The Story of Lower Manhattan: Bolstering the Commercial Core

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1 The Story of Lower Manhattan: Bolstering the Commercial Core Carl Weisbrod President, Alliance for Downtown NY Lower Manhattan - Overview World s Financial Capital 3 rd Largest CBD in USA 1

2 At the Beginning (c. 1995) 21 million SF vacant office space 20% commercial vacancy rate Over-reliance on FIRE sector Quiet after dark Commercial Vacancy Rental Rates Vacancy Rate 25% 20% 15% 10% 5% 0% Year $40 $35 $30 $25 $20 $15 $10 $5 $0 Avg. Rental Rate TOTAL VACANCY RATE TOTAL DIRECT RENTALS Source: Cushman & Wakefield The Downtown Alliance Formed in 1995 Mission: To create and promote a safe, clean, live-work, totally wired community, which showcases the nation s most historic neighborhood and serves as the financial capital of the world for the 21 st century. Method: Strengthen and Diversify the core commercial sector 2

3 Strengthening and Diversifying the Core: The Downtown Alliance advocated for, helped establish, and ultimately marketed the Lower Manhattan Revitalization Plan Tax Incentives to fill vacant office space Tax Incentives to upgrade outdated space Tax Incentives for Residential Conversions Diversifying the Core: The Downtown Alliance also worked to diversify the core in Lower Manhattan: High-Tech Housing 3

4 Diversifying the Core: High-Tech Information Technology District - Plug n Go Program - 55 Broad St. Information Technology Center - Bytes, Bites & Bars Diversifying the Core: Housing 4

5 Supermarket Subsidy Program Residential Amenities Stone St. Before After 5

6 Success Commercial Occupancy Vacancy Rate vs. Rental Rate Vacancy Rate 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Year $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 Direct Rental Rate TOTAL VACANCY RATE DIRECT RENTAL RATE Source: Cushman & Wakefield Success Diversification Non-FIRE Private Sector Jobs 1996: 79, : 119,110 Job Growth FIRE: 34,366 Non-FIRE: 39,204 Source: NYS Dept. of Labor 6

7 Success Residential Growth Lower Manhattan was NYC s fastest growing neighborhood, increasing from 15,500 residents in 1995 to 25,000 in (8.3% CAGR) September 11 th,

8 The Opportunity to Rebuild Other Issues How significant are decentralization pressures? The financial core or further diversification? Can there be too much housing? 8

9 The Downtown Alliance s role Continue work to both strengthen and diversify the core commercial sector: Proactive Business Attraction Diversification Advocacy Business Attraction The Downtown Alliance proactively recruits businesses to Lower Manhattan in a number of different ways: Marketing Materials Targeted Direct Marketing Award-winning Online Tools Customer Support with Incentives Area Branding (R2R, Downtown for Dinner, WiFi) 9

10 Marketing Materials Bringing Your Business Downtown includes sections on: Potential Customers & Partners Affordability Access Telecommunications Workforce Parks and Open Spaces Area Shopping, Restaurants & Nightlife Fun & Quality of Life Targeted Direct Marketing 1. Data Gathering 2. Data Analysis 3. Direct Mailing 4. Individual Follow-up by Phone 10

11 Online Tools Downtown Incentives Calculator and Space Finder Used over 15,000 times since launch in 1/03 Customer Support Full time Case Manager dedicated to helping businesses with government incentives Over 1240 businesses helped in the last year 11

12 Branding The Downtown Alliance augments Lower Manhattan s image as a dynamic, fun, and technically-advanced area: River to River Downtown for Dinner Lower Manhattan Wireless Network Diversification The Downtown Alliance continues its work to diversify the local economy Direct Mailing to Business Service Firms Commercial Art Galleries 12

13 Advocacy At the same time, the Downtown Alliance aggressively advocates on behalf of the area and local businesses to ensure needed investments in infrastructure are made. Where we are now Residential Population Booming 97% occupancy Over 1300 new units under construction or conversion; thousands more under consideration Commercial Sector Stabilizing Vacancy dropped last quarter (only district in NYC) Challenges Remain Decentralization pressures Projections of limited growth within FIRE sector Questions about quality of life at construction site 13