Wednesday, June 08, 2011

The Rebuilding of Ground Zero, Part 140

Despite the Port Authority's possible toll and PATH fare hikes to cover rising construction costs for Ground Zero reconstruction, the work continues on both the Freedom Tower (1WTC) and 4WTC and workers are moving to complete the 9/11 Memorial in time for the 10th anniversary as the museum and other components are being prepared.

Now, the New York Times is reporting that the major financial firm UBS may be moving back to New York City 15 years after moving its headquarters to Stamford, Connecticut. The company has a case of buyers remorse as it has found it can't recruit and retain talent, which would much prefer to live in New York City.
As a result, UBS is seriously considering a reverse migration that would bring its investment banking division and up to 2,000 bankers and traders back to Wall Street and a new skyscraper at the rebuilt World Trade Center, according to real estate executives and city officials.

“They just can’t hire the bankers and traders they need,” said one landlord who has spoken with UBS but requested anonymity so as not to alienate a potential tenant.

The bank is also looking at several Midtown locations, and Connecticut is sure to wage a fierce battle to keep UBS in Stamford, where it is the largest private employer and the biggest taxpayer.

A final decision is perhaps months away, and any move would not take place until 2015.

But over the last week, UBS has engaged in negotiations with the developer Larry Silverstein over the terms of a potential financial deal at 3 World Trade Center, an 80-story office tower that he plans to build at 175 Greenwich Street. The return of UBS would be a boon to New York, which in past decades often suffered from corporate defections that were fueled by a sense that computers and telecommunications had made a Manhattan location more of a luxury than a necessity.

The move would be the latest sign that New York has regained its allure as a caldron for the young and creative. Six months ago, Google paid nearly $2 billion for a large building just north of the meatpacking district, in the same Manhattan neighborhood where many of its employees live.
Considering that Silverstein wouldn't be able to secure the financing for 3WTC without having tenants lined up, this is a significant piece of news. It would mean that another component of the Ground Zero rebuilding could finally get underway - and without the need for government agencies filling up the space in lieu of private companies who would command higher rents (even as those rents are subsidized due to various incentives enacted after the attacks to attract businesses back to Lower Manhattan).

Unfortunately, this would be a big blow for Connecticut, where there's already at 25% vacancy rate in Stamford. Expect the state and city to try and throw more incentives at UBS to stay, but with UBS eying a return to Manhattan to be closer to clients (aka Wall Street), those Connecticut incentives would have to be serious coin to keep them there. Note too that UBS would be able to work with Silverstein to tailor the facilities at 3WTC to their needs (and the design already calls for a major trading floor space).

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