signed a 15-year lease renewal and expansion for five floors at One World Trade Center. The agreement was announced by Port Authority Executive Director Robert E. Boyle.

“We take great pleasure in continuing our excellent relationship with this illustrious law firm,” said Mr. Boyle. “We are delighted that they will continue to enjoy all the advantages of our landmark address, including state-of-the-art technology, unparalleled on-site services and excellent transportation access. This is the latest in a series of major lease signings that have brought our occupancy rate at the World Trade Center to more than 90 percent.”

Mr. Boyle said Brown & Wood signed a lease for approximately 223,100 square feet of space in One World Trade Center, an increase of approximately 57,600 square feet. The firm will occupy the entire 54th floor and the 56th through 59th floors.

Brown & Wood LLP is an international law firm of over 300 attorneys practicing in eight U.S. and international offices.

Acting as agent on behalf of Brown & Wood were LaSalle Partners Corporate & Financial Services, Inc., represented by Scott Gambler, Executive Vice President, and Peter C. Roberts, Managing Director. Acting on behalf of The Port Authority of New York and New Jersey were George Meyer, Manager of Office Leasing, and Cherrie Nanninga, Director of Real Estate.

Mr. Boyle said, “We have executed leases for 1.2 million square feet of space so far in 1998, and we are on course to match 1997’s record pace of leasing. Brown and Wood’s lease is one of our largest expansions this year, following the lease renewal and expansion of Keefe, Bruyette & Woods last month.

Lee S. Saltzman, Partner of Brown & Wood, said, “By signing this lease agreement today, which extends our tenancy at One World Trade Center through the year 2012, Brown & Wood confirms its commitment to New York and looks forward to continuing our good relationship with The Port Authority of New York and New Jersey.”

Founded in New York in 1914, Brown & Wood has since become an acknowledged leader in providing legal services to participants in the world’s financial markets. The firm is engaged in a diverse and sophisticated practice with an emphasis on structuring complex financial transactions providing a broad variety of legal services, primarily to financial institutions and other business interests.

The World Trade Center houses a full spectrum of businesses and government agencies involved in international commerce, with 435 tenants from 26 countries. The 16-acre, seven-building complex, with approximately 12 million square feet of rentable office space and 70 stores and restaurants, has a daily population of 40,000 workers and more than 100,000 visitors and tourists.

WSJ says 1-18-02, 600 employees "One employee is confirmed dead. The company relocated to the firm's midtown office located at 875 Third Avenue."

CNN says

Brown & Wood, L.L.P. 223,100 Law Firms 54, 56, 57, 58, 59 [375 s.f. per employee]

TenantWise says

9/03: Sidley Austin Brown & Wood moved to 338,000 s.f. at 787 Seventh Avenue in July 2002.

WSJ says June 14, 2002

Initially relocated to 875 Third Ave. Will move to a 338,000 square feet space at 787 Seventh Ave., also known as the Equitable Tower, by next summer. [2003] Firm, expanded by a recent merger, will move 1,000 employees to that location.

September 16, 2001, New York Times,  "Up From the Ashes, One Firm Rebuilds," by John Schwartz,

AS smoke filled the skies above Manhattan on Tuesday, with most of the nation still paralyzed by the horror of watching the World Trade Center's twin towers collapse, almost seven miles north in a Midtown office building, Alan S. Weil was calling his landlord.

Like millions of other people, Mr. Weil had been stunned by the images on television -- more than most, however, since along with the Midtown offices, his law firm occupied five floors of 1 World Trade Center. As many as 600 of his friends and colleagues at the law firm, Sidley Austin Brown & Wood, might have been lost in the catastrophe.

Once Mr. Weil received word that most of the staff had gotten out safely, his relief was tainted by a chilling thought: if his 135-year-old firm was going to recover, he would have to act quickly.

Within three hours of the twin towers' collapse, that call to the landlord had secured leases on four additional floors in the Midtown building for his dispossessed lawyers and staff. By the end of that day, others within the firm had arranged for the immediate delivery of 800 desks, 300 computers and cell phones by the hundreds; contractors were hired to string cables to expand the firm's computer network.

''It's just amazing what you can get in New York overnight,'' said Thomas R. Smith Jr., vice chairman of the firm's management committee and head of what was its World Trade Center offices.

The normal rules of business engagement -- deliberate negotiation, adversarial wrangling and jockeying for advantage -- were swept away. The infamously in-your-face New York attitude was nowhere to be found. Instead, the firm encountered generosity in its business partners and even in its competitors -- a cooperative, indomitable spirit that stands in stark contrast to the inhumane brutality of the attack.

In the face of chaos, the preternatural coolness of the law firm's employees -- many of whom walked miles from the rubble of the World Trade Center to the law firm's offices at Third Avenue and 52nd Street to report for duty -- helps to explain why executives of Sidley Austin, the fourth-largest law firm in the nation, expect the New York branch to be back in business tomorrow with desks for almost every employee.

But many of the people who made it all possible first had to get through a hellish ordeal.

A Routine Day Stopped Short

John Connelly had reached his office on the 57th floor of 1 World Trade Center a little before 8 a.m. He had started the day as usual, admiring the view of the skyline from a ferry to Manhattan -- part of a daily commute that started with a 6:30 train from his home in Bedminster, N.J.

Mr. Connelly, 35, the director of administration at the firm, had already sent out e-mail messages that he had composed on his way to work and was sitting down to a meeting with Robert Hammond, a telecommunications consultant. The two men were discussing their firm's next big project: tying up loose ends from the May 2001 merger that combined Sidley & Austin of Chicago and Brown & Wood, which had its headquarters at the World Trade Center.

The combined firm had planned to consolidate its New York offices by leasing two more floors in the World Trade Center, with a planned move-in date in the middle of next year. Mr. Connelly and Mr. Hammond were planning one of the thousands of details in a merger: combining the firms' telephone systems.

Suddenly there was ''a massive explosion,'' Mr. Connelly said, and the building ''just shuddered.''

''Bob,'' Mr. Connelly recalled saying, ''that was a bomb.''

The two men moved away from the windows and went to a central corridor; many of the employees had gathered there, in front of the company's cafeteria. As people stood around, wondering what to do, Mr. Connelly told them to wait a moment while he checked with the security office at the base of the building to find out whether they should evacuate.

But as he reached his office, the phone rang. It was a friend, Anton J. Appel, who worked across the street and had a view of the tower.

''Thank God you're all right,'' Mr. Connelly remembered Mr. Appel saying. ''Dude, I just saw a plane fly right into your building.''

Two floors up, Dennis J. O'Donovan, 42, the no-nonsense head of computer networks and other technology at the firm, had been sitting in his office when he felt the impact. Turning to the window, he saw the fireball from the crash above; debris hailed down and paper fluttered, obscuring his view of the Statue of Liberty.

Mr. O'Donovan stepped out into the corridor where co-workers were gathering, and told them to head downstairs right away. As people moved toward the stairwell, he saw Alexis Goldman, frozen in place.

From the day that Ms. Goldman was hired last June, Mr. O'Donovan would embarrass himself by mangling her name, calling her Goldberg or Bergman, ''all around the right name but never right.'' He had cured himself one day by writing her name 10 times on his whiteboard.

And now she was standing there, rigid, saying: ''I don't know what to do. I don't know where to go.''

He put his arm around her shoulders. ''Alexis,'' he said. ''It's O.K. Come on -- let's go.''

An Escape Through Fumes

After hearing from his friend, Mr. Connelly found that he was unable to reach the World Trade Center security desk. Somebody turned on a television.

He recalled making quick calls to his wife and mother, leaving messages on their answering machines saying that he was not hurt. And on TV, he and others in the room saw the explosion in the second tower.

As he rushed out of his office, smoke and dust were already heavy in the air; the smell of jet fuel was overpowering as it oozed down the walls of the freight elevator. He told his co-workers to start heading down the stairs. ''Don't go back to your desks,'' he said. ''Just go.''

He did not join his colleagues. Instead, he asked a few people -- Rich Huber, a construction superintendent who had just completed a three-year project to refurbish the offices, and two maintenance workers, Kahlil Thomas and Sidney Rembert -- to go from floor to floor to make sure that everyone had cleared out.

Mr. Connelly himself made the rounds of the 57th floor, methodically checking offices as the tower above him burned out of control. He recalled assessing the damage and beginning to create a checklist in his mind about what would be required to fix the smoke damage and get the office running again once the fires were put out. ''At no time did I think that the tower was going to collapse,'' he said.

The men reconvened in Mr. Connelly's office and started down the stairs. But when they reached the 49th floor, they ran into a clot of misery as burned office workers jammed the passage.

''I am seeing burn victims whose skin is hanging off,'' Mr. Connelly said, fighting back sobs. ''I'm seeing women whose hair is singed and burned off their heads,'' but only on the side that had been exposed to the initial blast. To him, they looked like the wind-warped trees of Aruba. The smoke was already so thick that people were having trouble breathing.

Mr. Connelly, Mr. Rembert and Kary Wippons, a worker from the company cafeteria, decided to hike back up to the 56th floor to gather emergency supplies. They went to a storage closet and filled canvas bags with beige golf towels bearing the firm's logo that had been handed out during the summer at an invitational golf tournament; they would hand them out as masks; Mr. Wippons took as much water from the cafeteria as he could carry. Mr. Connelly also pulled out a bulky first aid kit, 3 feet long.

Still oblivious to the danger of the building's collapse, Mr. Connelly turned off the stoves in the cafeteria stove, removing omelet pans from the burners. ''I put them in the sink so there wouldn't be a fire,'' he said.

Mr. Connelly then checked his voice mail, and tried again to reach his wife or parents. He also tried to call his firm's Midtown office, but by then, it was impossible to get an outside line.

Before picking up the supplies, he took off his blue blazer, put it on a hanger and hung it up behind his office door.

Heading back down the stairs, they made it al the way to the lobby and scrambled over chunks of collapsed ceiling, past the horrors of the mangled and burned bodies outside the front door.

A few minutes later, the tower collapsed.

Trying to Keep the Firm Alive

Back at the Midtown office, a call came from Mr. Connelly. He said that all the firm's employees had left the office and that they seemed to have left the building safely. A wave of relief rippled through the crowd. Mr. Weil went into his office and picked up his telephone. ''The first call I made was to Robert E. Selsam,'' he said.

Mr. Selsam, a senior executive at Boston Properties, managed the building at 875 Third Avenue, where Mr. Weil and 100 other lawyers from Sidley Austin worked. ''His first question was whether our people were O.K.,'' Mr. Weil recalled. Then Mr. Weil, the partner in charge of the firm's real estate practice, asked if there was any space in the same building. Mr. Selsam immediately offered two vacant floors. ''You can have them -- they're yours,'' he said.

Cost never came up; this wasn't the time. He also said he would try to arrange for as many as two more vacant floors that were about to be occupied by Hogan & Hartson, another law firm. By Friday, Mr. Selsam and Mr. Weil had received permission from Hogan & Hartson, of Washington, to take over the space.

Once the new space was secured, aides began making arrangements to fill it, placing orders and finding contractors.

About 1:30 p.m., Mr. O'Donovan walked through the door, his hand wrapped in a bloody napkin. He had fallen outside the World Trade Center, slicing his hand on broken glass. Wrapping it in a wet napkin that he had been using to help him breathe, he continued to walk uptown.

He stopped once to change the napkin, and again to buy a cell phone at a RadioShack store. Although the phone was fully charged, it was next to useless in the telecommunications chaos after the towers' collapse.

After more than two hours, he reached the Chrysler Building, where his wife, Karen, works, but a guard told him that the building had been evacuated. He reached his own firm by phone and asked a receptionist to call his wife. And then he made his way 10 more blocks to his office at 52nd Street.

''I met several of my staff there and hugged every one of them,'' Mr. O'Donovan said.

He got a list of the employees who had worked at the World Trade Center and had members of the staff begin the arduous process of making sure that everyone had indeed gotten out safely: although the offices had been evacuated, they could not account for more than 100 people in the initial hours after the towers' collapse. (Over the following days, all but one had been found, though several people were hospitalized.)

Mr. O'Donovan called his parents on Long Island and spoke with his 12-year-old son, Evan. And he finally found his wife at the office of a former employer; she told him that she was going to try to get on a train back to their home.

Some of his employees, he said, ''were a little overcome by the situation and I had to let them leave.'' But Mr. O'Donovan and others worked long into the night, getting ready to move the hundreds of lawyers and support staff into the new floors.

He visited the new office space and began to round up the equipment -- including a shipment of computers that had been ordered for the World Trade Center that he diverted to Midtown.

Mr. O'Donovan also arranged for the retrieval of the firm's backup tapes -- the nightly computer record of everything on his firm's electronic network. With the tapes stored in New Jersey by two independent firms, he had to find a way to send those tapes to Chicago, the hub of Sidley Austin's network, so that the computer records could be restored to the state they were in at the end of business on Monday.

It was another challenge: with no planes flying, the tapes would have to be driven to Chicago. No problem, the companies said, offering to have their own employees drive them.

Mr. O'Donovan said he could not believe it. In disaster recovery seminars he had attended, he recalled that ''they always prepare you for the worst -- people not being available, people not being cooperative; the opposite has happened.''

By the time he left the building at 1:30 a.m. Wednesday, most of the plans for the new office space had been set in motion, and fewer than 100 employees were still unaccounted for. The law firm had secured a few scarce hotel rooms, with stranded employees doubling and tripling up; Mr. O'Donovan watched television for a few minutes to finally get a look at the images everyone else had already seen, and touched his head to a pillow at 2 a.m. ''It felt good,'' he said. ''It definitely felt good.''

A New Friend and a Big Hug

Mr. Connelly had decided not to head for the Midtown office; he only wanted to see his wife, Donna, who was pregnant with their first child. After lugging the first aid kit all the way down the Trade Center stairs, he handed it to rescue workers on the ground.

And after saying goodbye to two friends, he made his way home, walking north to Chelsea Piers with Rohit Nagpal, another New Jersey-bound Sidley employee he had run into along the way. ''There were thousands of people walking up the West Side Highway,'' he said. ''It looked like an army in retreat.''

He saw a man walking with a gym bag and asked, ''You wouldn't happen to have extra shoes in there, would you?'' Mr. Connelly had lost his left shoe while sprinting away from the collapsing tower. The man, David Weisberger, a Salomon Smith Barney executive, did have shoes, and they fit Mr. Connelly.

Mr. Weisberger was fleeing with two other Salomon colleagues. By the time the group of five had crossed the Hudson River aboard a boat, the Spirit of New York, they had become foxhole buddies, bonded by strife.

Mr. Weisberger's wife met the men on the New Jersey side and gave Mr. Connelly a ride to his car. The two men promised to get together again, and then Mr. Connelly drove home.

Mr. Connelly said he walked through the door and gave his wife ''the biggest hug of my life.''

That night, he participated in an 11 o'clock conference call with executives of the firm. ''That was a bit odd,'' Mr. Connelly said. He knew then that he was not ready to return to work on Wednesday. Only on that day, he said, as the flood of phone calls from family and friends overwhelmed him, did he realize how close he had come to never seeing his wife again, to never knowing his child.

What's Recovered and Lost

The firm's ability to bounce back so quickly from disaster has been startling, said Charles W. Douglas, the chairman of the management committee. ''I'm tremendously gratified by the number of our competitors who have called and offered to help,'' he said. He added that he was amazed that the entire computer network could be fully restored, with virtually every electronic document and e-mail message intact. ''Here is the modern miracle of technology,'' he said.

But the firm's struggles are not over. Because Sidley Austin Brown & Wood had planned to move its entire operation to the World Trade Center, it had given up its Midtown lease before the blast. Now the firm has to find an entirely new location by the middle of next year.

Even so, the speed with which the firm has gotten back on its feet belies the terrible cost in dollars, struggle and emotional strain, Mr. Douglas added. ''We're only able to be in this position because of herculean efforts'' by employees, he said. ''There will be continuing costs as we go forward, all of which, I can assure you, we are carefully keeping track of.''

The company, of course, is heavily insured -- not only for the lost furnishings and equipment, but also for its art collection, which has been valued at $1.5 million.

Many things, nonetheless, are irreplaceable. Personal belongings in every office are gone; Mr. Smith, the head of the firm's New York office, said he would especially miss the painting of a tiger he bought in a SoHo gallery a decade ago, and a favorite photograph of Fenway Park in Boston. None of that, however -- not even the continued success of the firm -- is as important as the relief at knowing that so many of his colleagues survived. ''Being able to keep the business going is great, but it's the people that count,'' he said.

Everyone can point to heroic efforts over the past few days, but Mr. Weil, the real estate lawyer, singled out Mr. Connelly, who took such enormous risks to ensure that his co-workers escaped.

''In my book, certainly John Connelly gets a medal,'' he said.

Remembering Other Heroes

Mr. Connelly thought others deserved the praise. He recalled his second trip down the World Trade Center stairs, when he had to stand aside while dozens of firefighters streamed past, heading up the stairs toward danger, not away from it.

The men had already climbed more than 40 floors and looked exhausted, lugging equipment and sweating in their masks. As they passed and saw water bottles, the firefighters pulled aside their masks for a moment so they could pour water into their mouths and on their faces. Then they trudged on.

One firefighter asked Mr. Connelly to take down his phone number and to call his wife when he got out to tell her he was all right. Mr. Connelly entered the number into his cell phone.

During the interview. Mr. Connelly pulled out his cell phone to look for the firefighter's number.

''If he survived, I want to call him and thank him,'' he said. ''If he died, I want to call his wife and tell her he was a hero for going up those stairs.''

He picked up the telephone to search for the firefighter's number. But it was gone.

Photos: Managers of Sidley Austin Brown & Wood look at new offices for the firm.; Sidley Austin hopes to have its lawyers working tomorrow in this Midtown Manhattan office space. (Photographs by Barbara Alper for The New York Times)(pg. 1); John and Donna Connelly with their dog, Luke, and the shoe that survived Mr. Connelly's escape on Tuesday. (Richard L. Harbus for The New York Times); Law firm partners, from left, Michael T. Kohler, Alan S. Weil, and Michael L. Fitzgerald, in the new space.; Workers quickly prepared Midtown Manhattan offices for Sidley Austin Brown & Wood, a firm that had five floors at 1 World Trade Center. (Photographs by Barbara Alper for The New York Times)(pg. 14) Chart: ''Sidley Austin Brown & Wood'' CORE BUSINESS Litigation, corporate law, asset-backed securities law OFFICES Beijing, Chicago, Dallas, Hong Kong, London, Los Angeles, New York, San Francisco, Seattle, Shanghai, Singapore, Tokyo, Washington AT THE HELM Thomas A. Cole, chairman of the executive committee Charles W. Douglas, chairman of the management committee Thomas R. Smith Jr. vice chairman of the management committee EMPLOYEES 3,300 worldwide, including 300 lawyers and 300 support workers who had occupied five floors in the north tower of the World Trade Center HISTORY Sidley & Austin was founded in 1866 in Chicago. It grew to counsel corporations on litigation, regulatory and banking law. Brown & Wood was founded in 1914 in New York. Its focus has been to counsel on debt and equity issues. The firms merged in May and were consolidating their New York operations at 1 World Trade Center. (pg. 14)

September 12, 2005, Newsday, "WTC Law Firm Thrives on Long Island," [Ohrenstein & Brown]

Some 20 employees of the law firm Ohrenstein & Brown had made it into work on the 85th floor of 1 World Trade Center that ill-fated morning of Sept. 11, 2001.

After terrorists slammed American Airlines Flight 11 into the North Tower nine floors above at 8:46 a.m., everyone scrambled into the offices of managing partner Geoffrey Heineman to decide what to do.

Heineman still remembers the acrid smell of smoke that burned his throat as he gathered his staff and managed to lead everyone down to the lobby. "You stood for periods of time in the stairwell," he said, noting that it took an hour to get down and make it out onto Church Street just minutes before 2 World Trade Center collapsed.

Founding partner Michael D. Brown recalls being on the FDR Drive in Manhattan, watching in disbelief as the fires burned.

Amid all the chaos, Brown and others regrouped at the Manhattan apartment of the firm's other founding partner, Fred Ohrenstein, a former State Senate minority leader. By the end of the day, all but two of the firm's employees were accounted for.

During the next months, co-workers grappled with not only with reconstructing the practice, but also with the loss of those two colleagues, Ann.Marie Riccoboni and Valerie Murray, who are believed to have died on the way in to work.

The recovery from the attacks wasn't easy, but the partners also had to address how the firm would continue to operate and serve its clients. Today, four years later, Ohrenstein & Brown, which specializes in insurance law, has survived and thrived by expanding on Long Island.

Before the Sept. 11 attacks, the firm had a small, nine-employee branch office in Garden City barely the size of two conference rooms. But it had telephones and working computers, so it was a good base. Now, Garden City is home to about 35 to 40 people, and is growing. In fact, Great Neck resident Brown and Garden City resident Heineman just last month moved their main offices to Long Island where they intend to spend more time, while keeping space in Manhattan.

"We said, 'What do we want to do and how do we want to do it?'" Brown recalls four years later. "We thought there was a real market out there."

The firm has not abandoned the Manhattan market at all. In fact, much of the expansion on Long Island has been from new clients as well as New York City-based customers who have cases or issues on Long Island.

The law firm was among many tenants that left downtown Manhattan. In fact, according to a survey by the real-estate consulting firm TenantWise, about 77 percent of major tenants in destroyed buildings moved out of downtown. TenantWise chief executive M. Myers Mermel noted the downtown office market has recovered somewhat since the terrorist attacks but still is weak.

Certainly, there have been some high-profile cases of World Trade Center tenants returning to downtown, such as the law firm of Thacher, Proffitt & Wood, which is now in Two World Financial Center. But by and large, most tenants that have survived the attacks have gone to Midtown.

Getting Ohrenstein & Brown back up to full speed wasn't an easy task. A sympathetic client, insurance broker Hub International, provided them space in the Chanin Building near Grand Central Terminal. That lease ended in October 2001.

Brown estimates that the firm's employees in some form or another were moved seven times over nine months, improvising by using cell phones, rigging network connections.

"Through 2002, there wasn't a single week that we didn't see problems," Brown said. "Our computers were down, our telephones were down -- or both."

Eventually, the firm signed a lease for One Penn Plaza in December 2001 and moved into the 46th floor in March, 2002.

Luckily, the legal documents the firm created were backed up, but paperwork from opponents was harder to replace.

"You find how resilient you are and how resilient the people in this office are," Brown said. "You also appreciate the patience and resilience of your clients."

The firm, which does everything from employment-discrimination law to advising businesses on what types of insurance to buy, also has rejected the idea of selling or merging with another firm.

"We do that deliberately because we like to think we've created our own culture," Brown said. "That is one of the reasons our firm was able to cope with 9/11."

Now, the firm is in a 10-year lease at 1010 Franklin Ave., just next door to its once-satellite office. Back when the firm moved to 1 World Trade Center in 1998, Brown remembers that he thought the rent was a great deal. But now, its expanding Garden City operations comes out to less than half the price of its Penn Plaza space. And with a Long Island Rail Road stop three blocks away, it's an easy commute between the two locations.

The firm didn't consider moving back downtown because it would have been too traumatic for employees. As he gazes out of the Penn Plaza windows looking downtown, Brown still replays in his mind the image of the smoke rising from the Twin Towers.

But Brown, who once worked there in 1973 when he was with the state special prosecutor's office, said he believes the new buildings going up will rent out. "I have no doubt that those offices will be tenanted," he said.

Brown recalls nostalgically some of the personal touches of life in lower Manhattan, including the craft fairs and the orchid shows held in the walkway over West Street.

As for that day four years ago, Brown noted, "I don't think you ever get over it. You put it into perspective."

Labels: Ohrenstein & Brown moves into WTC in 1998

March 10, 1999, New York Times, "Financial Software Maker Pays '97 Price for Trade Center Space," by John Holusha,

Eighteen years ago, Rob Patterson founded his company, Baseline Financial Services, in the basement of his home in Madison, N.J.

His space needs have grown considerably since then. He recently signed a 15-year lease for 60,000 square feet on the 77th and 78th floors of Two World Trade Center.

Although rental rates for Class A space in downtown Manhattan have surged in recent quarters as vacancy rates have declined, Mr. Patterson was able to lock in a lower rate by assuming the lease of another company that was negotiated two years ago.

''In late 1997, the market for Class A space downtown was in the low to mid 20's,'' said David Rosenbloom, a director of Cushman & Wakefield, the real estate services company, referring to the annual cost in dollars of a square foot of space. ''Today that same space is in the high 30's to low 40's.''

But a previous tenant in the building, Georgeson & Company, an adviser to companies on proxy issues, had sold some of its operations and is negotiating to relocate to smaller space in the Trade Center. The larger space, which was partly built but not ready to move into, was available at 1997 rates.

''This lease transaction allows Baseline to operate in a Class A property at below market rates,'' because of the existing lease, Mr. Rosenbloom said. Class A properties are in the newest and most technically advanced buildings.

With an assumed lease, the tenant pays the rent directly to the landlord, rather than to the previous tenant, as would be the case with a sublease. Nevertheless, the previous tenant remains on the lease and is ultimately responsible for the rent payments.

Trade Center managers had an incentive to allow Baseline to assume the previous lease because of the gains it had in the interior construction of the Georgeson space -- an investment it could have lost if a new tenant demanded a different layout, Mr. Rosenbloom said.

In addition to the favorable terms, Mr. Patterson said, he was attracted to the Trade Center towers because of their large, 45,000-square-foot floors. The company will have the entire 77th floor, with the rest on the 78th floor. The two floors are connected by an escalator. 

[428 s.f. per employee]

Mr. Patterson said most of the company's 140 employees would be on the 77th floor, with some executive offices, meeting rooms and a reception area on the 78th.

Baseline is a software development company that produces products that help financial portfolio managers in making investment decisions. Its clients include more than 700 major banks and other financial institutions, 180 of which were added last year.

The company's revenues have grown 35 percent annually in the last five years, leading to the demand for space. Baseline is a subsidiary of the Primark Corporation, a publicly traded company, specializing in information technology.

Baseline's space requirements are driven by considerations similar to those of many other information technology and new media companies that have fueled the revival of commercial property in lower Manhattan.

''Software is produced by teams,'' Mr. Patterson said, ''so it is important that people can easily meet face to face.'' Putting all the people actively involved in developing the products on one floor is expected to increase this interaction.

The company hopes to move into the Trade Center in August, leaving its current location at 61 Broadway, where it occupies 32,000 square feet. Staying at that location, where floors are 17,000 square feet, would have meant spreading the company over many floors, interfering with the needed teamwork.

As it was, the company was fortunate to stay put for as long as it did. When it first moved to 61 Broadway, it started with 2,700 square feet of space. ''We got lucky and some people moved out, so we are able to take their space,'' Mr. Patterson said.

Should the company continue to grow, it may be able to stay at the Trade Center for a while, as well. Mr. Rosenbloom said that the previous tenant had negotiated the right to occupy some expansion space, should it become vacant, and that that right was assumed by Baseline.

The company will be able to move more quickly than might otherwise be possible because much of the interior construction was under way.

''The 77th floor is about half finished, but the 78th floor is still raw space,'' Mr. Rosenbloom said. He said the layout of the 77th floor was largely acceptable to the new tenant and would proceed. He added that the materials purchased and the construction funds reserved for the 78th floor were included by the landlord as part of Baseline's assumption of the lease and that the company was hiring someone to design the upper-floor offices.

Mr. Patterson said although it might seem glamorous now to be the president of a company that was started in a basement, ''at the time it didn't seem very glamorous.''

''We started 18 years ago, and I guess we were a little ahead of the wave,'' he said. ''Baseline makes products for PC's,'' or personal computers, which did not come into widespread use until the mid-1980's. ''It took about eight years of trial and error to figure out what worked,'' he said.

Labels: Baseline rents 77th, and 78th floor "is still raw space" of Tower 2 in 1999.

June 13, 2001, Business Wire, "Regus Opens New York's World Trade Center Space 45 Percent Leased: Regus Adds 50,000 Square Feet to Network of 400 Centres in 50 Countries,"

Business Editors

PURCHASE, N.Y.--(BUSINESS WIRE)--June 13, 2001

Regus Business Centres (Nasdaq: REGS), the global leader in supplying outsourced officing solutions, launches its new Two World Trade Center location today with 45 percent of its space under contract.

"Interest in this space is very robust," said Jim Howland, CEO Regus Americas. "Everything about this location is unique, especially our lease terms and the ease of entry we provide into this and other world markets. Unlike a conventional lease or sublease, Regus allows companies to determine the exact amount of space they need, only for the time they need it. The strength of this opening tells us we are providing the market with a product it wants."

Regus presence in the World Trade Center affords companies needing individual or multiple offices, whether Fortune 500 corporations or consultancies, the opportunity to locate at one of the world's most prestigious business addresses.

According to Bob Gaudreau, EVP Sales and Corporate Development, "the World Trade Center management leases in half-floor minimums of 25,000 square feet. The Regus opening affords companies needing less square footage access to this prominent location below what it would cost to operate in a much less desirable building."

Cost comparisons provided by Regus illustrate the cost benefit to companies of varying sizes. For example, over the course of a 36 month lease Regus can save a company employing 10 people in 2,500 square feet  approximately $240,000.

Regus' New York portfolio includes two business centres at 245 Park Avenue. That property is 85 percent leased.

Located in 50 countries with nearly 400 business centres, Regus is the world leader in supplying outsourced offficing solutions. With 70,000 workstations, Regus' global breadth allows clients to match their workforce to exactly the workspace they need, when and where they need it, for as long as they need it. This approach empowers companies to remain agile in a highly unpredictable business climate. Regus' full menu of business support services includes video-conferencing, desktop publishing, administrative support and concierge services.

Labels: Regnus rents the 93rd floor of tower 2 on June 13, 2001

September 12, 2001, eWeek, "Tragedy Strikes Interactive Businesses In WTC,"

Technology companies with offices in the World Trade Center are nervously trying to account for hundreds of employees who have been missing since the landmark towers collapsed yesterday morning.

According to published lists and telephone directories, there were about 15 computer or telecom-related companies with offices in the World Trade Center. The list includes prominent names like AT&T, Global Crossing, Sun Microsystems and Verizon Communications. Among a number of small technology companies that had offices in the devastated facility are, FileTek and Persistence Software.

Officials at the San Mateo, Calif., headquarters of Persistence, which makes caching software, told Interactive Week that all of the companys employees are well, but would not say how many worked in the center. FileTek, a data management software provider, had less than 10 employees in the World Trade Center, and according to company spokesman, Peter Abzug, all were out of the building at the time of the collapse.

The situation is far different for Verizon, which had some 400 people working in the World Trade Center. Yesterday afternoon, company officials were having difficulty finding their employees, and their job was made harder, said a spokesman, because many of the transportation routes into and out of Manhattan had been closed.

Sun apparently occupied the entirety of floors 25 and 26 of the South Tower. A Sun spokesperson said officials are still trying to determine exactly how many of the companys employees were in the building and how many of them got out before it collapsed.

There's also a great deal of uncertainty at Cantor Telecom, a company headquartered in North Carolina that provisions and trades bandwidth. Formerly known as Chapel Hill Broadband, the company was acquired a few months ago by Cantor Fitzgerald Securities Investments, which occupied floors 101 through 105 of the North Tower of the World Trade Center.

"Theres no news," says Brent Wilkins, managing director of Cantor Telecom. "The call-in number, you can't get through. Its a tragedy. We need all the prayers we can get."

Labels: Verizon had 400 employees

September 12, 2001, eWeek, "Quirks of Fate: One Mans Escape from WTC,"

The moment Roy Bell hit the elevator button on the 78th floor of One World Trade Center to go to the 102nd floor, the first plane hit.

Little did he know he was about to cheat death several times in the next 90 hair-raising minutes.

Sheets of fire shooting out of the elevator shaft enveloped him and a woman waiting for the elevator doors to open. Suddenly, the elevator dropped two feet and jammed.

Had he punched the elevator button just seconds earlier, the elevator would have carried him and the woman up to an almost certain death.

"I would have been incinerated. No one got out above the 82nd floor where the plane hit. I've never seen fire like that," said the senior account executive for Alliance Consulting, whose New York office on the 102nd floor could only be reached be changing elevators in the Sky Lobby on the 78th floor. The Philadelphia-based company's New York office was usually occupied by about 15 people, while its 100 consultants fanned out daily to client sites around the city.

Another irony is that Bell and his boss, who remains unaccounted for, had originally planned to go to the office at 8 a.m., but because they had taken clients to a ballgame at Yankee Stadium the night before (it was called on account of rain at 9 p.m.), they decided on 8:45 a.m.

The torrent of fire raining down on him was just the beginning of his harrowing escape, one that thousands can also tell and, sadly, one that many thousands who went through it cannot.

Bell, 46 years old and from Jersey City, where once he could see the World Trade Center out his apartment window, doesn't recall leaving the elevator lobby. All he remembers is ending up in an office on the 78th floor at the Port Authority of New York and New Jersey, which owned and ran the 16-acre World Trade Center complex of seven buildings.

"I'm running through this fire shooting through the elevator to an office where there was no more fire. A woman was freaking out and crying because I looked like a ghost with my hair and clothes burning. People came over to me and patted me down and whacked me to put out the flames. The skin was falling off my hands," he said. "My right hand got it good."

A fire marshal in the office promised to get Bell out as he called his wife, leaving a message that he was OK and that he loved her.

After 3 or 4 minutes, the woman he had been waiting for the elevator with came into the office severely burned. A man whom he only knew as "Avi" promised to carry the injured woman out of the building. The perilous trek down 78 flights of stairs began about 10 minutes after he left the fiery elevator.

"Avi was just a brave man," Bell said. "So it was me, her and him helping her. It was 9:02. When we hit the 50th floor, nothing was moving because it became single file, with the firemen, who must have lost their lives, coming up."

The firemen took one look at Bells burns and the injured woman and ordered everyone in the line to make way for them. They were on the move again.

"We went into the fast lane past hundreds of people. I hope they got out. I think they got out," Bell said after a long pause. "There was a lot panic. People were shrieking, wailing and screaming."

When they arrived at the lower level at 9:30, Bell and the injured woman were taken to the worst possible place given what would happen 35 minutes later - the buildings basement two floors below ground.

"They said they had stretchers and wheelchairs down there, but I just wanted to get the hell out of the building," he said. "I ran into a building engineer, who told me there was only one safe exit out and that the building wasn't stable."

It didn't take long for Bell to decide to run out of the basement. Once outside he was pulled into an ambulance (Bell believes he was one of the first of the injured to emerge from building). The injured woman was taken out by EMTs; Bell presumes she survived.

He was taken four blocks away to an outdoor staging area, where the ambulance driver was ordered to return to the World Trade Center to rejoin his triage team. Bell jumped out.

"I told him, Don't go to the building. Its not stable. He told me that's where the injured are." Bell said. "His chances were not good."

It was 10 a.m., 5 minutes before 106 floors of the 110-story south tower would topple to the ground and 28 minutes before the one housing Bells office would do the same. As he watched the first one fall, he sprinted north.

"I had a four-block lead on the dust cloud. Then it was two blocks. Then it was a block and half. But I outran it. It never caught me," Bell said with some pride.

He stopped at Canal Street, where he was picked up by another ambulance and taken to St. Vincents Hospital. He said he was the first of the injured in the World Trade Center disaster to be released from that hospital.

Doctors told Bell it'll be two weeks before his burns on his hands and face will heal.

"We fear the worst," said Senior Vice President John Wollman of the Alliance employees still unaccounted for. "We feel sick." He declined to name those missing to protect their families.

Colleague Fran Rabuck, who works in Alliances headquarters, still views Bells amazing story with disbelief. "I cant wait to see him and give him a hug," he said.

Labels: Alliance Consulting,]

September 13, 2001, CoStar Group News, "Brookfield: Buildings Next to WTC are OK,"

Despite media reports to the contrary, property owner claims buildings suffered only minor damage.

Brascan Corp. the Toronto-based parent of Brookfield Properties Corp. sought to dispel Wednesday's media reports that some of its buildings near the World Trade Center in Manhattan had suffered structural damage and were near collapse them selves.

On Tuesday, after reports ran on CNN and other news outlets that One Liberty Plaza, a 54-story office tower located across the street from the stricken World Trade Center complex, was itself crippled and about to collapse, John Zuccotti, deputy chairman of Brookfield Properties, swung into action.

Zucccotti personally called news anchors at the major television networks, including fellow Canadian Peter Jennings at ABC, to deny the reports and reassure viewers that his buildings were fine.

In a follow-up statement issued by Brookfield's parent company, the building owner confirmed that a preliminary technical investigation by independent structural engineers found no structural damage to its buildings. Although each of the buildings will require extensive window and lobby repairs, none of the damage renders the buildings inoperable.

In fact, the company claims, "subject to restoring electrical power to the area and obtaining the necessary clearances from appropriate authorities, the buildings can be occupied and functioning very quickly." The company also stated that it has "adequate insurance to cover any property damage."

After further inspections, Brookfield said on Friday that its One Liberty Plaza building avoided a direct hit from the collapse of the World Trade Center towers. It did, however, sustain damage from wind conditions created by the collapse and from airborne objects striking the glass, according to engineers. One Liberty Plaza is anchored on bedrock and no parts of any subway run underneath the building.

Brookfield said on Friday that its buildings had been inspected by structural engineers from two independent engineering firms, Thornton-Tomasetti Group and Gilasanz Murray Steficek, as well as by engineers from One Liberty Plaza's original general contractor, Turner Construction, structural specialists with the Federal Emergency Management Agency (FEMA) and its own technical and engineering staff.

All the inspections indicate that One Liberty Plaza is structurally safe and that the majority of the damage is cosmetic. Elevators are currently functioning with auxiliary generators and they will be fully operational as soon as the power utilities are restored. No water damage, fires or collapses of any kind have occurred at One Liberty Plaza.

Brookfield said it plans to board-up damaged windows until glass can be fully installed.

Brookfield owns One Liberty Plaza and three of the four towers in the World Financial Center. One Liberty Plaza is a 54-story office tower completed in 1972 and substantially renovated in 1989 with approximately 2.2 million square feet of gross floor area. major tenants include the 650-attorney Cleary, Gottlieb, Steen & Hamilton law firm.

Earlier this year, Brookfield refinanced the property with a $432 million investment grade mortgage which has a term of 10 years and a fixed-rate coupon of 6.75%.

The World Financial Center is a four-building, 8-million-square-foot commercial complex along the edge of the Hudson River next to the collapsed World Trade Center Towers. Brookfield owns buildings #1 and #2 in full and half of #4. Major tenants include Merrill Lynch, Dow Jones, CIBC Oppenheimer, Nomura Securities and Deloitte & Touche.

Brookfield could not vouch for the status of Building #3 in the complex, which is closest to the World Trade Center. That building, which may have experienced greater damage than the others, is owned and occupied by American Express.

In addition to its two projects near the World Trade Center Brookfield also owns the 44-story, 1.7 million-square-foot office tower at 245 Park Avenue in Midtown Manhattan, and recently completed demolition and started foundation work on its newest development, the 1.2 million-square-foot CIBC World Markets Tower at 300 Madison Avenue, also in Manhattan. The building, scheduled for completion in late 2003, is fully leased to CIBC World Markets for a term of 30 years.

September 13, 2001, USAToday,  World Trade Center — south tower tenants,

 - Updated 08:51 AM ET,

April 21, 2002, The Observer, "The Journal Tries to Leave Wall Street," by Sridhar Pappu and Tom McGeveran,

 8:00 p.m

Paul Steiger, managing editor of The Wall Street Journal , stood on a desk in the paper's temporary newsroom in South Brunswick, N.J. It had been five weeks since the terrorist attack of Sept. 11 had made The Journal's offices at the World Financial Center uninhabitable, scattering the newspaper's operations to various locations across the metropolitan region.

Now Mr. Steiger was preparing to address the future. According to people who were present in the temporary newsroom, Mr. Steiger began with a story about his boyhood move from Connecticut to Princeton, N.J. He then said that 250 of the nearly 800 workers from 1 World Financial Center, including the newspaper's copy desk, wouldn't be returning to New York; they would remain in New Jersey. But he assured everybody else that they would be back in devastated downtown eventually. "We're not going to let the bastards chase us out of there," Mr. Steiger said, according to sources.

As it turns out, they may not be there-or anywhere near there-for long. The Observer has learned that The Journal 's parent company, Dow Jones, is in the market for 150,000 square feet of office space for a new, consolidated Manhattan office for the paper-in midtown, sources familiar with the search say.

"They want to get out of downtown," a source said.

The newspaper's lease on its seven-floor spread at the World Financial Center is up in 2005; currently, Dow Jones is marketing about half that space for sublease, and no deal is in place to renew the master lease. There's no move-in date in the newspaper's plans to move 400 staffers back to the remaining space in the World Financial Center have not been completed.

Recalling Mr. Steiger's talk, Ron Chen, a Journal copy editor and president of IAPE/Communications Workers of America Local 1096, the union that represents Dow Jones employees, put it this way: "That might sound like a macho thing to say. But that doesn't really deal with what's on people's minds and what it'll be like to work there."

For lower Manhattan, the significance of a Wall Street Journal move uptown is not measurable in dollars and cents. The space the newspaper holds in the World Financial Center is hardly enough to make or break the downtown commercial real-estate market. But since 1889, The Journal has been the voice of Wall Street, the undisputed center of power in the financial world. If that voice now speaks from midtown, the symbolism will be all too clear. Wall Street isn't what it used to be, even before the terrorist attack; financial institutions have been moving to midtown for years. That was bad enough-but The Wall Street Journal on … Sixth Avenue? That would be a crushing psychic blow.

Mr. Steiger was unavailable for comment. Steven Goldstein, a vice president with Dow Jones, said that The Journal 's parent company had looked at a number of buildings in several Manhattan locations, including midtown. But he echoed recent statements from The Wall Street Journal and Dow Jones about their commitment to lower Manhattan, saying, "We expect to remain downtown when our lease is up in May 2005."

The Journal 's recent Pulitzer Prize for breaking news -- which prompted Mr. Steiger to stand up on a table again, this time with champagne in hand-served as a reminder of the newspaper's ordeal and physical transformation. The Sept. 11 attacks forced Dow Jones to disperse its staffers, keeping 300 people in South Brunswick, while sending another 500 to digs in Manhattan and other parts of New Jersey. While most of The Journal 's reporting staff bunkered down into quarters on Canal Street, others-including members of the Weekend Journal and the paper's editorial page-moved into the former offices of, a Web site owned and closed by Dow Jones.

End of Good Feelings

It's fair to say that any era of good feeling about the matter ended in October with the company's decision to keep most of those currently in South Brunswick there permanently. In exchange, those affected were offered a bonus of 50 percent of their base salary, with a minimum of $25,000 and $50 per week for a year for commuting expenses. Sources familiar with the situation said that Dow Jones' possible midtown move would not affect those in South Brunswick.

One Journal source put it this way: "There are people in South Brunswick that would eat nails and breathe asbestos to get out of South Brunswick." Referring to lingering health issues downtown, the source said that "many of the union's concerns about safety don't hold much sway with them."

Indeed, the situation has created a schism between Journal employees who want to go back to the World Financial Center but can't, and those who have to but would rather not. While Journal sources have described their Soho digs as "cramped" and "not all that comfortable," for the most part, they said, they actually prefer their temporary offices to the World Financial Center.

"The World Financial Center was never a great place to be," one Journal source said. "There's no character there. I'd rather stay in Soho, given the neighborhood."

Moreover, sources said, a return to the World Financial Center would bring new problems. While the union continues to study air-safety issues at the site, sources expressed uneasiness about being flush against the site of the tragedy. Others noted that they would have to face the hassles and aggravations of working next to what amounts to the world's biggest construction zone.

"People have bad memories of that place and that day," one source said, "They feel going back would awaken bad things-which is understandable."

Another source said, "Most people here have very specific concerns: Where are you going to eat lunch? How are you going to meet sources? You literally have to walk a mile to get out of there."

In the meantime, sources said, speculation has begun as to whether a return will actually happen. One of the most persistent rumors has The Journal moving to a new headquarters at 55 Water Street. Mary Ann Tighe, a vice chairwoman with Insignia/ESG who represents the building, would not comment on the rumors. Similarly, Mr. Goldstein said that Dow Jones intends to return its employees to the World Financial Center as early as July.

"I think the company's looked at lots of options," one Journal source working out of the Soho office said. "They've looked at staying in this building, at going to another building. But none of us know. God knows how hard they're trying, what the hurdles are. I can tell you, though, people would much rather either move to a new building or stay in this one than go back."

If they do go back, they'll find huge changes. In a meeting with union representatives on April 4, Dow Jones executives gave the first glimpse of what life inside the new streamlined offices would be like. Only three of the seven floors once occupied by the paper and company will remain in the hands of Dow Jones: floors 9, 10 and 11. The others-floors 12, 14 (site of the company cafeteria), 15 and 16-will be subleased to other firms.

"If you're going to give up three or four floors," Mr. Chen said, "why not all of them? Why not admit you can be somewhere else in lower Manhattan? The company has indicated that once the lease is up in a couple of years, everything is up for discussion.

"There's no question," Mr. Chen continued, "there's no doubt that The Journal has to be in Manhattan, in lower Manhattan. The question is: Do you have to be in a building next to Ground Zero?"

Brookfield Properties, which owns 1 World Financial Center, hopes others don't share that view. Work on the building, which was severely damaged on Sept. 11, began almost the next day as Ric Clark, the company's chief executive, started placing orders for granite, marble and glass. But seven months later, the building still is desolate.

Sabrina Kanner, a vice president at Brookfield who is managing the reconstruction of the Winter Garden, the World Financial Center's centerpiece, was busy on April 15 supervising the delivery of tons of Carrara marble mined at a rapid-fire pace in Italy to restore the floor of the vast, glass-enclosed concourse by September.

And rent breaks for retail tenants in the buildings, engineered by Brookfield to get some life back into them and make them more attractive for new and returning tenants, have been in effect from the very start.

But for George Anastasakis, who runs World Financial Center Florist, the building is still a ghost of its former self.

"We're doing about 30 percent of [the business] we were doing prior to Sept. 11," he said. "Our location in [Building 1] is still closed; that was damaged badly. It needs total reconstruction right now. We're always very optimistic: We see more and more people every week in the offices. But still, to get back to the pre–Sept. 11 levels, I would think it would take quite a while."

Besides Mr. Anastasakis, few businesses have been able to reopen in the World Financial Center. There's a Starbucks and a newsstand; a California Burrito and SouthWestNY, a lunch spot; and Godiva Chocolatier has opened a cart while its store in the World Financial Center remains shuttered. Businesses like these help make a place that witnessed so much destruction seem a little more cheerful-an important factor in getting companies to return. So, Mr. Anastasakis and others said, Brookfield has been "making it easier to pay the rent."

Financial Incentives

The city and the state are pitching in, too, trying to lure businesses to return to lower Manhattan with incentive programs fueled by some $500 million in federal aid. Offers to companies-which would include a mix of tax abatements and subsidies-are meant to stimulate job creation in lower Manhattan, where, according to M. Myers Mermel of, a real-estate consultancy and database, nearly 60,000 jobs were lost. It wasn't clear whether Dow Jones had had an offer to stay-but several brokers whose clients have received such offers said they came with a serious drawback.

"You have to commit to keeping X number of jobs in [lower Manhattan] for X period of time," said one broker whose clients have received offers. "And if you fail to do that, you must reimburse the city."

With interest, too. The traditional incentive packages ask companies who can't keep up their end of the bargain to pay back the money with about 8 percent interest. It's called a "clawback provision," and it's meant to stem the tide of companies taking tax breaks and then not living up to their side of the agreement. But the first round of offers being drawn up for lower Manhattan require an even more severe commitment, charging 16 percent interest on the money a company takes from the city and state if it ends up deciding not to stay in lower Manhattan.

What's worse, new accounting procedures require a company to list the money it receives from the government on a separate line on its balance sheets labeled "reserved against contingent liability."

"It's not the sort of thing you want on your balance sheet," the broker said.

But even if Dow Jones decides not to sign on for an incentive package, there are significant financial advantages to be had in lower Manhattan.

According to Mr. Mermel, the average monthly rent per square foot in lower Manhattan is now as low as $37.66. In midtown and midtown south, the rents average $52.61.

That hasn't stopped some firms from moving their headquarters from lower Manhattan-many for reasons that were relevant even before the city was attacked.

"What 9/11 did was really precipitate decisions for companies that, by virtue of having low-cost, long-term leases and low-cost rental space, were keeping facilities and people downtown by virtue of inertia," said Kathryn Wylde of the New York City Partnership. "And that includes Morgan Stanley, Marsh and McLennan, Deutsche Bank, Bankers Trust and Salomon Smith Barney in 7 World Trade."

The main reason cited for moving to midtown is the neighborhood's proximity to Penn Station and Grand Central Terminal, where commuters from Long Island and Westchester can get a one-seat ride to and from the office. And even with efforts underway to quickly rebuild and expand the downtown transportation infrastructure, it could be years before the benefits of those improvements are felt.

Most observers agree that it will take a long time for lower Manhattan to recover from the Sept. 11 attack. What the financial district will look like when that recovery comes is anybody's guess.

There are some who say the city can't depend on financial institutions to help revive the downtown economy, and serious proposals to create incentives for biotech and other industries-potentially as new staple businesses for lower Manhattan-are advancing with the city-state agency now responsible for rebuilding lower Manhattan.

John Steele Gordon, a historian of Wall Street and author of The Great Game: The Emergence of Wall Street as a World Power, 1653-2000 , said the forces pulling the financial district apart may be larger than many people have realized.

"It is [still] the financial center, to the extent that there is a center any more to the financial world," he said. "It's so quickly moving into the ether. You can be a major player on Wall Street and be anywhere …. That's why the symbols of Wall Street, like The Wall Street Journal and the New York Stock Exchange … have to stay there."

When asked if he could imagine Dow Jones leaving lower Manhattan after the expiration of its World Financial Center lease, Mr. Chen said, "I cannot. I absolutely feel our offices should be in lower Manhattan near Wall Street."

In a similar vein, Mr. Goldstein, the Dow Jones vice president, said: "Right now we have a lease until 2005, and we plan on returning to those three floors. We've always been downtown, and our goal would be to remain downtown."

December 17, 1997. Real Estate Weekly,

December 17, 1997, Real Estate Weekly, "Blue Cross/Blue Shield signs largest WTC lease of decade. (World Trade Center)

Port Authority Executive Director Robert E. Boyle has announced that the World Trade Center has signed its largest lease of the past 10 years with Empire Blue Cross and Blue Shield. The company will move its corporate headquarters from Midtown, occupying some 461,000 square feet on 10 floors of One World Trade Center.

The 21-year lease has an aggregate value of approximately $246 million.

"This lease speaks volumes about the vitality and appeal of the World Trade Center, and of Downtown Manhattan," Boyle said. "Empire Blue Cross and Blue Shield is one of the region's premier companies and top employers. We are proud that the firm chose the state-of-the art facilities and attentive service available at the Trade Center, and we warmly welcome our newest tenant and its headquarters staff."

"This new lease caps a record year for the World Trade Center. The Port Authority has signed leases for more than two million square feet this year - 20 percent of its total office capacity. The office complex's total occupancy is nearly 90 percent," Boyle added.

Empire Blue Cross and Blue Shield, New York State's largest health insurance company, will relocate from its former headquarters at 622 Third Avenue, starting in fall 1998. The company has been at the Midtown address since 1974.

"Empire has always been a New York company, and our commitment to New York remains steadfast," said Michael A. Stocker, M.D., president and CEO of Empire. "We are delighted to be relocating our corporate headquarters to one of New York City's most prestigious business locations."

Exclusively representing Empire Blue Cross and Blue Shield in the transaction were Insignia/Edward S. Gordon Co., Inc.'s Howard Fiddle, Ned Midgley, Carol Nelson, Mary Ann Tighe and Joel Wechsler. Acting on behalf of the Port Authority were Cherrie Nanninga, director of Real Estate, and Tom Lynch, manager of Office Leasing.

"This lease represents the largest major relocation of a Midtown tenant to Downtown in more than a decade, and points out the renewed acceptance of Downtown as a headquarters location," said Insignia/ESG Executive Managing Director Mary Ann Tighe. "Major tenants considering Downtown cannot ignore the first-class facilities at the World Trade Center. Along with Blue Cross, we've represented Aon and Banker's Trust in their deals at the Trade Center this year for a combined total of more than a million square feet."

Among the recent improvements to the World Trade Center are modernized elevators and escalators, increased electrical, heating and air-conditioning capacity, and a new operations control center. The complex also features fiber-optic communications services and access to both cable TV and direct satellite transmission. The Port Authority has invested or planned more than $700 million in capital improvements to the World Trade Center from 1992 through 2001.

In addition to Empire Blue Cross and Blue Shield, other major signings at the Trade Center this year include OppenheimerFunds, Aon Risk Services, Inc., Bankers Trust, Dow Jones, Thacher, Proffitt & Wood and Exco Noonan.

October 24, 2001, USA Today, 'Wall Street' migrates to Midtown," by Noelle Knox and Martha T. Moor, USA TODAY

Updated 12:11 AM 

NEW YORK — Ever since the Erie Canal opened in the early 1800s, Wall Street has been the money capital of America. The financial district has survived the Civil War, a street bombing in 1920, the Great Depression, the 1987 stock market crash and a 1993 truck bombing.

But on Sept. 11, the future of Wall Street was obscured by an acrid cloud of ash and smoke. Plans for a new building for the New York Stock Exchange on Wall Street are now uncertain. The financial district has lost about 45% of its best office space. Thousands of brokers and traders who fled the towers aren't coming back.

One of the nation's largest brokers, Lehman Bros., has abandoned its headquarters near the World Trade Center and purchased a building 4 miles away in Midtown Manhattan. Financial services giant American Express, which also faced the twin towers, is seeking a new home. Even the Nasdaq stock market, where many high-profile technology companies are traded, wants to move its executive offices from the financial district to its market site in Times Square.

For years, the financial industry has been slowly migrating from its historic home in the warren of streets around Wall Street to the more spacious and glamorous office towers of Midtown Manhattan. Morgan Stanley, J.P. Morgan Chase, Citigroup, and Bear Stearns have all moved north.

The World Trade Center attack has accelerated the trend, turning Midtown — from 30th Street up to 59th Street — into the nation's new financial district.

New York officials have been fighting for decades to stem the exodus of financial firms leaving the city for cheaper suburban quarters. Now they are struggling to keep temporary moves to office space in New Jersey or Connecticut from becoming permanent. City and state officials have asked for $2 billion in federal aid to provide incentives for firms to move back into the financial district — as much money as New York has spent on business retention programs in the past decade.

But on Wall Street, where the credo "time is money" was invented, it might be too little or too late.

The terrorist attack left the financial district looking like a war zone. The New York Stock Exchange, 6 blocks away from the World Trade Center site, is surrounded by barricades. National Guard troops patrol the streets. Damaged subway stations and a crucial train link to New Jersey remain closed, lengthening commutes for thousands of workers. Employees arriving at Goldman Sachs headquarters near Wall Street have to pass two security checks and a bomb-sniffing dog.

A 53-story office tower overlooking the Trade Center site, where tenants include other Goldman offices and the administrative offices for NASDAQ, was supposed to reopen Monday. But city officials ordered it to remain closed for unspecified reasons.

Hardwick Simmons, chairman and chief executive officer of NASDAQ, may not wait for the building to reopen. Simmons has been running the stock market, where companies such as Microsoft and Intel are traded, from Nasdaq's media and visitors center in Times Square since Sept. 11.

"We like the space we're in downtown, but it's just better business for us to be here (in Midtown) where more of our activities take place," he said, adding that he has not had any discussions with the city about staying in the financial district and is "not looking for any incentives from the city."

Stock quotes in Midtown

In the middle of Times Square, giant NASDAQ video screens display the latest stock market prices. The new U.S. headquarters for Reuters financial newswire is a block away. Up the street on Broadway, the day's news headlines and stock quotes stream across the face of the Morgan Stanley building, while an electronic screen on one side flashes foreign stock indexes and currency prices.

The streets teem with people. The restaurants are full.

Big brokerage firms like Midtown because the office buildings are bigger and newer, providing the huge trading floors and miles of telecommunications wiring they require. Midtown is where the suburban commuter rail links are and where all the theaters and restaurants sit, making it easier to entertain out-of-town clients.

This is the neighborhood where Lehman Brothers is planting its flag. The brokerage, whose headquarters were across the street from the World Trade Center, agreed to pay about $650 million for the office tower on Seventh Avenue between 49th and 50th Streets. It beat out a bid from American Express, says John Cefaly, vice chairman of Cushman & Wakefield, a commercial real estate firm.

Credit Suisse First Boston, CIBC, Fiduciary Trust, Cantor Fitzgerald and Keefe Bruyette & Woods also are moving their displaced businesses to Midtown.

"The feeling was it would be too emotional for people to have work in the area where the World Trade Center was," says Neil Shapiro, a spokesman for Keefe Bruyette & Woods. The investment bank lost 67 employees when the north tower collapsed. "There are just too many bad memories."

Other companies are moving operations to surrounding suburbs. One is The Wall Street Journal, which is giving up half of its office space near the World Trade Center. When Dow Jones, parent of the newspaper and Barron's, a financial weekly, returns to the World Financial Center, it will bring back 425 of the 750 employees who worked there before Sept. 11. Some of the rest will move to offices elsewhere in Manhattan. But most will work 50 miles away in New Jersey.

City plans incentives

The city is hoping to offer about $2 billion in incentives for corporations to stay in lower Manhattan through the creation of a "Liberty Zone" around the World Trade Center site. The package — part of a $54 billion recovery and reconstruction bill before Congress — would include employee retention grants and sales tax and other tax breaks. City economic development officials also want to issue $15 billion in tax-exempt bonds that would then be used to provide attractively priced loans to developers to rebuild.

"No firm has told us that they are not interested in going back downtown," says Michael Carey, president of the city's Economic Development Corp. "Lower Manhattan will emerge once again as the financial center of New York City and as the financial capital of the world," Carey says. "In the short term, can you say that? Probably not. People have had to make interim arrangements. But our conversations with business have been consistent in that people have said, 'We would like to come back to lower Manhattan.' "

Much hangs on the ability to offer incentives, Carey says.

"It may require more than $2 billion," says Carl Weisbrod, head of the Downtown Alliance, the neighborhood's business-improvement district. "This is certainly the most essential issue, and the timing of it is crucial. ... Many firms have to make those decisions now."

"We've got to get normal fast, for folks to be comfortable coming back here to work," says Kathryn Wylde, head of the New York Partnership, a leading business group.

Steeped in tradition

In 1792, when merchants gathered around a buttonwood tree at the foot of Wall Street to trade securities, the banks, brokerage houses and insurance companies had to be near each other, and near the heart of commerce — the port. Until 1980, the New York Stock Exchange required brokerage firms to have offices clustered around Wall Street so clerks could deliver paper stock certificates bought or sold that week. Now computers and telephones link global markets. Distance seems irrelevant.

Some of the old guard, notably Goldman Sachs and Merrill Lynch, remain fiercely loyal to the financial district. And Deutsche Bank is moving into a building on Wall Street that JP Morgan Chase is leaving. But their resolve might waver if Wall Street loses the New York Stock Exchange.

The world's largest stock market has outgrown its neoclassical temple at the corner of Wall and Broad streets. In 1998, the city offered the NYSE a deal, valued between $600 million and $1 billion in tax incentives and construction costs, to give the exchange the bigger home it wanted but keep it in the financial district. Construction across the street from the NYSE was to start early next year.

Those plans are on hold. Instead, the city is renting out the buildings that were to be torn down to homeless companies like the Bank of New York for up to 18 months.

City officials insist the new exchange will go forward. And Richard Grasso, chairman of the exchange, has said, "If that real estate is necessary to keep businesses dislocated by the tragedy from going to other states ... we are going to be partners to the city on that and to the state." Grasso declined comment for this story.

In quiet conversations around the NYSE, however, some say they can only wait so long. "If it's more than a year's delay, the exchange is probably going to be looking at other alternatives," said a person familiar with the deal, who spoke on the condition of anonymity.

Face-to-face trading — buyers and sellers standing inches apart and bellowing trades — remains a cornerstone of the NYSE. And having all the players in a deal — investment bankers, lawyers, accountants — close at hand, able to meet quickly or hold many meetings a day, has long been seen as the major benefit of the financial district's tight quarters.

"If you have e-mail and fax machines, you don't need to be literally across the street from the stock exchange. But on the other hand, you don't want to be trading from Omaha," Carey says. "You want to be able to go downtown and see people."

But the World Trade Center attack revealed the vulnerabilities of concentration. The entire financial district was shut down for five days, the longest since the Great Depression, and reopened only after crews worked around the clock to restore phone and power lines.

That has apparently made some firms rethink whether it is wiser to spread out their employees. When Lehman bought its new Midtown headquarters building, the seller was Morgan Stanley. Morgan had decided the tower was too close to its headquarters, two blocks away.

The NYSE might divide its trading floor into two locations as part of a new crisis contingency plan.

Beyond its roots

There is nothing more classically New York than a neighborhood being completely transformed, even against its will. "The notion of any neighborhood being stable over a long period of time is a chimera. It doesn't happen," says historian Mike Wallace, co-author of Gotham, the Pulitzer-winning history of New York City.

Posh residences were built in Battery Park City, the neighborhood built on landfill excavated during the Trade Center's construction. Empty commercial buildings have been converted into apartments and condominiums. To fill other office space, the city offered financial incentives to multimedia firms to move downtown.

Residents in the financial district have increased by 60% the past decade, to about 25,000. There are more grocery stores, dry cleaners, two grade schools and one of the city's top high schools. There are even plans for a Frank Gehry-designed branch of the Guggenheim Museum on the waterfront.

Local community groups are urging that a bigger plan for rebuilding lower Manhattan be developed — one that recognizes that the financial district no longer becomes a ghost town after the stock market closes at 4 p.m.

They want mass transit improvements and better integration of parts of the neighborhood that were divided by the bulk of the World Trade Center. The towers, which stood on a raised plaza, served as a wall between Battery Park City to the west and the financial district to the east.

Larry Silverman, who owns the 99-year lease on the World Trade Center site, has vowed all along to rebuild. His current plan is to erect four 50-story office towers.

Not everyone favors trying to recreate the financial district. "I'm not sure that still makes the most sense for lower Manhattan," says Jonathan Bowles, research director for the Center for an Urban Future. "Those types of tenants have been on the way out for a while now."

March 4th - March 10th, 2005, LowerManhattanInfo,  "Demand for Downtown Office Space Continues to Grow,"

Friday, March 4: Lower Manhattan's vacancy rate for class A office space continued to fall in February, registering at 13.2 percent and signaling continued economic growth downtown, Dow Jones reported.

The drop in vacant space -- a slight decrease from January's 13.4 percent and the 13.8 percent recorded a year earlier -- is attributed to Fried Frank Harris Shriver & Jacobson's renewal and expansion of a lease at 1 New York Plaza -- the largest real estate deal of the month. The law firm is also considering the possibility of moving to 7 World Trade Center once it is completed, according to Dow Jones.

Robert Sammons, director of research at Colliers, a commercial real estate services firm, expects downtown rents to rise from 4 percent to 5 percent in 2005, due to renewed interest in the area, Dow Jones said.

Vacancy rates for class A office space also fell throughout Manhattan for the fourth month in a row. In February, citywide rates dropped to 9.4 percent from 9.6 percent in January, steadily approaching a low of 9 percent not seen since April 2002, Dow Jones noted.

90 West Street Reopens for Business

Monday, March 7: After sustaining extensive damages on September 11, 2001, from the collapse of nearby 2 World Trade Center, 90 West Street opened its apartment rental office on Monday -- a sign that the building's restoration is nearing completion, Newsday reported.

A former office building designed by architect Cass Gilbert, 90 West Street is in the final stages of a $148 million renovation project that seeks to restore much of the 1907 neo-Gothic structure and convert it into an apartment building. Tenants are expected to begin moving into the building's 410 rental units by May 1, and full occupancy is expected by late July, Newsday said.

As part of the renovation project, the building will feature a new $4 million, 45-foot mansard roof, a $5 million, three-story granite base, and $11 million worth of new terra cotta tile and decorations -- including the replacement of more than 100 gargoyles, the paper said.

For more than two years, 90 West Street remained blanketed under a 23-story construction veil supported by scaffolding. Just last year, developers were granted $106.5 million in tax-exempt Liberty Bonds and other financing from the New York City Housing Development Corporation to restore the building. Additional funding for the project was provided by the reconstruction partners themselves, including Brack Capital Real Estate, the Kibel Companies, and hoteliers Richard Born and Ira Drukier, the New York Times reported last week.

Citys 9/11 Liability Risk Drops

Tuesday, March 8: New York City's liability risk from lawsuits over the World Trade Center attacks on September 11, 2001, has decreased to $1.3 billion -- a dramatic drop from the original estimate of $9 billion -- due largely to assistance provided by the federal September 11th Victim Compensation Fund, the Daily News reported.

The fund, which officially closed in June 2004 after nearly three years of operation, compensated the families of more than 5,000 9/11 victims with a collective total nearing $7 billion. To be eligible for the fund, applicants agreed to drop any lawsuits against the airlines or governmental agencies, causing the majority of claims against New York City to decrease, the News said.   [or $1,400,000 per claim]

There remain 176 pending personal-injury lawsuits relating to the 9/11 attacks against the city -- the majority of which were filed by firefighters and other emergency personnel who participated in rescue and recovery operations at Ground Zero, the paper noted. 

Tribeca Film Festival Readies for Its Fourth Year

Tuesday, March 8: Tribeca Film Festival founders Robert De Niro, Jane Rosenthal, and Craig Hatkoff joined festival executive director Peter Scarlet to announce the expanded program and dates for the 2005 Tribeca Film Festival.

The festival, now in its fourth year, will kick off on April 19 and will showcase more than 250 features, documentaries, and short films in locations throughout Lower Manhattan before its close on May 1. The event will also feature a full range of offerings, including gala premieres, independent films, panels, free community events, and a Family Festival.

Among the highlights included in this year's festival are the world premiere of Sydney Pollacks's The Interpreter, starring Sean Penn and Nicole Kidman, and a short film competition in collaboration with

The competition allows amateur filmmakers to submit films for the chance to win a $50,000 grant and have their projects screened at a downtown theater. Films, which must be between two and seven minutes in length and appropriate for PG-13 audiences, can be submitted through the website through April 13, after which online customers will view and rate them. At the end of May, the five highest rated films will be featured on the website, and customers will then select a winner.

The Tribeca Film Festival was created by Tribeca Film Institute founders Robert De Niro, Jane Rosenthal, and Craig Hatkoff in response to the 9/11 attacks and seeks to foster the economic and cultural growth of Lower Manhattan. For more information about the 2005 Tribeca Film Festival, including schedule information and details on how to get tickets, visit

SEC Relocating to World Financial Center

Wednesday, March 9: The U.S. Securities and Exchange Commission (SEC) announced its plans to relocate its New York offices, currently located in downtown's Woolworth Building, to the World Financial Center, Bloomberg News reported.

The agency is scheduled to sign a lease for 225,000 square feet of office space at 3 World Financial Center later this week and plans to move to the facility in April. The director of SEC's New York office, Mark Schonfeld, notified employees about the decision on Tuesday, March 8, Bloomberg said.

Formerly located at 7 World Trade Center, the SEC was forced to relocate its offices to the Woolworth Building at 233 Broadway after 7 WTC collapsed during the 9/11 attacks. While the commission had originally planned to return to 7 WTC once it was rebuilt, increased rental fees and expenses at the new site caused the agency to relocate to 3 World Financial, Bloomberg explained.

The SEC's 150,000-square-foot space at the Woolworth Building will soon be occupied by another government agency, which frees the SEC from its 10-year lease, Bloomberg added.

USA. New York. New York City. World Trade Center Overpass. 1998 (LON32332) 

Article from: Magnum Photos 

Article date: January 1, 1998 

Author: Stuart Franklin

USA. New York. New York City. World Trade Center Overpass. 1998


Adult - 25 to 45 years old Adult Financial District (NYC) Man - 25 to 45 years World Trade Center Urban development America North America Architecture Architecture Elements of Automobile Office building Framing Communication Document Dominant Street lighting Photographic effect United States of America Expression Window Human being Building Methods of transport Interior Manhattan Man (all ages) Street furniture Means of transport New York State New York City Shadow Photograph Bridge Population Road & other roadways Road safety Silhouette Solitude Transport Road transport Town planning & housing Communication route Seen through Continent Art Street lamp Pedestrian walkway Twin Towers World World Trade Centre Mature City City Car USA USA US US American (geographical) American (geographical) U.S. U.S. Emotion Attitude Sensation (Perception) Population pyramid People People Person Person Inside Indoors Man Male Men NY NY NYC NYC N.Y.C. N.Y.C. Lonely Alone Loneliness Vehicle Looking through Lamp post Pedestrian crossing Zebra crossing Pelican crossing WTC USA. New York. New York City. World Trade Center Overpass. 1998 USA. New York. New York City. World Trade Center Overpass. 1998 USA. New York. 1998. USA. New York. 1998. 1998

Copyright (c) 1998 Magnum Photos

March 4, 2001, New York Times, "CITY LORE; Learning to Love the World Trade Center," by Tara Bahrampour,

MAYBE it happened in 1974, when a Frenchman strung up a tightrope and balanced his way from one tower to the other. Maybe it was in 1977, when a man they called the human fly scaled the South Tower as hundreds of New Yorkers looked on in amazement. Or it could have been in 1975, when an unemployed construction worker parachuted from the North Tower in an attempt to draw attention to the world's poor (some office workers in the building called to report a suicide; others waved).

But Robert Fitch, author of ''The Assassination of New York'' (Verso Books), has his own theory about what made New Yorkers learn to love the World Trade Center, which 10 days ago was leased to a commercial real estate firm based in Paramus, N.J., for $3.25 billion -- the largest such deal ever.

''King Kong was probably the watershed moment,'' he said, referring to the 1976 remake of the movie in which the gorilla, desperately in love with Jessica Lange, scales one of the towers. ''If King Kong could love it, who are we to disagree?''

We don't. Today the World Trade Center is the city's most often-sent postcard image, it appears in countless advertisements and its familiar silhouette once formed the logo of WPIX television, underscoring the indelible mark it has made on the Manhattan skyline and the city's psyche.

It wasn't always that way. When construction began in 1966, the Twin Towers were part of a less-than-popular urban renewal plan that sought to transform shabby Lower Manhattan into a sleek business district. The 110-story towers would form a hub for international trade, and, planners hoped, would help recapture Lower Manhattan's lost title as the city's main business center.

The project added 12 million square feet of office space, and its excavation soil formed Battery Park City. But its construction destroyed 16 acres of existing neighborhoods, and many jobs were lost.

Besides, people thought it was ugly. ''Architectural historians and art critics were mostly unimpressed,'' said Angus Kress Gillespie, professor of American studies at Rutgers and author of ''Twin Towers'' (Rutgers University Press). ''They called it banal, boring, unimaginative.''

A telling sign of the times was the fact that the towers' offices were designed without light switches. Lights would simply be left on overnight. ''At that time it was a rational decision,'' said Mr. Gillespie, noting that energy conservation was not then a priority. ''But just as the building was completed, there was this big energy crisis. Everything just seemed to go wrong.''

Even birds hated the World Trade Center.

''The buildings interfered with flight patterns,'' Mr. Gillespie said. ''Birds were bumping into the buildings and dropping dead on the plaza.''

But over the years Manhattanites got used to the double-cigarette silhouette hanging from the lip of their island.

And although the World Trade Center, unlike the Brooklyn Bridge or the Empire State Building, has not inspired droves of artists, a few have warmed to its gleaming aluminum charms. The artist and architect Allan Wexler recalled going out daily at dusk to photograph the new towers. He saw them as ''not just an icon but a barometer that kind of marks the changing weather and lighting conditions.'' As for their metaphysical qualities, ''I always saw it as a sort of Tower of Babel or Jacob's Ladder,'' he said, ''an attempt to penetrate through the cloud layer and attempt enlightenment.''

Mr. Wexler was so taken that he planned several projects around the towers. One, never carried out, involved pulling down the shades of specific windows at night to allow the lighted windows to depict different images.

''I was interested in the idea of binary surfaces,'' he said. The towers would be blank canvases upon which the forms of other buildings, like the Empire State Building or Notre Dame, could be etched. He described it as ''a cataloguing of various images that the World Trade Center could then turn itself into,'' allowing the New York skyline to change nightly.

Eventually Mr. Wexler produced his own renditions of the project, as well as a photomontage in which he added a third, identical tower to the skyline.

Meanwhile, public sympathy got a boost from the daredevil acts at the towers. It helped that the city, after arresting each stuntman, played its public relations cards right. The tightrope walker was sentenced to perform a high-wire act for children in Central Park. As for the climber, George Willig, ''It took hours for him to climb up,'' said Mr. Gillespie, adding that the feat was tracked by live television cameras. ''He gets to the top, he's arrested.''

To deflect negative publicity about the arresting of a folk hero, the city fined Mr. Willig one penny for each of the 110 floors he climbed. ''So George Willig gives the mayor $1.10,'' Mr. Gillespie said, ''they shake hands, and what could have been a P.R. disaster becomes the World Trade Center's first turnaround.''

Another turnaround involved the views. While one tower housed an expensive restaurant, Windows on the World, the other offered an observation deck that was deliberately inexpensive. ''Rank-and-file New Yorkers came to embrace the building,'' Mr. Gillespie said. ''It's really won the hearts and minds of New Yorkers.''

And of the world at large. ''If you're treating it as poetry,'' Mr. Gillespie said, ''it stands for capitalism, for free trade, for private enterprise, and, by extension, for the American dream.''

Even illegal immigrants have joined the chorus. According to the Immigration and Naturalization Service, stowaways on freighters in New York Harbor have been found carrying only a crumpled postcard of the World Trade Center. And the 1993 bombing only seemed to bolster the towers' sense of permanence, as a truckload of explosives failed to topple them.

Technically, its title as tallest building on earth still stands, sort of. ''It's not the tallest building in the world, and yet it is,'' said Valerie Lewis, a spokeswoman for the Alliance for Downtown New York. If you count the trade center's 316-foot antennas, she explained, it tops even the 1,483-foot Petronas Towers in Kuala Lumpur, Malaysia.

To many, the recent real estate transaction confirmed the World Trade Center's status as an indispensable city landmark.

''It was quite a change, quite an embrace,'' Mr. Gillespie said. ''What was once kicked around by everybody is now the most precious real estate in Manhattan.''

Photos: A poster, left, from the 1976 remake of ''King Kong.'' Above, a photomontage of the towers by Allan Wexler. Far left, stowaways arrive with crumpled postcards in their pockets. (Allan Wexler)

November 5, 1993, PR Newswire, "The Federal Home Loan Bank Moves to Seven World Trade Center,"

NEW YORK, Nov. 5 /PRNewswire/ -- Alfred A. DelliBovi, president of the Federal Home Loan Bank of New York, today announced that the Home Loan Bank will relocate its lower Manhattan headquarters within the World Trade Center. The bank is moving to the 22nd floor of Seven World Trade Center.

"Our new lease will permit us to continue our 58-year presence in New York's financial district for another 22 years and significantly lower our overhead costs," said DelliBovi.

Under the terms of the new lease, signed today, the Home Loan Bank will occupy the entire 22nd floor -- 46,000 square feet -- of Seven World Trade Center. The new lease runs until July 31, 2015. The bank will be the first tenant to occupy the 22nd floor. The move is expected to be completed by late spring of 1994 when the build-out of the 22nd floor will be completed.

"The signing of a new lease is the culmination of three years of no nonsense negotiating. It ensures that we are getting world-class office space -- equipped for state-of-the-art data processing -- at a rock bottom price," added DelliBovi.

The Home Loan Bank currently occupies the 103rd floor of One World Trade Center. The lease for these quarters expires in August 1994.

FHLBank of New York is a $20 billion institution. It is a stockholder-owned, "AAA" rated wholesale bank providing low cost, high quality home financing products to 254 local lenders. A recent survey indicates that these products have helped to finance one out of six home mortgages in the Home Loan Bank's service area: New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands.

This transaction was coordinated and negotiated by Jeffrey A. Lichtenberg, executive vice president, and Philip Weiss, senior vice president of Peter R. Friedman, Ltd.

Seven World Trade is owned and operated by Silverstein Properties of New York.


/CONTACT: Eric Amig of Federal Home Loan Bank of New York, 212-912-4678/

CO: Federal Home Loan Bank of New York ST: New York IN: FIN SU: RLE

CK-TA -- NY001B -- 1135 11/05/93 09:52 EST

Cite this article

"THE FEDERAL HOME LOAN BANK MOVES TO SEVEN WORLD TRADE CENTER." PR Newswire. PR Newswire Association LLC. 1993. HighBeam Research. 28 Mar. 2011 <>.

November 14, 2006, SeekingAlpha, "An In-Depth Look At The KBW IPO," by Bill Simpson, 

On November 12, Bill Simpson wrote an analysis of Keefe, Bruyette Woods (KBW). The text of Mr. Simpson's original writeup follows: 

KBW - KBW Inc. (Keefe, Bruyette Woods) plans to offer 7.5 million shares (assuming over-allotment is exercised) at a range of $19-$21. Insiders are selling 3.75 million shares in this offering. KBW will be self-underwriting their own offering. Merril Lynch will joint lead the offering with 6 other houses co-managing. Post-offering KBW will have 30.4 million shares outstanding for a market cap of $608 million on a $20 pricing. IPO proceeds will be used for general corporate purposes. 

Directors and Executive Officers of KBW will own 23% of shares outstanding post-IPO, all employees as a whole, 80%. Pre-IPO, entire firm is employee/director owned with no single individual owning more 4.2% of outstanding shares. 

From the prospectus:

'We are a leading full service investment bank specializing in the financial services industry. Since our founding in 1962, our commitment to this large and growing industry, our long-term relationships with clients and our recognized industry expertise have made us a trusted advisor to our corporate clients and a valuable resource for our institutional investor customers.'

We've seen a number of boutique investment banking ipos the past few years including Lazard, Greenhill, Evercore, Cowen and Weisel. They've broken down into two types: 1) The M&A (mergers & acquisitions) based group that has ridden the wave of consolidation the past few years, showing strong operating results and robust stock market appreciation. This includes Lazard, Greenhill, and Evercore. 2) The underwriting based group that has struggled to show revenue growth the previous 2-3 years, Cowen and Weisel. 

Group one IPOs have been 3 of the best performing ipos of the past few years, while group 2 has struggled.

The key to this deal is the following line from the prospectus: 'Number one ranking as U.S. M&A advisor to financial services companies in each of the years 2005, 2004 and 2003, ranked by number of deals.' Bingo. Note though that KBW focuses on smaller capitalization companies, so was #3 in M&A in the financial services sector in 2005 (and #9 in 2004) based on value of the deals. Still a strong player in this sector though. 

KBW's operations break into 3 segments:

1) Investment banking. This includes the M&A component as well as IPO and secondary offering underwriting. KBW has been a solid underwriter of financial related IPOs the past few years, carving out a nice little niche for themselves there. In fact they've been #1 in managing U.S. IPOs and follow-on equity offerings for financial services companies in both 2005 and 2004(again based on number of offerings). We've noted above they're also the #1 financials services M&A advisor on deals getting done.. A few recent M&A deals: pending sale of North Fork Bancorporation to Capital One Financial Corporation; the acquisition by Bank of America Corporation of MBNA Corporation; the sale of Household International to HSBC; and the pending sale of Texas Regional Bancshares to BBVA. 

Of the 190 clients for whom KBW executed investment banking transactions in 2005, approximately 45% were companies for which they'd executed other transactions during the previous five years. 

KBW is a strong player in the small and mid-cap financial services niche. In fact they dominate that niche in both M&A and equity deals. Deals involving financial services companies accounted for 31% of all M&A fees and 21% of all underwriting fees in 2005. If the earnings/expenses for KBW look solid, this is enough here to recommend this deal. M&A has boomed the past few years driven by record corporate cash levels and billions in private equity being put to work. Those trends look to continue going forward. To stress again though: KBW plays in the smaller company space, this far they've not really broken into the large M&A deals. Their specialty is regional bank mergers and buyouts. 

KBW in 2006 has seen a sharp increase in structured finance private placement deals. 

Investment banking historically has accounted for 50% of revenues.

2) Trading. KBW focuses trading efforts on the sector they know: banking. they've the #1 ranking by trading volume as trader of U.S. bank stocks with less than $5 billion market Also one of the leading traders in the Nasdaq 100 financial index stocks. Commissions have historically accounted for 30% of annual revenues, proprietary trading 10%. 

3) Research. Number one in five of the seven categories of their research coverage, and second place in the other two categories. Named "Best of the Boutiques" in a survey by Institutional Investor. KBW's research analysts currently cover 489 companies. 

Strategies going forward are to expand the European business and expand the asset management business. Currently KBW manges/advises two related hedge funds. 

Compensation Expense: Overall compensation is always the largest expense line with these type operations and one needs to make certain that the investment banking entity is not funneling all the profits to management/employees but also growing shareholder value. KBW plans to limit total annual compensation and benefit expense to 55%-60% of total revenues. This is in line with similar firms, although should note it is higher then EVR's 50% target. 

History - KBW was founded in 1962 with a focus on the financial services sector. Headquartered in the World Trade Center, 67 employees died on 9/11, approximately 1/2 of KBW's New york staff. Included in this number were five of 9 board members including the co-CEO and Chairman of the Board. KBW planned an IPO in 1999 but that was set-aside after an insider dealing scandal involving the then CEO and a porn star. The ceo resigned and the IPO was scrapped. Not surprisingly there is no mention of this latter event in the prospectus --- if there is they buried it well enough that I didn't find it. 


$1.75 X's book value on a $20 pricing. 

Revenues in 2005 at $307 were flat coming off a strong 2004. Revenues in 2006 however have really picked up thanks to strong increases across the board in investment banking, commission trades and proprietary trading. Of note the strong gains in investment banking for 2006 are due to underwriting and private placements. M&A is actually down substantially in 2006 from 2005 for KBW. 

Based on first 6 months of the year, revenues for full year 2006 appear to be on track for $400-$425 million, a 34% increase. 

2005 - Employee compensation expense was 61%, slightly above the post-IPO target. Non-compensation expenses were 29%. Operating margins were 10%, net margins 6%. KBW earned $0.58 a share in 2005. On a $20 pricing, KBW would be trading 34 X's trailing earnings. As a point of comparison, EVR's earnings per share for 2005 were $0.63. 

2006 - Earnings will be much stronger due to the anticipated 34% revenue growth to $400-$425 for the year. Employee compensation expense of 58%, well within target. Non-compensation expenses on pace for 24% of revenues. Operating margins anticipated at 17%, net margins 10%. Anticipated earnings per share for 2006, $1.20 - $1.25. No matter how you slice it, KBW is having a great 2006 through the first 6 months. On a pricing of $20, KBW would be trading 16 X's 2006 earnings. 

Comparisons. At the top of the piece, we looked at two different types of investment banking IPOs. The M&A focused group has fared much better in the market and also carry a much hefty valuation. A quick look at GHL/EVR two M&A focused firms and COWN/TWPG, two underwriting focused firms. 

(GHL) - $1.95 billion market cap, trading 6 1/2 X's revenues and 16 X's book. Trading 27 X's 2006 earnings with an expected 10% revenue growth rate.

(EVR) - $1.05 billion market cap, trading 5 X's revenues and 6 X's book. Trading 37 X's 2006 earnings with an expected 30% revenue growth rate.

(COWN) - $217 million market cap, trading. 0.6X's revenues and below book value. Trading 14 X's 2006 earnings. with a 10% revenue growth rate.

(TWPG) - $420 million market cap, trading 1.5 X's revenues and 1.6 X's book value. Trading 19 X's 2006 earnings with a 10% revenue growth rate.

(KBW) - $608 million market cap on a $20 pricing. Trading 1.5 X's revenues and 1.75 book value. Trading 16 X's 2006 earnings with a 30%+ revenue growth rate. 

So should KBW be valued with the M&A focused firms or the others? I submit it is somewhere in between. KBW has a strong M&A business, historically accounting for 15% of annual revenues. Part of KBW also resemble TWPG. I would define KBW as resembling TWPG but focused on the financial services sector with a much stronger M&A component. KBW is also having a strong 2006, even though the M&A segment has lagged a bit this year. While I don't believe KBW should valued as dearly as EVR, there is definitely room for appreciation here from IPO range. I would value KBW somewhere between TWPG and EVR. 

Conclusion - Solid deal. KBW with their strong financial sector M&A operation (#3 in dollar value in 2005), resembles two of the strongest IPOs of recent years GHL/EVR. While I don't see this deal quite as strong as those two, they have built a solid niche for themselves in the investment banking sector. Recommending this deal strongly in range. 

Related Articles: Energy Investment Bank IPO: Highlights from Petrie Parkman's S-1 FilingEvercore Partners: Unlikely To Sustain Its Inflated Valuation -- Barron'

February 2011, Grubb & Ellis, "Downtown Starts Year Strong,"

In 2010, leasing velocity Downtown was just shy of 4 million square feet, and accounted for approximately 15 percent of the transaction volume in Manhattan. This year started with an

uptick in activity and heightened interest in the market. Oppenheimer Funds signed a 250,000-square-foot lease for 15 years at 2 World Financial Center, the Department of Youth & Community Development signed a three-year renewal for 95,000 square feet at 156 William Street and the State of NY Office of Temporary and Disability Assistance signed a 10-year lease for 90,000 square feet at 100 Church Street. In a common trend, Dow Jones withdrew their 200,000-square-foot sublease at 1 World Financial Center and is going to backfill the space.

Sublease space currently accounts for 16 percent of the available supply Downtown, the lowest ratio of all three markets. These signs of a stabilizing market contributed to the decrease in availability, which dropped 180 basis points from December 2010 to 14.2 percent. The potential redevelopment of 375 Pearl Street caused the building to be taken off the market for lease and fueled the decrease. The 1.1 million-square