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NEW YORK CITY-Frank Cento, managing director at Jones Lang LaSalle, has an office overlooking Ground Zero and notices what a difference a year makes.

“It looks 200% better,” he says. “The smoke is gone and you can see the whole roof of the PATH station. It looks terrific.”

Shirley Jaffe, vice president of economic development for the Alliance for Downtown New York Inc., says “street life is back to normal–the ambiance has returned.”

And John E. Zuccotti, chairman of Brookfield Financial Properties and incoming chairman of REBNY, notes that under the leadership of the Governor and the Mayor, “significant progress has been made on many fronts. We have a plan for the development of the site and a process is in its final stages for the creation of a respectful and inspiring memorial. There is a timetable for development of the iconic office tower, and the architectural/engineering team has been selected for downtown’s new Grand Central. Numerous quality of life improvements have been identified, in cooperation with the Downtown community, and these are being vigorously pursued,” he says.

It’s not just physical changes that are evident in Lower Manhattan–a number of large leases have been signed this year.

“Since November through August, we’ve completed almost 515,000 sf of new leases at 2 World Financial,” offers JLL’s Cento. “A number of former WTC tenants went to Midtown and are coming back.” He’s also seen an increase in the volume of tenants interested in being in the World Financial Center. In a recently released Jones Lang LaSalle report, Manhattan has experienced significant leasing activity this year and is on track to surpass last year’s gross leasing activity, making it the first time since 1999 that the city has seen annual gross leasing activity increase over the previous year. In the first six months of 2003, Manhattan recorded 8.3 million sf of gross leasing activity, compared to 10 million for all of 2002. Between 2001 and 2002, when gross leasing activity fell by more than 50%.

Richard Bassuk, president of the Singer and Bassuk Organization, a mortgage brokerage and real estate advisory firm that has handled a number of Liberty Bond financings for residential conversions, believes the “enormous progress” that has been made in the Downtown residential market will serve as a “shot in the arm for the whole area. This year major real estate developers recognized that Lower Manhattan has a host of attributes.”

Jaffe of the Downtown Alliance notes the addition of big-name retailers such as Borders to the Downtown area are significant and very exciting. “The green market had been sorely missed.” She points to Stone Street as being a new hot-spot. “It has an Old European feel with cobble streets. There are new restaurants for businesses and residents.”

Christine Emery, director of retail services at the Lansco Corp., also sees the rebirth of Stone Street as key. “Things will spread from there.” She notes that the South Street Seaport area on the east side is one are that has been hurting.

Others agree that Manhattan is facing some economic challenges. The Center for an Urban Future recently released a report, “Engine Failure” which exams the long-term economic challenges facing New York in the post-9/11 world. It concludes that Sept. 11, 2001 has accelerated and magnified a number of long-term economic trends that were already at work.

“New York has the inherent strengths to overcome these daunting obstacles, but it would be a big mistake to assume that the city’s current economic problems are merely cyclical and that another major rebound is inevitable once the national economy kicks into high gear,” says Jonathan Bowles, co-author of the report.

Others are focused on a bright future for Lower Manhattan.

“We can take a measure of satisfaction in our progress to date, while we keep our focus sharply on moving forward to implement these plans that will secure and sustain the Governor’s and the Mayor’s vision for Downtown’s future,” says Zuccotti.

“New York has such resilience,” adds Emery. “It will continue to reinvent itself.”

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