IN a stroke, the news of Moody’s move next year to 7 World Trade Center means the tower is well on its way to filling up.
The deal vindicates developer Larry Silverstein – and leaves Mayor Bloomberg, The New York Times and the Daily News with serious egg on their faces.
This, after all, is a building that supposedly couldn’t be leased. Now the Moody’s lease, to be inked within days, will bring it to 50 percent occupancy – with more leases likely to be signed in coming weeks. So much for the notion that 7 WTC was a speculative folly doomed to stand indefinitely empty.
While the building was going up and since it opened last winter, detractors made a stink over 7 WTC’s lack of tenants. They preposterously depicted its predictable short-term vacancy as irreversible failure – and cited it to justify stalling work on the Freedom Tower and other Ground Zero office buildings.
Too much empty space on the market already! some said. Too close to the attack site! Too high a rent for Downtown!
In fact, speculative office towers typically need a year or two to draw tenants – several in the Times Square area stood empty for longer than that. But, for reasons of their own, the critics dreaded the prospect of large-scale commercial redevelopment Downtown. So they insisted, without the least evidence, that big companies wouldn’t want to move into new buildings there.
The success of 7 WTC guts their argument. They need to be called on it, as their antics nearly derailed Silverstein’s quest for tenants and stank up rational discussion about Lower Manhattan.
The real story was that a beautiful new skyscraper bearing the World Trade Center name was just what Downtown needed; the area doesn’t have enough first-class space.
The real story was that adding 1.7 million square feet did not depress the Downtown market – in fact, the vacancy rate has fallen.
The real story was that Silverstein, aided by subsidies passed on to tenants, was able to lure companies despite naysaying by politicians and the press.
As I’ve written many times in these pages, no major new office building in Manhattan ever stands vacant for long, and 7 WTC’s state-of-the-art design and rent lower than in Midtown were bound to draw tenants.
Yet Mayor Bloomberg blatantly set out to sabotage Silverstein’s leasing efforts. While Silverstein was in talks with prospective tenants, Bloomberg publicly blasted him for asking $50 a square foot in rent and said he should cut the price to $35 – the cost for inferior buildings 25 years and more older.
Why would the mayor try to undermine Silverstein? Very likely he sees a Downtown commercial boom as a roadblock to his own plan to develop the Far West Side – that is, a thriving 7 WTC might well cost him the chance of being remembered as a visionary.
Certainly, Bloomberg has belittled Silverstein at every turn, implying that the developer – not the state and city governments, which have bungled Downtown reconstruction from Day One – was responsible for all of the area’s ills, including Ground Zero’s empty pit.
Silverstein ended up getting his price at 7 WTC. But the mayor’s rantings emboldened media outlets already hostile to Silverstein – reflected, for example, in a misleading Times story in July headlined, “Developer pulls out of Ground Zero deal despite officials’ efforts.”
That was about Silverstein’s decision to drop negotiations with a Chinese company over space in 7 WTC. Yet he’d changed his mind, not out of obstinacy, but because the company failed to deliver a letter of credit and because others were willing to pay more.
That story was but one of dozens in the Times to denigrate 7 WTC. The paper endlessly pushed the line that companies were shunning it. A typical piece on July 26, 2005, in reporting the first small lease, snarked that Silverstein had been “trying for months” to land a tenant; that the lease was for “just 1 percent” of the tower; it “does not guarantee that the $1.3 billion building will have a flourishing future;” and that Silverstein’s price of $50-plus per square foot is “seen as an impediment.”
But then, the Times opposed large-scale commercial redevelopment Downtown even before 9/11’s tragic dust had settled. The paper embraces an elitist, utopian vision of a 24/7 wonderland of apartments, parks and cultural uses for the area – at the expense of office replenishment.
The Daily News got into the act too; its editorial page warned Silverstein not even to try rebuilding the towers. Of course, the News’ owner is real-estate mogul Mort Zuckerman. One-third of all his Manhattan leases will expire during the years when new buildings are expected to rise at Ground Zero – and competition from newly minted towers is clearly not to his liking.
He’s also bitter because Silverstein whipped Zuckerman’s Boston Properties and its partner Brookfield when they feverishly bid on the World Trade Center in the winter and spring of 2001.
Now, of course, 7 WTC is on its way to being spectacularly successful. It’s both accurate and easy to say that Silverstein is having the last laugh.
But how much better off Downtown might be today if his critics hadn’t done so much to poison its mood.