Remarks by Speaker Sheldon Silver

Association for a Better New York Breakfast

The Essex House, Grand Salon, 160 Central Park South, Manhattan
Friday, February 11, 2005

Thank you, Bill (Rudin) for that kind and generous introduction, and thank you, ladies and gentlemen, for that warm reception.

Bill Rudin. Members and Friends of the Association for a Better New York.

Good morning, and thank you for the invitation.

Knowing the history of these gatherings, may I say what an honor it is to have my name added to the list of featured speakers who have addressed an ABNY "power" breakfast.

I must tell you that it is gratifying to be introduced by Bill Rudin: a truly great New Yorker from a truly great New York family. It has been my privilege to know Bill, his late father, Lew, and his Uncle Jack.

Theirs is a legacy of doing, of giving back, of bridging the differences between the great city New York is and the greater city New York can be.

In my meetings with business and academic leaders across this State, I can’t tell you how many times I’ve suggested Silicon Alley as an example of how to begin building a prosperous 21st Century economy.

Bill Rudin is the "father" of Silicon Alley.

It was and is his breadth of vision, his manner of leadership, and his brand of commitment that makes New York the powerful forge where the world’s dreamers and innovators find the heat to turn big ideas into huge achievements.

Bill, we who are the beneficiaries of the Rudin legacy, thank you for your many contributions to our great city.

There are a great many issues I could talk about this morning; issues that are critical to this City.

I could talk about the budget. I could talk about the crisis in health care.

I could recite for you the "Tale of Two Court Cases." One case pertaining to the education of this City’s children, which still has not been addressed; and the other about the change in the balance of power in Albany and how the Governor abuses it.

I’d be happy to come back and talk to you about each one of these issues at some later date.

This morning I’m going to talk about the rebuilding of Lower Manhattan, because in the end, how this State and this Nation respond to September Eleventh will define America economically and spiritually for generations to come.

It is not my intention to turn this breakfast into a tribute, but your father, Lew, is universally regarded as one of the architects of this, the Greatest City on Earth.

It is a testament to the cruelty of fate that a week before his passing, this great builder and humanitarian should be witness to the destruction of the September Eleventh attacks on Lower Manhattan.

I, too, was a witness. I, too, was deeply anguished.

I saw the plane hit the South Tower.

When World Trade Center One and Two crashed to the ground, I felt the earth tremble.

The toxic air and the sight of Lady Liberty standing tall through days and days of smoke are forever etched into my memory.

While a mostly horrified world was glued to their televisions, watching our heroes comb the mountainous wreckage for survivors, I was out trying to cope with the impacts that escaped the camera’s eye.

Helping displaced and frightened residents find shelter and clean water, obtain groceries and prescription drugs, track down and communicate with loved ones, deal productively with overwhelmed government agencies, and later on, helping them to properly clean contaminated apartments , was only part of the challenge.

The early days of the rescue and recovery effort were so daunting and complex, I established a mobile command center to reach and address problems at the source.

This was life in Lower Manhattan three and half years ago.

The same Lower Manhattan where I was born and raised and still reside, where I was married and raised my own family, where my children were married and are raising my grandchildren now.

My home; the community I’ve spent more than a quarter century fighting for as the assemblyman from the 64th Assembly District, had been decimated in ways no one could fathom on that fateful day.

This morning, I am here to tell you bluntly and without apology, that my hometown - the battlefield that absorbed the brunt of Bin Laden’s "war on America" - is not recovering as it should, as it must, as true American honor would dictate.

I am here to tell you that there is NO cohesive plan for the rebuilding and revitalization of Lower Manhattan as was promised by the President, the Governor, and the Mayor.

Yes, Lower Manhattan deserves patriotic praise and promise, but it can’t stop there.

To illustrate my point, this morning, I present you with "The Lower Manhattan Economy After September 11th," a study I directed my staff to undertake so that we can better understand the ongoing economic impact of the terrorist attacks.

Obviously, Ground Zero - and its immediate surrounding area - experienced the largest percentage drop in employment in the first year following September Eleventh: 50.5 percent of its employment to be exact.

More than three-and-a-half years later, the Downtown economy is stagnant and appears to be weakening.

Everyone knows that Downtown is the third largest business district in the country, but everyone is wrong. In 2004, Downtown dropped to fourth largest commercial district in the nation.

If we can fill Seven World Trade Center, if we can build the Freedom Tower and fill it with tenants, if we can do the same with the four proposed and yet-to-be-designed World Trade Center buildings, then Downtown will re-assume its place as the third largest commercial center in the Nation.

I don’t want to bore you with these numbers, but ignoring them only feeds the misperception that Lower Manhattan is in full recovery. Once you understand the statistics you realize the challenge and what is at risk: that if this State is not careful, we could lose the engine that drives the economy upon which all New Yorkers depend.

Lower Manhattan, defined as the area below 14th Street, lost 74,800 private-sector jobs or 14 percent of its private-sector employment during the three years after September Eleventh. \

In the year before September Eleventh, Lower Manhattan accounted for 15.4 percent of the State’s private-sector wages; in total, $51.6 billion. Even three years later, Lower Manhattan is still missing $10.8 billion of those private-sector wages. That is a decline of 20.9 percent.

Even taking into account the dramatic decline in wages that first year, Downtown’s wages cannot be considered even close to recovery today.

Apparel manufacturing - much of which is located in Chinatown - is hanging on for dear life, after losing twenty percent of its jobs in the first year. Apparel industry wages in Lower Manhattan dropped by 34 percent from a base of $128 million in the first year after 9/11.

After the attacks, restricted public access to the area due to bridge and tunnel closures, and disruptions in subway and bus service plagued Chinatown and the entire Downtown community.

Much of this continues today, and I cite Park Row as a particularly egregious example.

Let’s talk about real estate and commercial space.

At least 65 percent of the large tenants who relocated, moved out of Downtown, and it continues!

According to the Alliance for Downtown New York, twenty-five percent of those tenants who were located in Lower Manhattan in 2002 and 2003, and who did not renew their leases, did not return to New York City.

After September Eleventh, Downtown lost 13.4 million square feet of office space. Downtown occupied office space fell an additional 2.2 million square feet between 2003 and 2004.

In the year prior to 9/11, there were 108 million square feet of office space in Downtown Manhattan. In 2003, that figure declined to 93 million square feet. Since then, it has declined further to 91 million square feet.

Yet the vacancy rate in the downtown office market actually increased in 2004 to a rate of 13.7 percent!

Does that sound like Lower Manhattan is experiencing a healthy commercial revitalization?

Let me ask you this, how it is possible that we’re continuing to lose commercial space three years after 9/11?

The answer, as I stated earlier, is that there is no cohesive plan for rebuilding and revitalizing Lower Manhattan.

Surely you can understand the resentment in Lower Manhattan - when after all of the heroic pledges - we hear the Mayor and the Governor pushing the commercial development of the far West Side, in competition with the rebuilding of Lower Manhattan.

We need - we must - get Lower Manhattan up and running better, faster, healthier, stronger, and more efficiently as a central business district for our working families, small businesses, and our major financial houses.

I ask you, isn’t it smarter to play to our strengths?

Lower Manhattan is home to the Stock Exchange and to the Mercantile Exchange. Clearly, we have a strong, positive base from which to work, and we have indeed made positive strides.

For example, Morgan Stanley recently announced that it is expanding its operations in Lower Manhattan. Goldman Sachs has committed to build its headquarters in Lower Manhattan.

Yes, it’s also positive that residential development and residential construction has rebounded.

Yes, it’s great that the Mayor and I announced the construction of a new elementary and intermediate school last week, fulfilling the vision of the local community board and its Chair, Madelyn Wils.

For a plan to work, it must be balanced, and in this case, residential development balanced by commercial and retail development.

So I issue a challenge to you: expand your business into Lower Manhattan.

Too big a challenge?

Consider this: Verizon has not only decided to keep its corporate headquarters in New York City,

I’m proud to announce that they’ve committed to me and to the Mayor that they will consolidate their operations and move their headquarters to 140 West Street in Lower Manhattan.

Who wants to match that!

This is what I’m talking about. This is the kind of commitment we need now, and have needed since 9/11. This is the promise we made and the obligation we accepted on that dreadful day.

It’s my obligation. It’s your obligation. It’s the President’s obligation, the Governor’s obligation, the Mayor’s obligation. It is America’s obligation to rebuild and revitalize Lower Manhattan; a promise that was made to us amidst the smoldering rubble of Ground Zero.

But please, let’s not lose sight of the character of Lower Manhattan.

It’s a 24-hour community, a symphony of families and working people, schools and businesses together, where 35.5 percent of the people who live and work in my Assembly district walk to work! Show me another community in the Nation that can make that claim.

This is what makes Lower Manhattan unique. This is what makes the Lower Manhattan lifestyle worth preserving.

My frustration here is the lack of recognition that in Lower Manhattan, commercial and retail development is important.

We don’t need a vision and a plan that changes the whole map of Manhattan. What we need is to be building more office space for small businesses and large corporations.

Providing incentives for residential development, but not building additional schools, community centers, and libraries, doesn’t make any sense. That’s not a vision.

Building Seven World Trade Center without the Governor and the Mayor fully funding the Fitterman Hall project makes no sense.

We must remove the blight, the obstructions to community access, and resolve all of environmental concerns by rebuilding Fitterman Hall. Anything less is not a vision.

Putting it all together: residential and commercial incentives and development, building office space and schools, attracting businesses to relocate to Lower Manhattan, establishing a Chinatown Empire Zone, that’s how you begin to design a vision for Lower Manhattan’s future.

After 9/11, I put forth numerous ideas for the future of Lower Manhattan.

One of those ideas was a significant short-term increase in commercial real estate subsidies to stimulate commercial development.

If we had been providing the incentives I had asked for, our commercial occupancy rate would have increased dramatically, just as our residential occupancies ballooned when residential incentives were provided.

And certainly, we wouldn’t be here right now wondering what we could have done to keep that 65 percent of large commercial tenants from relocating out of Downtown.

The time has come to start talking about commercial incentives.

As we support commercial development, we must ensure that the infrastructure is in place to support it; projects such as the Second Avenue Subway, one of the few projects designated by the U.S. Department of Transportation as a "high priority" project.

I’m pleased that the President included one-stop LIRR service to downtown in his budget, but we’ve seen this before. If the President is committed to rebuilding Lower Manhattan, he must make these projects real! Congress cannot be allowed to employ regional favoritism to jeopardize them.

Rebuilding Lower Manhattan should be a matter of national pride.

Senator Schumer, Senator Clinton and our bipartisan Congressional Delegation have shown their willingness to advocate for more resources for Lower Manhattan.

I stand here ready and willing to work with the Governor, the Mayor, the LMDC, and with all of you to put a sensible plan for Lower Manhattan into place.

I’m working with CUNY to develop business incubators in Lower Manhattan, in fields where this City has comparative advantages.

I’m working with the Downtown Alliance to develop a wireless network in Lower Manhattan.

We must help Larry Silverstein attract tenants to Seven World Trade Center and to the Freedom Tower.

We must work together to ensure that New York gets its fair share of federal funds for homeland security, transportation, and for health care.

Yes, we need the President, the Governor, the Mayor, but we also need each and every one of you to resurrect this great community.

I knew Lew Rudin. He loved this City the way you love this City, the way I love this City.

I remember the respect he garnered and how he was able to bring together the biggest players from Labor, Business, and Government to hoist this City from imminent fiscal collapse in the Seventies.

Lower Manhattan needs Lew Rudin’s brand of concerned and active leadership now.

Ladies and Gentlemen, what I’m asking you to do involves so much more than the simple shaping of political legacies. I am challenging you to guide the rebuilding of an American city that was victimized by the ultimate act of terrorism.

History has given us the rare opportunity to craft New York’s response to that threat and to demonstrate the power, resiliency, and resolve of this great city.

As I stated earlier, I stand ready work with you to preserve the spirit of Lower Manhattan for our children and for our national pride.

I hope that you will join me.

Thank you for listening.

Click here to view The Lower Manhattan Economy After September 11th