The terrorists who attacked the World Trade Center on 9-11-01 were striking a blow—a devastating one they hoped--at what they saw as the heart of capitalism and free markets in the United States. But in the aftermath of the attack, what the rest of the world saw was a wounded but game city that quickly pulled itself up off the mat--from the rapid return of the New York Stock Exchange, located just a few blocks from Ground Zero, to the speedy work of putting the city’s essential systems back on line and getting companies back to business.
But even as New York rebounded, a strange, parallel storyline emerged in the planning to rebuild on Ground Zero. Less inspiring, the themes of that story were resignation, a lack of faith in free markets, and a perplexing willingness to capitulate to those who would destroy the institutions that are at the heart of our democratic capitalism. There are many players in this parallel storyline, from urban planners who saw the wholesale destruction as an unprecedented opportunity to shape 16 acres of prime city real estate into their version of the 21st century city, which didn’t include a return of commerce, to advocacy groups who viewed the site (and the promise of billions of dollars in federal aid) as an opportunity to advance agendas for everything from subsidized housing to a kind of super urban arts community.
Unfortunately, too many political and business leaders lent credibility to this parallel story line. “America’s Mayor,” Rudy Giuliani, whose own actions had been so heroic on 9-11, seemed so consumed by the grief that, quoting from Lincoln’s Gettysburg address, he called for the entire site to become “hallowed ground” free from commerce. His successor, the businessman mayor Michael Bloomberg, displaying a pessimism about the future of the city’s economy that was astonishing in an elected official, argued that Lower Manhattan’s days as a commercial venue were numbered and the site should be given over to residential building. John Whitehead, the respected former chairman of Goldman Sachs tapped by New York Gov. George Pataki to head the rebuilding effort, seemed seduced by the far-fetched schemes of planners and wound up advocating that the site become the center of a tourism district revolving around 9-11--a proposal that smacked of turning Ground Zero into a Disneyland of Death.
All of these voices, and others, have conspired to give us what we have now, which is a site where, approaching seven years after the attack, all one can see for the most part are a bunch of cranes and other machinery moving around dirt. On Monday, the latest report on “progress” at Ground Zero (and one can only use that word in parentheses when referring to the WTC site) noted that virtually all of the work there is behind schedule and billions of dollars over budget.
The mismanagement of the site has produced a design for a new transit station that is so expensive and impractical to build that even with a $2 billion budget, it can’t be constructed, and probably never will. Meanwhile, the so-called “iconic” Freedom Tower, conceived with no practical commercial purpose in mind so that it will be occupied mostly by government agencies, is a year behind schedule. The construction of the 9-11 memorial dubbed Reflecting Absence--an elaborate but vapid design that commemorates nothing except the absence of those who died that day (with barely even a special nod to the police and fire officers who gave their lives to save others)--is also behind schedule after cost estimates doubled beyond the original $500 million projections. It’s now nearly certain that the memorial, reengineered to be on budget, will not open by the 10th anniversary of the attacks, while memorials at the Pentagon and in Shanksville, Pa., are already completed. One component of the Ground Zero memorial, an accompanying museum dubbed the International Freedom Center, won’t ever open. The redevelopment team shelved it because its content was so controversial.
At this point, the only commerce taking place on the former site of the World Trade Center is in the rebuilt 7 World Trade, which sat to the north of the twin towers and also collapsed that day. Owned by the developer Larry Silverstein, 7 World Trade was never part of the original 16-acre Ground Zero site controlled by the Lower Manhattan Development Corp., and so Silverstein was free to move quickly to rebuild without government intrusion. Shovels hit the ground in May of 2002, and the new, 52-story tower opened in spring of 2006. It boasts more than 1 million square feet of leased space to blue-chip tenants like ABN AMRO, Ameriprise Financial, and Moody's Corp.
Silverstein should be something of a champion of Ground Zero. Through all of the talk about abandoning commerce at the site and all of the political infighting and pie-in-the-sky planning, he was crucial in fighting to ensure that the 16-acre site didn’t simply become parkland, or housing. A year ago he told me, "The financial center's locomotive was the World Trade Center, and for the sustenance of the city and the region, we need to get those jobs back.” In addition to 7 World Trade, Silverstein has the right to develop three other towers on Ground Zero, although he’s had to wait for the agency controlling redevelopment to design a site plan and do the foundation work for the towers.
For his efforts, Silverstein hasn’t been celebrated, but demonized. The Vice Chairman of the Port Authority of New York and New Jersey, which controls the site, called him “greedy” for his tough negotiations with potential tenants of 7 World Trade, which dragged out the announcement of some leases. Mayor Bloomberg accused him of asking too much to lease up 7 World Trade—as if our politicians should be setting office leasing rates. One of the city’s tabloids, the Daily News, responded to Silverstein’s defense of himself with the headline Butt Out, Larry.
Yet in the end, Silverstein has given us the only real progress at Ground Zero. And he’s constructing the real memorial down there, the return of the marketplace on the site where the terrorists eradicated it. To achieve that, it isn’t Silverstein or the free market that should be butting out.
This article is courtesy of RealClearMarkets.com
Steven Malanga is an editor for RealClearMarkets and a senior fellow at the Manhattan Institute