Rebuilding may alter Wall Street identity forever

NEW YORK -- A year later and the World Financial Center is a frontier town. Defiant signs proclaim the pioneer spirit: "Johnney's Seafood is Back. C'mon in.''

You see it in the faces. Lunch break feels like the first day back at school after a long summer. Friendships rekindle with broad smiles.

Across West Street, what had been a smoldering wreck of unfathomable destruction is now an orderly construction site -- the hulking cranes of winter are gone, tangles of smoking steel replaced by a clean hole in the ground.

In January, you could wander into the Financial Center complex and barely find a soul. Now the Starbucks is packed, and if you want to sit outside at SouthWest NY and watch boats bob in the marina, you will have to wait for a table.

"Every time a new restaurant or store opens, or one of our old hangouts comes back, it turns into a spontaneous celebration,'' said Steve Carl, senior vice president for technology operations at American Express Co., which has moved about 3,000 of a planned 4,000 employees back to the Financial Center.

Along with Merrill Lynch & Co. and returning Wall Street Journal staffers, the American Express employees breathed life back into the area.

"Every time the elevator door opens I run into someone who tells me they are overwhelmed by a sense of being back home,'' Carl said.

Big guns have moved

But not everyone has come home.

And once the current era of good feelings recedes, Carl and others will confront the new reality: Wall Street, and the neighborhoods surrounding it, is no longer the unquestioned center of global finance. And depending on how the rebuilding process goes, it may never be again.

Whether this is a bad thing is open to debate. In many instances, Wall Street's big guns (Morgan Stanley and Lehman Brothers Inc., among others) have simply packed up and moved to glittering Midtown towers. Others, including Bank of New York Co., are moving some employees to Brooklyn and other boroughs, continuing a migration that began well before terrorists toppled the World Trade Center.

Many city advocates praise these moves, saying as long as jobs and tax receipts stay in the city, all is well. And despite early fears of a post-Sept. 11 exodus to New Jersey, numbers so far indicate that 70 percent of the office space destroyed on Sept. 11 that has migrated elsewhere has gone to Midtown, while just 9 percent has crossed the Hudson.

Still, the list of blue-chip Wall Street firms no longer on (or near) Wall Street is long and getting longer: Lehman Brothers, Credit Suisse First Boston Corp., Morgan Stanley, Bank of America Corp. and CIBC, to name just a few. According to some estimates, downtown has lost 100,000 of the 400,000 jobs it had before Sept. 11, most of which were in the financial services and insurance industries.

Those who advocate for trying to keep as many big financial firms downtown as possible contend that if the firms continue to disperse, another city, perhaps Singapore or Brussels, could emerge as the world's biggest financial marketplace, which would damage both New York and the nation.

Second trading floor

Meanwhile, even some of the big firms still downtown have quietly moved some employees elsewhere or are planning to soon. Goldman Sachs Group Inc., a pillar of Wall Street since 1869, still has around 10,000 employees at 85 Broad St. but plans to move a significant number (the firm wouldn't say how many) to a Jersey City tower in 2004. New York Stock Exchange Inc., the axis around which the financial district revolves, plans a second trading floor outside Lower Manhattan.

According to M. Myers Mermel, founder and CEO of TenantWise Inc., which monitors New York commercial real estate, only 25 percent of companies with 200 or more employees downtown have made long-term commitments to stay.

On the bright side, Merrill Lynch, among the first back into the World Financial Center, is committed to the complex at least through 2012. The firm has moved 6,700 employees back in, nearly as many as were there before the attacks. Firm officials say the slightly lower total reflects bear-market layoffs rather than a decision to move employees to alternative locations. American Express is also committed to downtown for at least 10 years.

The fate of London

Nonetheless, with Lower Manhattan vacancy rates at around 15 percent and an increasing number of big firms controlled by foreign conglomerates with presumably little allegiance to New York or even the United States (Credit Suisse First Boston, Deutsche Bank AG and UBS Warburg, for example), some worry that Gotham could suffer the same fate as London, once assumed to be global capital's permanent home.

For Wall Street to avoid that fate, urban planners, academics and real estate brokers say the city, state and federal governments must focus on three things: transportation, transportation and transportation.

More broadly, planners point to a need to rethink street patterns by opening up blocks once cut off by the Trade Center while providing moving sidewalks to connect one side of busy West Street to the rest of the financial district.