By Roland Li
As summer gave way to fall in 2001, the World Trade Center was flourishing. The twin towers were around 97% leased, and the Port Authority closed a ground-lease to Silverstein Properties in one of the largest real estate transactions in history.
Cherrie Nanninga, then director of real estate for the Port Authority, attributes the success of the entire complex to the retail base, fueled by 150,000 people passing through each day and strong access public transit.
“As time went on, the retail got better and better,” said Nanninga, and sales eventually exceeded $1,000 per s/f, making it one of the most profitable shopping centers in the country.
After the 1993 truck bomb, the concourse was changed and a new corridor was installed. Banks were moved to the plaza, opening space for brand name retailers including Banana Republic. One of the first notable retailers was the Gap, which replaced a food court. A 24-hour Duane Reade would become among the highest grossing in the country, and Borders took a three-level store.
“It really changed the face of the World Trade Center,” said Nanninga. “The retail set the stage for the office.”
At any given time, there were five or six retailers clamoring for a particular retail space. The Port Authority told retailers to open on Sunday, despite their protests, and while business was down, their weekday sales were tripling those of other locations. The Port Authority was also upgrading the center’s electric capabilities, as well as gradually replacing the fireproofing.
Mary Ann Tighe, then a broker with Insignia/ESG, remembers battling assumptions of downtown in the 1990s. At a meeting with a client, a woman said, “Oh, come on, Mary Ann, where would you get your nails done down there?”
Although it seemed trivial, Tighe realized that the biggest challenge was the perception. “She hit right at the vulnerability of downtown,” said Tighe.
Nonetheless, deals began closing. Tighe’s client, insurance company Empire Blue Cross and Blue Shield, had recently sold its headquarters at 622 Third Avenue to Cohen Brothers Realty for $171 million, and it was looking for a new location. It required a cafeteria for its employees, and the Port Authority agreed to expand its own cafeteria to accommodate them. Empire ended up taking 461,000 s/f and saving millions each year in rent, and Tighe and her team won the Real Estate Board of New York’s 1997 deal of the year.
In 1998, Marsh & McLennan wanted a connection between its midtown headquarters and office space in New Jersey, and Tighe closed a lease for 361,000 s/f in the South Tower. She credits the Port Authority’s executive director at the time, Robert Boyle, along with Nanninga, for moving the deals forward.
“Bob Boyle was immensely helpful and personal,” she said.
On Sept. 11, 2001, Tighe was leaving her Upper East Side apartment, with a clear view of the Trade Center. When the first plane hit, she walked to the window, and although she thought it was an amateur pilot that had mistakenly flown into the building, she immediately knew that Cantor Fitzgerald was near the impact. The firm would ultimately lose 658 employees.
Seventeen minutes later, when the second plan hit, she immediately knew it had struck her own client, Marsh & McLennan, which lost over 300 employees. She went directly to the firm’s office in midtown, where she would spend the day, trying to find places to relocate. Today, it occupies 1166 Avenue of the Americas.
In October, Empire Blue Cross and Blue Shield would lease permanent space at 11 West 42nd Street and later, 15 MetroTech Center in Brooklyn.
“Those weeks and months after 9/11, it made me realize how important it was for people to have a place to go to work to go to,” said Tighe. “It gave me new insight into my profession.”
Nanninga, who had an office on the 88th floor of one of the towers, had planned to schedule a breakfast with an acquaintance at Windows on the World, the restaurant atop the North Tower, but the other person cancelled. Instead, she went to a doctor’s appointment, hearing briefly that something had happened at the towers. When she arrived in the doctor’s office, she realized the extent of the damage, and the second plane hitting.
Knowing that she would be unable to access the site, she went home and was on the phone with Larry Silverstein when the South Tower collapsed.
“The Trade Center, from the beginning, meant a lot to Larry Silverstein,” said Nanninga. “It was more than just the commercial property for him. He was really committed to rebuilding.”
Later in the night, Tighe would also meet Silverstein by chance. She began to cry, and she recalls Silverstein comforting her and saying, “Darling, we will rebuild.”
“There’s nobody with a stronger and more positive outlook in life than Larry Silverstein,” said Tighe.
“It was a very emotional time. Everyone was in shock,” said Nanninga. But the Port Authority, which employs thousands and oversees the city’s bridges and tunnels, had no time to rest. She remembers meeting a colleague who had descended from the 81st floor and walked up to the West Side Highway, taking a ferry to New Jersey. When he arrived, he began ordering chairs.
The Authority decided it should be near a PATH train, and leased around 200,000 s/f in Newark, N.J. It took space at One Madison Square Park and Park Avenue South, including a 50,000 s/f space that was intended for one of the many dot-com technology companies that had imploded. The Authority consciously sought not to lease downtown, both because of the raw emotions over the site – the agency lost 84 employees on 9/11 – and also because it didn’t want to compete with the Trade Center’s former tenants, who were now scrambling to find space.
As the Authority settled into its new surroundings, Nanninga, a former second grade teacher, considered her next move. “My strength is in execution,” she said. “I thought it was a good time for me to go and move on.”
In 2002, she joined CB Richard Ellis as chief operating office of the tri-state region. Tighe came on as CEO of the brokerage’s tri-state region. As the downtown office market recovered, Nanninga and Tighe began considering downtown’s entire future. It was crucial, they realized, to make it a real destination. Although targeted incentives for residents and businesses were aiding the process, it needed something more.
“The whole issue of what downtown would become – it was a profound moment of reinvention of those committed to downtown,” said Tighe.
One of Nanninga’s strongest memories was eating at Tony May’s restaurant Gemelli – Italian for “twins” – at 4 World Trade Center just a week before the attacks, and watching a dance troupe perform in the plaza. The arts had a presence in the area, but she envisioned something more. As chair of the Lower Manhattan Cultural Council, Nanniga partnered with the Downtown Alliance, Battery Park City Authority and Brookfield Properties, which owns the World Financial Center, to create the River to River Festival, a summer series of the arts throughout Lower Manhattan.
“We wanted to do something for all those loyal people who remained downtown during that very difficult time,” said Nanninga.
Tighe and Robert Alexander, now chairman of CBRE’s tri-state region, gave River to River seed money, and American Express – itself a downtown tenant – became a title sponsor. The festival celebrated its 10th anniversary this past summer.
Silverstein’s 7 World Trade Center opened in 2006, and Tighe and colleagues Tim Sheehan and Ken Meyerson brokered the first deal, a 400,000 s/f lease by the New York Academy of Sciences. Tighe became a leasing agent for the tower, which is expected to be fully leased in September.
In order to fully appreciate the transformation of Lower Manhattan, Tighe said, it is crucial to see it with your own eyes.
“I’m constantly impressed when I take a client there for the first time,” said Tighe. The visual connection was crucial for Si Newhouse, head of Condé Nast, who committed to the site after gazing at the skyline atop One World Trade Center.
Although there remains an ache for those involved in the original Twin Towers, there is a belief that the new complex will usher in a new chapter for the area, and the entire city.
“Initially, it was very emotional for a lot of people,” said Nanninga, and she was among those that wanted the original towers restored.
“Now, I realize that would have been a mistake,” she said, describing the new center as a more welcoming, integrated space. “Now I think it’s really going to be part of downtown.”
“I think we’ve fallen into these bad habits about downtown. I think there’s a lot of 20th century thinking,” said Tighe. “I think by the next four years, the visual impact of what has been achieved will be so undeniable that downtown will have actually lead the way to the 21st century of New York.”