A New Blueprint

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The problem, Leone and other observers say, is that, in the post--9/11 years, New York City's business community has steadily migrated to midtown Manhattan because of its easier access to the city's northern suburbs. "For the past 25 to 30 years, lower Manhattan has suffered under a handicap, compared to midtown, due to transportation," says William Wheaton, an economist who heads research at the Center for Real Estate at M.I.T. Sept. 11 only accelerated the northern shift by the law firms and investment banks that for decades had anchored Wall Street. Immediately after 9/11, many financial firms, including Citigroup and J.P. Morgan Chase, moved their employees to other locations around the city and to nearby Jersey City, N.J. Government officials persuaded Goldman Sachs to erect a building near ground zero, but at a cost of more than $1.6 billion in Liberty Bonds--low-cost, tax-exempt bonds issued by the city and state governments. The city and state provided an additional $150 million in tax breaks.

The original World Trade Center, completed in 1973, suffered under a similar real estate climate. "The argument back then was that downtown was losing to midtown," says Susan Fainstein, professor of urban planning at Columbia University. "They thought by building this impressive complex, it would make downtown a competitor. But so much space came up at once, and there just wasn't the demand to fill it." New York State even moved some offices there to help keep the rent rolls filled. The latest plans for ground zero call for the same 10 million sq. ft. of office space as the original World Trade Center, but the site's potential as a repeat target may repel business. "People don't want to work in a building with a bull's-eye on it," says Fainstein. "It doesn't matter if it's built like Fort Knox."

Even if he does find the tenants, Silverstein's methodical plan for development--one building at a time--has maddened his critics, convincing them that he simply does not have the cash to build out the site. The April agreement gives him about 60% of the $3.3 billion in public funding made available from Liberty Bonds to finish the site. He also has a $4.6 billion insurance settlement--it was ruled that the towers were hit by two separate attacks--although that is under appeal.

The biggest remaining question mark hanging over ground zero is the fate of its controversial centerpiece. The plan for the Freedom Tower has always been more emotional response than business proposition, born out of a desire to show the world that Americans would not be cowed by terrorists. "We have a public responsibility to rebuild ground zero, and it's incumbent on us to build a tower of freedom and democracy," says Charles Gargano, vice chairman for the Port Authority. "We need a signature building. It's not just a real estate project."