May 18th - May 22nd, 2009

PATH Emergency Drill Successful

May 18 – Sunday’s emergency drill Operation Safe PATH 2009, simulating an explosion, in the PATH tunnel at the WTC site went off as planned. PATH was shutdown for most of the morning, smoke machines were activated and the tunnel was filled with smoke and 150 volunteers who were ‘injured’. About 800 emergency workers spent two hours rescuing the victims. Officials said the exercise was needed in light of the unannounced flyover three weeks ago and the fact that 250,000 commuters use PATH every day.

Construction Employment Dismal

May 18 – The latest report about construction jobs is dismal. The New York Building Congress says nearly 20,000 construction jobs disappeared between August of 2008 and March of 2009. GlobeSt.com says part of the drop can be attributed to the seasonal swings in the industry and 1,000 new jobs were created between January and March. The city’s construction industry normally employs about 123,000 people, second only to health care.

NYC Notify Going Citywide

May 19 – Mayor Bloomberg announced the NYC notify system, which began as a pilot program in Lower Manhattan and 3 other neighborhoods, after the 2007 Deutsche bank fire, is now going citywide. Starting May 28^th, residents can sign up for alerts by email, text or voice messaging by registering with 311. Since the program began, 13,000 people have received real time emergency updates on 70 different incidents including a crane collapse and tornado warning, according to WNYC radio.

Atlantic Yards Project Moves Forward

May 19 – It looks like the Atlantic Yards project is moving forward. A New York Appeal Court said the use of eminent domain to take private property to build the project does not violate the state’s constitution. The Empire State Development Corporation wants to condemn nine properties and transfer ownership to the developer, Forest City Ratner (FCR), according to GlobeSt.com.  FCR said it hopes to break ground on the mega project later this year. If that happens, the New Jersey Nets could be playing in their new arena in the 2011 season. The plantiffs vow to appeal to the state’s highest court.

WTC Summit Scheduled for Thursday

May 20 – The Wall Street Journal is reporting, a day before the WTC summit at the Mayor’s office, that Larry Silverstein has the upper hand in the negotiations because he could take the Port Authority to court over missed deadlines at the site. The Port Authority has rejected Silverstein’s call to build Towers 2 and 4, saying it is financially irresponsible and politically untenable. Seven of the city’s largest civic groups issued a statement, urging Governors Paterson and Corzine not to use public money to subsidize construction at the WTC site. The New York Times claims Mayor Bloomberg is working to lower expectations that there will be a quick resolution to the issue at the Summit. Meanwhile, The New York Post published the latest renderings of what a scaled-down WTC would look like. The designs show retail shops replacing two of the site’s towers, whose podiums would rise six stories and create 600,000 square feet of shopping space.

Vacancy Rates Steady In Lower Manhattan

May 20 – Class A vacancy in Manhattan has reached 11.3%, up from 10.8% in March, making it the highest vacancy rate since September of 1997, according to the latest figures from Colliers ABR reported in Real Estate Weekly.  Downtown, however, has seen its vacancy rate improve for the second consecutive month to about 7.4%.  The report was cautious; it pointed out the vacancy rate in Lower Manhattan could soar to around 10% when Citigroup and Goldman Sachs dump a large amount of space over the next few months.

Real Estate Market Favors Tenants

May 20 – It’s not a done deal for the Claremont School to move into 100 Church Street. Real Estate Weekly is reporting the school is now considering other locations. Just a few months ago, the deal seemed solid. The paper says there are rumors that the Claremont School may wind up in one of the AIG buildings currently being auctioned off. Some real estate executives speculate the School has been swamped with other enticing offers as building owners compete with each other amid tough times.

Negotiations Continue Between Developers and Unions

May 20 – An agreement to cut costs on construction projects in the city fell apart again- the second time in the past few weeks that a planned announcement by the Mayor had to be shelved. Real Estate Weekly reports developers continue to say the concessions offered by the unions will do little to bring down the cost of building. Developers say they need 20 to 25 percent savings. The report says both sides are still negotiating in the hopes of reaching an agreement.

WTC Transit Hub Budget Rises

May 21 – Building the WTC Transit Hub may cost as much as $4.3 billion, $1.1 billion more than the estimate from the Port Authority eight months ago. The Daily News says a risk review report from the Federal Transit Administration (FTA) in December says there’s a 50-50 chance the Hub will cost $3.8 billion and there’s no funding for the extra costs. The report also says the Santiago Calatrava designed building won’t open until 2014.  The Port Authority disputed the story saying the Hub is on schedule and on budget.

WTC Parties Agree to Meet Again

May 22- The only outcome of the WTC Summit at Gracie Mansion is that all the parties agreed to meet again on June 11. All involved agreed to appoint deputies to negotiate a plan; those representatives set their first meeting for today. All of the parties agreed to a news blackout; Larry Silverstein said both sides are committed to moving forward to try to accommodate the others’ position. Port Authority Executive Director Chris Ward warned he doesn’t expect a deal to be hammered out by next month’s sit down. 

Silverstein Predicts Increased Rents at WTC

May 22- Larry Silverstein released a report which predicts the new buildings on the WTC site will command rents that are 79% above the current average downtown. The report by CB Richard Ellis (CBRE) does not pinpoint how long it will take to fully rent the buildings. The CBRE says rents in Tower 4 could go for $77 to $93 a square foot in 2013; Tower 2 rents could be in the range of $91 to $107. The study also predicts vacancy rates will peak between 14%and 17% in 2011 and the market will begin to improve later that year.

Interim MTA Executive Named

May 22 – The President of the Long Island Railroad, Helena Williams, will serve as interim head of the MTA, until Governor Paterson can appoint a successor to Elliot Sander.  Williams, who’s 53, has been head of the LIRR since 2007. The MTA Board is expected to approve her nomination at its May 27^th meeting.