Liberty Plaza back in business

Kevin Ray, executive managing director of Bank of Nova Scotia's U.S. operations, had a bird's-eye view of the horrific events of Sept. 11.

He was in his office on the 26th floor of One Liberty Plaza, directly across the street from the World Trade Center in New York's financial district, when the first airplane smashed into the center's north tower.

"A lot of debris was falling," he recalled. "First it was heavy metal and pieces of glass, then millions of pieces of paper like a ticker-tape parade, except about 10 per cent of it was on fire."

As he and a group of colleagues watched the fire and smoke spewing out of the tower, a ceiling tile smashed against his window before landing on a ledge outside. "We jumped about 10 feet," he said. "It was going through the air like a frisbee."

Liberty Plaza, owned by Toronto-based Brookfield Properties Corp., was one of 16 office buildings damaged in the devastating terrorist attacks that reduced the Trade Center's twin towers to rubble. It was officially reopened Oct. 24, but the building's occupants have been slow to return. Scotiabank is one of many large tenants that have not decided yet when to go back.

The building's posh offices are home to several prestigious tenants, including Scotiabank and Royal Bank of Canada -- two of Canada's biggest banks -- as well as the Nasdaq Stock Market and law firm Cleary Gottlieb Steen & Hamilton.

Other Canadian companies with offices in the area are CIBC,which had 2,000 employees working across the street in One World Financial Center, and TD Waterhouse Group Inc., the on-line brokerage arm of Toronto-Dominion Bank, which had 18 employees in the Trade Center's South Tower, all of whom were safely evacuated.

Bank of Montreal is the only major Canadian Bank without employees in the area -- its New York offices are in Midtown Manhattan. It was also the only Canadian bank to lose an employee in the disaster. David Barkway, who worked in Toronto, was visiting a client in the Trade Center when the terrorists struck.

Liberty Plaza's displaced tenants are grappling with much more than just a straightforward business issue in deciding whether or not to ask employees to work next to the ruins of the Trade Center.

Brookfield has much at stake in the outcome of that process. It also owns three of the four buildings in the World Financial Center complex in Lower Manhattan, ranking it one of the area's biggest landlords.

Industry observers praise Brookfield for quickly getting its office buildings that were damaged in the attacks back up and running. In Liberty Plaza alone, the company had to replace 650 broken windows.

"But nobody's going to be able to force tenants back sooner than they want to come," one real estate analyst said.

Some tenants -- a group that includes Scotiabank and Royal Bank -- have the luxury of taking their time, thanks to a weakened economy that has freed up plenty of office space elsewhere. Others have decided to move out of the stricken area.

Tenants that have returned fall into two categories: Those that had no alternatives; and those with deep ties to the downtown neighbourhood. Law firm Cleary Gottlieb Steen & Hamilton, the tower's biggest tenant with seven full floors, moved its 1,100 employees back into Liberty Plaza in early December.

Many of the firm's employees have a special attachment to downtown, said partner Michael Ryan, who has worked his entire 28-year career in the area. "This is our community and we helped bring it back."

The firm helped employees prepare to come back by having them visit the office several times in rotating shifts of 20. It also provided employees with free lunch in the firm's cafeteria the first week as well as a $100 (U.S.) gift certificate for merchants in the area and chocolates from a local candy maker. Three months after Sept. 11, evidence of the terrorist attacks at Ground Zero is everywhere: The mangled remains of the 110-storey twin towers that once dominated the neighbourhood, the extra security checkpoints, the subway stops that no longer exist, the closed-off streets and construction barricades, the American flag draped over the side of a dump truck clearing away rubble.

Liberty Plaza, a 54-storey gleaming black tower, stands on the east side of the disaster site. From a boardroom on the tower's 38th floor, Yolanda Cartusciello, Cleary Gottlieb's director of marketing, has a clear view of the devastation below.

"I look at this and I count my blessings," she said. "I've been doing this for a while. It's not the same as being on the ground."

As she walks over to the other side of the 38th floor, she has a panoramic view of two of the city's most famous landmarks, the Statue of Liberty and Ellis Island.

"If you look this way, you wouldn't even know anything had happened." Brookfield executives overcame huge obstacles to get Liberty Plaza ready for tenants -- the sooner the company could get the building reopened, the sooner it could start collecting rent.

But some industry observers say the company miscalculated the human factors during the initial days, underestimating the extent of people's reluctance to return to the devastated area.

"They really failed to take into account to a great enough degree the human side of the equation," said the real estate analyst, who did not want to be named.

Bruce Flatt, chief executive officer of Brookfield, said executives strove to balance the interests of those tenants that didn't want to return with those that wanted to get back in right away. Many tenants were effectively out of business because they did not have backup sites to go to, he said, so the company was trying to provide them with "hard facts" on when they could return.

"The fact is we've lived through this as much as anyone has," he said. Brookfield moved its 65 employees in New York back into the building right after it opened. "We have tried to be as sympathetic and empathetic with everyone as we possibly can. We have a business to run as well." At Royal Bank's brokerage operation in New York, 450 employees worked in Liberty Plaza. Spokesman Paul Wilson said the bank is hopeful that it will eventually end up back in the building, "but this is not something we want to rush into. It's got to be when we are satisfied and our employees are comfortable with the facilities, particularly from an environmental standpoint."

He said Brookfield has done "an outstanding job" rehabilitating the building, but there are still some "issues" about the air quality.

The bank has dispersed its New York employees, all of whom survived the terrorist attacks, to its business resumption site in Long Island City, just outside Manhattan, as well as to offices in Midtown Manhattan and to new premises it has leased in Purchase, N.Y., about an hour's commute from Manhattan.

Both Royal and Scotiabank hired their own experts to evaluate the building from a structural, environmental and heath point of view. They have not yet received the final reports.

"We would never even consider going back in there until we get totally happy that . . . everything is satisfactory or better," Scotiabank's Mr. Ray said. "This is going to be the most crawled over, inspected, tested building around."

Scotiabank plans to hold meetings with its New York employees next month to give them an opportunity to ask questions once the reports are complete.

The bank has 417 employees in New York, including 400 who worked in Liberty Plaza. All of them survived. But one employee, Ed Stajk, lost four relatives in the attacks, including his only brother, a firefighter.

"We haven't got any date written in stone saying: 'We shall move back to One Liberty by such and such a time,' " Mr. Ray said. Leases the bank has for its new premises give it the luxury of time, he said. The attacks initially left Scotiabank homeless. While employees were able to get into the firm's disaster recovery site at 67 Wall Street the day of the attacks -- long enough to determine that the computers and backup systems were in good shape -- the office was off limits the rest of the week because all the streets in Lower Manhattan were closed to the public.

Scotiabank has since leased office space in two other buildings. It has 70 employees at its backup site, just over 100 at 2 Wall St. and 200 in offices in the theatre district at Broadway and 52nd Street.

Mr. Ryan at Cleary Gottlieb said there was never any doubt the firm would return to Liberty Plaza once its own experts determined the area was safe. "Here you get a very vivid sense of New York as a port city, as the city it grew up to be."

Maria Fiorini Ramirez, an economist who narrowly missed getting killed on Sept. 11, also knew her company would return once the building reopened. She was at a meeting on the 55th floor of the Trade Center's south tower at 8:30 that morning. The second plane struck that tower at 9:03.

"I'm grateful I was able to instantly leave and find my way out of the building, and I didn't get hit with anything on the way out," she said.

Ms. Fiorini Ramirez runs an economic and financial consulting firm under her own name. Finding other office space is not that easy for a small company, she said. After the attacks, her dozen employees worked out of Bloomberg's offices in Midtown Manhattan and from their homes. She moved them back to Liberty Plaza shortly after it reopened.

"I do miss the fact that the Trade Center was our daily hangout. I walked through there every day. There are people and places that were part of my routine and there's nothing to replace it." Nasdaq Stock Market officials have not yet decided whether it will return to Liberty Plaza or remain in the Midtown Manhattan offices where employees were relocated after the attacks. It is evaluating alternative locations, primarily around Times Square, spokesman Andrew MacMillan said. "We're actively exploring our options."

Richard Clark, head of Brookfield's U.S. operations, said any tenants not returning are staying away because their business has been hurt by the weakened economy.

"The economy took a nosedive the same time as this tragedy."

Brookfield's office buildings in downtown Manhattan are fully leased with mostly long-term tenants. Even though they are not fully occupied, tenants are contractually obligated to pay the rent.

"We're very positive about the future," Brookfield's Mr. Flatt said.