Fallout Continues From Wall Street Toxic Paper Meltdown

In addition to all the other worries about the toxic paper (the subprime mortgage mess and all the secondary paper that is virtually worthless) and its effect on the markets that have resulted in the government considering a $700 billion bailout of the financial services sector, there's a concern that the Wall Street mess will affect the rebuilding efforts at Ground Zero.

"A tidal wave is coming - and we're going to be the first ones hit," said City Councilman Alan Gerson, who represents the district.

The No. 1 challenge: filling 10.1 million square feet of commercial space in five skyscrapers, much of it designed specifically for financial giants that no longer exist or are struggling to survive.

Hanging in the balance are the iconic, 1,776-foot Freedom Tower to the north, a replacement for the toxic Deutsche Bank tower to the south and three enormous towers on Church St. built by developer Larry Silverstein, including one that will be taller than the Empire State Building.

The towers are set to rise almost simultaneously on the site during the next five years - despite a credit crunch, the liquidation of Lehman Brothers, the demise of an independent Merrill Lynch, the bailout of AIG and cloudy prospects for both Morgan Stanley and Goldman Sachs.

Some worry about the return of the "hollow high-risers" - a phrase first used to describe the original World Trade Center when it opened in 1973 with no private-sector tenants.

"The Freedom Tower very possibly will turn out to be a white elephant," said George Marlin, an investment banker and former executive director of the Port Authority.

One of the things that the 9/11 hijackers had hoped for was to create such turmoil on Wall Street that it would cause a collapse of the US financial markets. The current crisis may have the effect of perpetuating the hole in the ground at Ground Zero because there will be a lack of companies who will want or need office space in the towers contemplated for Ground Zero.