In N.Y.C.'s 'war zone,' slow progress

One month after terrorists took down the World Trade Center, Wall Street still operates like a war zone.

Armed National Guard troops and police stand watch by concrete and metal barricades that cordon off ground zero. Dust hangs in the air in the narrow streets, which occasionally fill with the acrid, metallic smoke from the still-smoldering remains.

Gone are the taxis. Only vehicles with special police passes are allowed in.

The traders, bankers, lawyers, and tourists all take the subway now and emerge cautiously into the eerily quiet streets. Some in pinstripe suits also wear surgical masks. A few even don full-fledged gas masks.

"The anxiety level is still pretty high," says Mark Varon, an options trader on the American Stock Exchange. "But most New Yorkers are pretty fearless. They're just going about their business and doing what they have to do."

While the rest of the country returns to a semblance of normalcy, it could take years, and billions of dollars, for New York's financial district to recover.

The whole area remains a constant reminder of the more than 5,400 lives lost. Battery Park, named for the batteries of guns that fortified the tip of the city in the early 17th century, has again become a barricaded military outpost, complete with green Army tents and armored vehicles.

Huge office towers still stand empty. More than 100,000 jobs are simply gone from a four-square-block area. They've moved to midtown, across the Hudson to Jersey City, or into Westchester County.

But there's also a determination that Wall Street will recover. "The cycle will change. In a few years, they'll all come back downtown," says Jack Walsh, a maritime lawyer at Freehill Hogan & Mahar, which plans to stay downtown.

But in the meantime, some businesses are moving. On Monday, Lehman Brothers purchased a 32-story office tower in Times Square for about $650 million from Morgan Stanley, another investment banker. The main reason: Lehman Brothers has yet to get into its old building at the World Financial Center, across the street from the twin towers. "We don't how much damage our building has suffered and how long it will take to clean up," says Bill Ahearn, a spokesman.

The sale also shows changes in how New York businesses think. If Morgan Stanley had occupied its almost-completed tower, it would have had two buildings within one block of each other. As one executive noted, both buildings would have used the same electricity grid, the same transportation network, the same telecommunications system. "If something went wrong here, there is not a lot of flexibility," he says.

The shift to other locations actually began before the attacks. With new technology, traders and investors no longer need to be right on Wall Street to trade. Many companies already had backup facilities elsewhere. That was the case with Lehman, which quickly moved people into its Jersey City facilities.

As firms scramble to get back to business, the city is slowly learning how much it will cost to rebuild lower Manhattan. On Tuesday, Gov. George Pataki estimated that the rescue, recovery, and rebuilding effort alone would run about $34 billion - roughly the size of the New York City budget. Mr. Pataki is asking Congress for a total of $54 billion. The additional money is to help make up lost tax revenues.

Last week, the city comptroller estimated that the price tag could go as high as $105 billion over the next two years. That includes revenue lost from tourism.

Ironically, lower Manhattan has become a tourist attraction itself. But visitors roam the Wall Street area with few places to actually go, besides the barricades that provide a distant view of the remaining burned buildings.

"It's a critical time to be here in New York, eh?" asks Thiery Ouvrard of France, who was finishing up a world tour here. He came despite the terror attack but is also frustrated by the intense security impinging on his sightseeing.

The New York Stock Exchange, draped with an American flag almost as big as the building, usually hosts more than 600,000 visitors a year. It's now closed to the public. So is the Statute of Liberty, which typically greets more than 5 million visitors annually. The southern edge of Battery Park has been left open so people can see the nation's beacon of freedom, but only through a chain-link fence that cuts off the promenade by the water.

A handful of people stand around, a few lean forward, their faces pressed up against the fence. Geraldine Fuller, a Boston businesswoman in a red sweater trimmed in blue and gold, was here just a year ago. Then, the place was mobbed with vendors and people.

"Now, we have it all to ourselves," she says, looking at her friend Janice Young. They came today because, they said, "they just had to see it."

"At a distance, it doesn't seem real. You know it is, but it doesn't feel that way, so we felt the call to come," says Ms. Young. "We needed to see this hallowed ground where this terrible thing happened, and to pray here."

Up the street, Roger Saunders of the United Kingdom, his guidebook open, stopped to look at Trinity Church, circa 1697, where Washington worshiped as president. "This is probably the safest place in the world," he says, pointing to all the National Guard troops and police. Originally from Belfast, Northern Ireland, he says he doesn't mind the show of force. "You just have to get back to normal."

That normalcy will return, assures Carl Weisbrod, president of the Alliance of Downtown New York. He foresees the day when the armed guards will leave and the area will shine once more as the financial core of the city and the nation. "We have an opportunity to make it not only as good as it was," he says, "but to make it even better."