At Crains Speech: Schumer Warns: Culture Of Inertia Threatens To Derail Downtown Development Lays Out Comprehensive Strategy For Revival

As the redevelopment of Ground Zero slows, and 2 billion dollars of federal money earmarked for transportation projects remains unspent; today U.S. Senator Charles E. Schumer outlined a comprehensive strategy to revive downtown development, and set a deadline for a plan for the transportation money to be in place. In a major address at Crains Business Breakfast Forum, Schumer also discussed his plans for Governors Island to become an international biotech center and his idea to create an apron park to surround the downtown waterfront. The Senator also urged the State to build other parts of Ground Zero before the building of the Freedom Tower begins.

The text of Schumers remarks follows:

Good morning, its good to be back at Crains. As some of you may remember, in December of 2003, I last stood at this very forum and discussed our progress in rebuilding of Lower Manhattan since the dark days after September 11, 2001. Today I would like look once again at our progress and share with you my thoughts about what we need to do to next to successfully rebuild Downtown and strengthen our Citys economic prosperity.

In 2003, I spoke about the need to think big, to pursue bold projects and focus on job creation. I feel that more strongly today than ever about those goals. Yet I see a certain inertia and timidity setting in, and this is slowing the progress of the rebuilding. The signs of that slow down are evident for all to see. Plans for the new Downtown Goldman Sachs headquarters are on hold. Sundays New York Times reports that security concerns threaten to bog down the Freedom Tower. Over $700 million in CDBG funds, provided by Congress, remain unspent. We have not yet ordered one beam of steel for the Freedom Tower yet! Nearly four years after September 11, we are losing steam.

Rebuilding the Ground Zero is a sign of the renewal and the resilience of New York City in particular, and the United States in general. We must turn our sights to rebuilding Downtown with the same dedication and energy we used to pick up the pieces in the months following that tragic day.

Before 9/11 the three biggest commercial districts in the country in terms of office space were Midtown Manhattan, the Chicago Loop, and Lower Manhattan. Thats the way its been for years. Since 9/11, Washington DC has surpassed Lower Manhattan in terms of commercial space. That is not happy news. News like that ought to grab our attention and serve as wake up call to focus, once more, on Downtown a the top priority for our City and State.

And let me also say that this is not a criticism on Mayor Bloomberg or Governor Pataki. Finger pointing will do us no good to get this project moving. Rather, we must refocus the entire culture surrounding the sites and our city. Unfortunately, a culture of inertia has infected downtown redevelopment and our city in general making large public projects like this one nearly impossible to complete.

This culture of inertia has infected our capability to implement bold new public works of any type. At the dawn of the last century, we built a subway system and grand public works like Grand Central station. In the 30s through 60s we built a city highway system, Lincoln Center, and the World Trade Center. But there hasnt been a major public work built in this city for 50 years. Why?

I believe a culture of inertia has set in. Criticism predominates over construction; critics are given more weight than those trying to build. It doesnt matter how small a constituency or flawed an argument the critic possesses. He or she always seems to predominate in political circles, in the news media, and in the public debate.

Weve always been a city that loves free thinking criticism, but its always been countered by a can do spirit. The culture of criticism doesnt completely stop New York from growing because of capitalism. Someone can go ahead and build a small business or even a skyscraper on his or her own. The goal to make money overcomes the culture of criticism. But when it comes to large public works, where the profit motive vanishes and public pressure has great effect, we seem paralyzed. We havent built a grand public project or transportation improvement in New York for 50 years, since Lincoln Center and the World trade Center. Everything else Moynihan Station, Ground Zero, the 7th Avenue extension, and the 2nd Avenue subway has been held up.

Yesterdays New York Times has an architecture critic discussing how he would redesign the Freedom Tower. Sure, we could always go back to the drawing board and get 10 new plans. But whatever else you want to say about LMDC, they have been open to ideas and their process has been inclusive. The time is now for action, not criticism.

New York is a frenetic place of big dreams, ambition, and drive. Its a place that attracts movers and shakers from all over the world, many of them in this room today. But were approaching the biggest development challenge of our collective times with an inertia that doesnt suit our City.

Who Lost Goldman Sachs?

In August 2004, Goldman Sachs, one of the worlds premier financial services firms, announced its intention to build a new headquarters in Lower Manhattan. Goldman stated that it would build a magnificent 40story, $2 billion tower that would house the over 12,000 employees, 4,000 of them new. The construction alone would bring over 700 construction jobs and add over $350 million to the economy. New Yorkers were both relieved and thrilled.

And then in early April, after two years of prolonged negotiations with the City and State, the firm abruptly announced its intention to pull out of Site 26 and seek other options. There seem to be a number of matters at issue and I applaud Governor Pataki for agreeing to drop one of the main obstacles to the deal, construction of a West Street tunnel. Its good the tunnel is finally dead. To have paid over $700 million extra for a threeblock tunnel would have been one of the most colossal wastes of money since the Tweed Courthouse. But, unfortunately, it is clear that Goldmans concerns go beyond the tunnel and the firm has not agreed to return to Site 26 yet.

Much to my surprise, Goldmans announcement prompted relatively little outcry or in the media. In any other city, an announcement such as Goldmans would have prompted a massive outpouring of public attention and effort. I am sad to say that has not been the case here. Again, our civic culture seems to have just shrugged. Criticism and why we should not get something done ends up on page 1, while the failure to do something, even something vital to our city, more and more, is met with a shrug of the shoulders.

I sincerely hope that Goldman will return to the bargaining table. In January 2002 when we were all deeply concerned about the future of Downtown, if someone would have told us that one of the nations premier financial services firms wanted to build an elegant new headquarters and add 4,000 new jobs, we would have rolled out the red carpet. We should still do that today.

If New York cannot cut through the bureaucratic morass and allow Goldman to build Downtown, then something is deeply wrong with our civic culture and I fear for the future of our city.

Freedom Tower

The Times story on Sunday confirmed what many of us feared momentum for the Freedom Tower is slowing and it now appears that it will be some time before all the complex security and infrastructure questions can be resolved satisfactorily. Originally the Freedom Tower was slated for completion by 2009, now that looks more like 2010 or 2011, nearly a decade after September 11.

The fact that the Freedom Tower will be a target is not news. The World Trade Center was attacked twice, and all the parties involved in the construction of the Freedom Tower have approached the project with a dual mission of expressing New Yorks, and our nations, spirit of hope and optimism, while ensuring that the building be maximally safe from attack.

The Freedom Tower has to be one of the very best defended private buildings in the world and we all know that will take extra time and money to do so. But I also know that it is precisely because it WILL be a target that we cannot delay its construction. With its bold and evocative design, the Freedom Tower is more than a building to anchor Lower Manhattan; it is a statement of American resolve. The Police Departments particular concerns about the building should be taken seriously. But the Freedom Tower cannot become a barricaded, windowless fortress a dark and uninviting presence in a neighborhood that desperately needs the shops, people and bustle unique to this great City.

A higher standard for Freedom Tower is appropriate. But the higher standard we set for the Freedom Tower should not to take over everything else. Santiago Calatravas soaring and beautiful design for the World Trade Center station is one of the most extraordinary elements of the Downtown plan. But we know that the glass design might be vulnerable to attack. And while we must take every precaution, we cant let our security concerns leave us with a cement box.

The late Senator Daniel Patrick Moynihan, one of urban Americas greatest champions and, not surprisingly a fan of Mr. Calatravas designs, repeatedly warned that we must not let our fears destroy the physical and social openness of our nations great cities. He warned that ours must be openness and fearlessness in the face of those who hide in the darkness. A precaution, yes, sequester, no.

We all know that a truck bomb could damage any one of our hundreds of skyscrapers. Biological, chemical, and worst of all nuclear weapons could do even worse. But fear of terrorism cannot stop us from building and thinking grand, or we will be much the less.

Transportation

I have long supported using the lions share of those funds to build a rail link from Downtown to JFK Airport. As we all know, Downtown Manhattan has not grown like Midtown, or even Downtown Brooklyn, in part because its harder to get to.

Theres a total of 2.7 billion in federal funds available for the downtown link. $700 million comes from dollars not spent on West Street tunnel. And $2 billion will come from dollars that Congress will hopefully allocate this summer as the last piece of the $20 billion owed NY. This money was originally scheduled for tax breaks, to prevent business from leaving downtown and has not been used. We have gotten the ok from the President and Senate leaders to use this $2 billion for transportation purposes. Should it pass this summer, and I am optimistic it will, it will be doled out in ten $200 million dollops. Other sources of funds for the tunnel are the $560 from the Port Authority and the $400 the MTA has committed. That makes a total of $3.7 available for the link.

That said many people believe the rail link will cost $6$8 billion. The only other real source of dollars is additional funding by the MTA, which finds itself dangerously overextended. Earlier this year, MTA wanted $8 billion to continue its ambitious capital plan, but NYS legislature only gave them only $2.5 billion, which puts much of its capital plan in jeopardy. Furthermore the MTA has listed East Side access and 2nd Avenue subway as its two highest yet unfunded capital projects. Will the MTA commit the extra dollars needed if the rail link costs more the 3.7 billion? And if not where will the dollars come from?

I am a believer in the JFK rail link project and was one of the earliest to propose it. But I also feel strongly that the remaining federal funds must be spent quickly, to spur growth and job creation now.

We do not have firm plans in place for the route and construction of the JFK rail link. I believe we must set a deadline for ourselves, and begin thinking of alternatives if the dollars or plans for this rail link fail to materialize. If we take as long to get the JFK Downtown rail link underway as some of the other post9/11 projects, we risk losing the $2 billion altogether. Thus, if the complete financing and plan for building a rail link are not concrete, by the time of next years fiscal budget, July 2006, I will move to spend it on some other downtown needed purpose. In Washington if you dont use it, you lose it.

Quality of Life

It will take some time to get the rail link project underway and resolve the security and infrastructure issues surrounding the Freedom Tower. But there is much we can do to revitalize downtown immediately and not wait for final plans for Freedom Tower and the rail link to gel. We should focus immediately on retail development, such as that planned for Tower 2. Tower 2 is a smaller building at Ground Zero facing Church Street that will provide retail, which is so desperately needed Downtown in the Ground Zero area. We built 7 World Trade quickly, why cant we do the same with number 2 and the beautiful Calatrava station? They should start these projects within one year.

We should also focus on quality of life improvements, from parks to cultural activities that attract major employers and residents alike. The Regional Plan Association has proposed five key projects, at a total cost of $464 million that will help revitalize the oldest and one of the most beautiful parts of our great city.

New York is city of neighborhoods. And it is the small gifts such as the parks that make neighborhoods distinct and soften life in a hectic city. What would the Upper West Side be without Riverside Park OR even the Broadway medians that lend some depth and greenery to the streetscape? Here Downtown, we have a chance to create the same environment.

We can easily afford these projects out of the remaining, unused $735 million in federal CDBG funds. We should start all of them within the next year. There is no reason to wait for the Freedom Tower or anything else. For a relatively small public investment, these projects will create one grand GREEN apron that will link the waterfront all the way around Lower Manhattan. The new waterfront access will attract new residents and jobs.

� $70 million to extend the Hudson River Park southwards

� $90 million to invest in the Fulton Street Corridor Plan. Help with streetscape improvements, retail fa�ades, and upgrading intersections and parks along Fulton Street, directly east of Ground Zero.

� $27 million to implement the Chinatown Circulation plan necessary to create a series of improvements to traffic access and circulation to Chinatown.

� $125 million the Greenwich Street South project would deck over the BrooklynBattery Bridge Tunnel cut to build about 2,000 new units of housing and urban parkland.

� $152 million East River Waterfront Plan. This would open up the East River waterfront to public recreation, and would reconnect the City to the East River where it began. The plan calls for a grand esplanade from the North of the Manhattan Bridge to the battery.

I believe these are the kind of relatively small investments that we need to complement the large commercial office towers and major transportation projects. These kinds of projects are important in order to create the kind of residential environment that will attract the people who will create a truly 24/7 community. And the best news is that many of these projects are popular with area residents and businesses, ready to go, and we have funds in hand. A rare and wonderful combination in New York.

Jobs and New Industries for New York

But I believe we need to think and dream even beyond these infrastructure projects. We need to plan ahead for the next industries that will create jobs and drive New Yorks economic engine. Were still growing slower than the national average and the finance industry is still 54,000 jobs below 2000 levels, which should not please New Yorkers given the 2001 job losses.

We do need Lower Manhattan to remain a vibrant financial center, but we need to attract a diverse mix of industries, so that the economic base Downtown cant be disrupted the way the financial services industry was disrupted following 9/11.

Weve had a few successes, Verizon, Bowne, and Morgan Stanley. But we should do a lot more and should broaden the net to other industries.

Right after 9/11 we put together a slate of federal tax breaks worth $3.8 billion to keep existing businesses downtown. Now, its time for City and State to put together a new set of tax incentives to lure new businesses there.

There is no excuse for 7 WTC still being vacant. Even if it takes deep State and City tax incentives to restore jobs downtown, the price is clearly worth it.

Governors Island

And in the effort to attract new businesses and create jobs, we have a secret weapon Governors Island.

Governors Island is a gem with what amounts to the 50 city blocks worth of developable space just across from Downtown Manhattan. As we know, Governors Island presents a unique chance for the planners and developers to start thinking big. Growth on Governors Island can dovetail on Downtown redevelopment and vice versa.

We have a tremendous opportunity with Governors Island, and we cant squander it. I believe we ought to pursue a major biotech or pharmaceutical facility to the island. The major European pharmaceutical firms have determined that they get better research product from the scientists over here. Novartis recently decided to open a major facility in Cambridge that created 4 to 5,000 jobs. Glaxo Smith Kline and other European pharma firms are looking to open a similar facility in the States. That ought to be New York.

We are one of the great centers of biomedical research. But we have relatively few businesses that take that research and turn it into product and more jobs.

We have all the major hospitals here and the best doctors. Its a natural fit for New York. We should do whatever it takes to lure one of these companies that will create thousands of jobs at first and tens of thousands more as spinoff firms lure more biotech to New York.

The Coast Guard departed Governors Island in 1997, and now eight years later, once again we have to reject the culture of inertia and act.

Conclusion

Osama Bin Laden and the 9/11 hijackers targeted the political, military, and economic centers of the United States. They viewed New York City and the Twin Towers as a mighty symbol of our nations power and prosperity. While we can put up a Freedom Tower, we will not have made a statement about the resilience of our City, and the resilience of our nation, unless we truly rebuild Lower Manhattan as an economic center of the free world.

Right now we seem to be losing our way, letting inertia and bureaucratic obstacles slow our progress. Rebuilding Lower Manhattan is not just any old public works project. Nothing less than the future of our City is at stake.

So let us raise new canyons of steel with the same resolve with which we cleared those mountains of rubble. We are New Yorkers; we dont cower. We create. We build. We grow ever stronger. Theres no question that New York can do it. And we will. Lets stop twiddling our thumbs and get to work.