Volume 22, Number 15 | The Newspaper of Lower Manhattan | Aug. 21 - 27, 2009

Mixed Use

By Patrick Hedlund

Schools help the market
Lower Manhattan experienced the most active month for leasing in more than a year as deals were inked for nearly half a million square feet of space Downtown in July.

According to a monthly report CB Richard Ellis, tenants took 400,000 square feet in Lower Manhattan last month, coming in just under the market’s five-year monthly average of 420,000 square feet despite the downturn.

The robust activity was led by Claremont Preparatory School’s signing for 152,000 square feet at 25 Broadway, one of only two transactions above 100,000 square feet completed Downtown this year. Other large deals included Broadcast Music’s signing for more than 57,000 square feet at 7 World Trade Center, the School Construction Authority’s expansion of nearly 47,000 square feet at 26 Broadway (likely for a new Greenwich Village Middle School), and a nearly 38,000-square-foot expansion for John Thomas Financial at 14 Wall St.

Downtown’s availability rate, the lowest of Manhattan’s three markets, came in at 11 percent in July, a 0.1 percent drop from the previous month. Downtown’s average asking rent, however, dipped by $0.72 to $41.19 per square foot.

Signings in the Financial District accounted for 330,000 square feet of the total, besting its monthly average of 290,000 by 14 percent.

Another office blow?
Downtown is once again facing the potential loss of a major office tenant — this time to the other side of the Hudson.

According to the New York Post, the Depository Trust & Clearing Corp. is considering leaving Lower Manhattan for New Jersey to accommodate its infrastructure needs when the company’s lease comes up in 2012. The Trust currently occupies 750,000 square feet of space at 55 Water St., which represents Manhattan’s largest office tower with nearly 4 million total square feet.

Because of the company’s sophisticated electronic requirements, D.T.C.C. will need to make a decision well before its lease is up. The Post reported that Jersey landlords are wooing the company with various state incentives, but that N.Y.C. officials are also in talks with the corporation.

“We take the potential loss of any New York City employer seriously, and we’re actively engaged with the Depository Trust & Clearing Corp.,” David Lombino, a spokesperson for the city’s Economic Development Corp., told the newspaper. “In the long term, investing taxpayer money to keep the city a place where businesses want to be, rather than simply matching what other cities are willing to give away, will generate the greatest return for our taxpayers.”

Downtown has already suffered from planned departures or reductions in space by major firms like Merrill Lynch, Goldman Sachs and the F.D.I.C.

‘Smart’ development
A bill requiring city agencies to assess specific infrastructure needs related to rezoning plans in order to prepare neighborhoods facing major redevelopment will be introduced to the City Council this week.

The proposed measure, authored by Councilmember David Yassky, would require city agencies like the Departments of Education, Environmental Protection, Sanitation and Transportation, as well as the Police and Fire Departments, to conduct impact assessments accompanying major rezoning actions. Under the legislation, called the “Smart Development Bill,” the agencies would establish relevant and specific minimum neighborhood service standards to measure the impact of rezonings on community services.

“When this bill is enacted, neighborhoods will be prepared with the needed schools, subway and bus lines, trash-disposal capabilities, fire and police needs, among others, that too often have been ignored during the development process,” said Yassky, who is running for city comptroller.

The assessments would identify current service levels in the respective area, state potential changes related to the proposed development, and include plans to implement recommended improvements in a timely manner to allow sufficient time for the city to provide the appropriate resources.

“For far too long, many communities have undergone significant rezoning and development without a correlating expansion in vital city services,” said Comptroller William Thompson, Jr., a candidate for mayor. “This legislation will go a long way to protect our neighborhoods from rapid development by providing a necessary level of review during the rezoning process.”

The current uniform land use review process, or ULURP, only requires the City Council, affected community board or boards and Department of City Planning to assess major development proposals. Under the bill, the city agencies would review projects’ applications and environmental impact statements, and submit a report to City Planning outlining their impacts, as well as necessary changes in services or capital spending. These assessments would then accompany the rezoning application and E.I.S. as they move through the approval process.

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