Even before the World Trade Center attack, New York City, as well as the rest of the country, had been undergoing an economic showdown. This tragedy succeeded in exacerbating the slowdown. It also brought into account the vulnerabilities of the mega-skyscraper.
However, New York City is 300 years old. During that time, this city achieved and maintained its status as the foremost metropolis in the United States, gradually evolving into its present position as the Empire City of the World. In that 300 years, New Yorkers have experienced horrendous fires, which, at least twice, practically wiped out the entire community, horrible epidemics that had just about the same consequence, race riots, and several devastating depressions. In the American Revolution, the entire city was a battlefield for a cause that was considered lost at the time.
A century of triumph
In the past century, as New York became the principal retail and financial capital of the world, we have survived the Great Depression of 1929, the First and Second World Wars, a couple of other wars, and the financial crises of the early 1970s and 1980s. We have met each reversal and hardship and survived — not just survived, but returned to eminence at an even higher economic rate.
Whatever was destroyed will be rebuilt, in one form or another, which will create enormous economic activity in itself.
Although immediately after the attack, the city exhibited a marked slowdown, part of which was in reverence to the great loss of life, signs of recovery are already evident.
My own experience, following the disaster was that of just about everyone else's: that of disbelief, horror and sorrow. I have had a television in my office for five years. It had never been used. It was turned on and stayed on day after day. My staff and I (my little family) huddled around it, our main contact to what was happening. Fortunately, none of us lost relatives or close friends.
I felt like the housewife and her soap operas — only, as always, truth overwhelms fiction.
Back to business
Immediately after that, we closed two restaurant leases in the Downtown area within steps of the World Trade Center. This was indicative to me of the great speed at which this vibrant area would recover.
The financial markets reopened, pointing out the tremendous need for downtown services, both retail and general. And people living downtown have gradually returned to their homes, further underscoring a need for every type of service.
Although our daily lives and the world as we knew it have changed, history will bear me out as I maintain that New Yorkers have always overcome all obstacles.
As we view the short term/long term needs and goals of the retail market, we believe that the city and surrounding areas will return to normalcy. The economic activity will pick up materially as it does at the end of a downturn. The major chains and the smaller entrepreneurs will return to New York with enthusiasm.
Rebuilding already
At the time of the disaster, Westfield Shoppingtown was evaluating the retailers already in the mall at the World Trade Center with the idea of expanding onto the Plaza for more retail space. It was rumored that they had contacted several luxury tenants. The area surrounding the Center was fully leased. There was space available east of Broadway — Wall, Water, Broad Streets, and lower Broadway, which now will be the focus of new interest for future retail.
There is already talk of replacing the mall at the base of the Towers and thereby incorporating the same successful retail environment that existed, i.e. approximately 75 stores (approximately 475,000 sq. ft.) The shopping venue was one of the most successful in the country, where sales for each shop ranged from $900 to $1,000 per sq. ft. That's incredible!
Many displaced retailers are seeking new locations throughout the city for immediate occupancy, in order to capture the Christmas season, for sites in the same area (financial district), while others are focusing on Midtown, east and west. The idea is to replace sales, not geography.
Strong demand
Demand for stores has not abated, neither for locations with possibilities for new retailers from across the country nor across the oceans nor from our own backyard. This is a city of shopaholics. The demand for new shops comes from every industry: apparel, home furnishings, beauty, and on and on — from well-known brands to the local mom and pops — ensuring Manhattan's future as the most exciting shopping and entertainment experience in the world.
None of the retailers that we have met seem to be shy of locating near famous landmarks that could be vulnerable to attack, such as The Empire State Building, the UN, Grand Central Station, etc. For most companies, it's business as usual with a focus to accommodate the holiday season. Toy and book stores are already enjoying good sales.
During the original shock, stores such as the three Bs (Bergdorf's, Barneys and Bloomingdales) lowered their shades. Customers in sorrow and confusion bought only necessities. Retail didn't aggressively pursue business, out of respect. Now, that is past. Fall is here. Our mayor and our governor have urged us to return to normal, to go shopping, to go out dinner, to go to the movies and the theatre.
The WTC itself is still being cleaned up and will be for months. However, the buildings around the area are accessible and business is up and running. To compensate for much needed store space, several properties are in the works creating new space for office, residential, and retail. The on-going consolidation of many industries has also resulted in increased storefront space.
No doubt about it, New York will go on and, as before, emerge from this crisis even bigger and better.
Faith Hope Consolo is Vice Chairman of Garrick-Aug Worldwide, Ltd.