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News of World Financial Center leases continues
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Companies large and small are returning to the World Financial Center -- or setting up shop for the first time -- thanks to reasonable rental rates, generous government incentive programs, a commitment to contributing to the area's recovery, or simply the belief that downtown continues to be a great place to do business.
Leading the way are large multinational firms like OppenheimerFunds, which returned to the World Financial Center in October, bringing with it 550 employees. The company, a financial management services firm, had occupied temporary space in midtown since the 9/11 attacks destroyed its offices in Two World Trade Center.
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| OppenheimerFunds CEO Murphy announces firm's return |
"Since 9/11, one of the top priorities for OppenheimerFunds has been to find first-class space at a reasonable cost which will be conducive to our business needs," said John Murphy, the company's chairman, president, and CEO, at the October 3 announcement of the firm's relocation. "Two World Financial Center not only provides us with tremendous space, it allows OppenheimerFunds to be an active participant in the rebuilding of Lower Manhattan," he said. "We are very excited to come home."
The World Trade Center Job Creation and Retention Program (JCRP), a city-state initiative established to encourage businesses with 200 or more employees to remain in, return or relocate to Lower Manhattan, made the World Financial Center location an economically attractive one for OppenheimerFunds. The company will receive a $4.06 million JCRP grant in exchange for committing to remain downtown for at least ten years.
To date, 72 large firms -- employing about 60,000 people and expected to create as many as 6,000 new jobs -- have taken advantage of the JCRP. Other businesses that have recently announced their plans to return include the lawfirm of Cadwalader, Wickersham & Taft LLP and State Street Bank.
Cadwalader, the city's oldest continuous law firm, announced in September that it plans to move its offices and 800-person staff to One World Financial Center in the first quarter of 2005. And State Street announced in November that it will relocate 225 employees from various midtown locations to new offices in Two World Financial Center. The relocation is scheduled for February 2004, and the bank also plans to create up to 1,000 new jobs in the new downtown space over the next five years.
"We think the program has been very successful and is continuing to work," said Matt Maguire, senior vice president for the city's Economic Development Corporation, which administers the incentive program jointly with the state. "In fact, over the last several months we have seen a lot more interest from relocating companies," he added, intimating that additional new lease deals may be announced in coming weeks.
Meanwhile, the decision of large firms to head downtown has both encouraged retailers to follow suit and bolstered the business of others who have already been back for some time.
"In terms of retail tenants, there's a lot of interest in being back downtown," said Ed Hogan, vice president of leasing for Brookfield Properties, which manages both the four buildings that comprise the World Financial Center and the 2.2-million-square-foot office building at One Liberty Plaza.
Hogan has recently negotiated several deals with retailers who see promise both in the present and future Lower Manhattan, including Eckerd Drugs, Banana Republic, and Joseph Cione Salons.
"Downtown is the most densely populated square mile of any business district in the nation, and undoubtedly the most underserved retail location in the nation," said Hogan. "Companies know that the business is here," he said. "There are 280,000 people working here, the residential population is growing -- and businesses recognize that. They want to be down here."
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| Eckerd opened a new downtown location in October |
Eckerd, one of the nation's largest drug-store chains, opened its doors at the Vesey Street entrance to the World Financial Center at the beginning of October, giving downtown workers, residents, and visitors access to a greater selection of office supplies, health and beauty products, greeting cards, and more. The store also includes an on-site pharmacy.
Clothing chain Banana Republic is also scheduled to open a store at the World Financial Center, in February 2004. Noting that the company seldom discusses the factors that contribute to its choice of locations, spokeswoman Jordan Benjamin said simply, "We just thought the location was a good opportunity to reach and serve our clients."
Joining the national retail chains are smaller retail businesses as well, some returning to locations near those they occupied at the time of the 9/11 attack.
Joseph Cione Jr. of Joseph Cione Salon signed a lease this week to open a hair salon and spa, also in the World Financial Center, replacing one that stood at the corner of Vesey and West Streets and was demolished in the days following the 9/11 attack. The salon, which will be located in Two World Financial Center, is scheduled to open in April 2004.
Cione is confident that a return to Lower Manhattan will bring good business. For starters, he expects to win back his old clientele -- employees at downtown firms like Merrill Lynch and American Express who used to come for facials, hair appointments, or massages after work or on their lunch break. "I still have a reputation there," he said. "People still call me asking when I'm coming back."
But more than that, Cione is optimistic about what the future will hold, especially once the rebuilding of the World Trade Center is completed. "Just think of what you're looking at ten years from now… why not be a part of it?"
Serving as an added incentive for Cione and other small business owners to return or relocate to Lower Manhattan is a second city-state initiative called the Small Firm Attraction and Retention Grant (SFARG). Like the JCRP but targeting businesses with fewer than 200 employees, the SFARG provides cash grants to businesses that make at least a five-year commitment to remain downtown.
"We hope that a lot of smaller firms will take advantage of this over the next year," says the EDC's Maguire of the SFARG program, which will be in effect until December 31, 2004. "There's a real buying opportunity downtown right now -- a chance to get in on the ground floor of the recovery," he said. To date, almost 1,300 small companies have signed leases through the SFARG program, employing 20,000 people and qualifying for $85 million in grants.
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| Donald Sacks restaurant looks forward to increased business |
Businesses also report attractive lease agreements have wooed them back. "The building owners made us a deal, and we came back," said Mario Porracchio, general manager of Donald Sacks restaurant on the ground floor of Three World Financial Center. "Brookfield was excellent. They signed a new five-year lease based on a percentage of rent and they are working with us as far as bills and things that we are behind on," he said.
Donald Sacks reopened one year after the 9/11 attack, in September 2002. Business has not been what it once was -- "about 45 percent," said Porracchio -- forcing the restaurant to reduce its staff and cut costs wherever possible. "But I'm confident that business will get better," he added.
Of announcements like the return of large firms like OppenheimerFunds, Porracchio had this to say: "Unbelievable. Excellent. Great news. Now let's see more."
To learn how your large firm can qualify for the World Trade Center Job Creation and Retention Program, please click here.
To learn how your small firm can qualify for a Small Firm Attraction and Retention Grant, please click here.
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