Bruce Brodoff Communications
Bruce Brodoff Communications
Five years after Sept. 11, downtown N.Y. flourishes
By Erica Duency

With the five-year anniversary of the Sept. 11 terror attacks approaching, neighborhoods around Ground Zero are teeming with restaurant development as high-end operators rush to meet the foodservice needs for a booming population of residents and office workers in Lower Manhattan.

Along with attractive sales prospects from a growing customer base, operators are attracted to financial incentives stemming from the city's Lower Manhattan Economic Revitalization Plan, which offers commercial real-estate tax abatement and reduced electricity costs to new area businesses.

Restaurant growth in Lower Manhattan is dominated by upscale, independent concepts, and more than 30 new table-service restaurants have opened in the area since 9/11, according to the Alliance for Downtown New York Inc. The alliance manages the Downtown-Lower Manhattan Business Improvement District, defined as the area south of Chambers Street and between the East River and the Hudson River.

Neighborhoods covered in the Downtown Alliance's jurisdiction include the World Trade Center area, the Financial District, Battery Park City and Fulton Street.

Other organizations define Lower Manhattan as all neighborhoods below Canal Street, which also includes Chinatown, City Hall and Tribeca.

Lower Manhattan is undergoing A "restaurant renaissance," said Valerie Lewis, vice president of marketing and communications for the Downtown Alliance. Before 9/11, the area was gaining steam as a restaurant destination, she noted. After the attacks, "the clock got turned back," she said.

High-profile restaurant closings in the Financial District after 9/11 included the fine-dining Vine, 55 Wall at Regent Wall Street hotel, Wall Street Kitchen & Bar, Divine Bar and American Park at the Battery.

"In the last 18 months, we've seen a number of new ones come on--many are high-end restaurants targeting the high-end residential properties and offices," Lewis said.

The Downtown Alliance said 93 table service restaurants were operating in Lower Manhattan in the second quarter of 2006. So far this year, notable openings have included Harry's Steak and Harry's Cafe P.J.Clarke's, and Trinity Place. New additions to the dining scene from 2005 included Adrienne's Pizza Bar, Merchants New York Cafe, Baluchi's, Flames Steakhouse, Buon Amid, and Bobby Van's Steakhouse.

The organization doesn't track quick-service restaurants because "they come and go so quickly," Lewis said.

Restaurants under construction in the area include Zen Palate Cafe, a new concept from three-unit Zen Palate Restaurant Group in New York, and Haru Sushi, owned by Miami, Fla.-based Benihana Inc.

Lower Manhattan has become the fastest-growing residential community in New York City, according to the Downtown Alliance. In the period since 9/11, housing stock in the area has grown 38 percent, to more than 5,800 units. The unit increase translates to about 10,200 new residents during the past five years. An additional 4,700 units are currently under construction.

Meanwhile, office occupancies have shot up, with 1.3 million square feet of office space leased in the first six months of 2006, according to the Downtown Alliance. Correspondingly, vacancy rates among office properties in Lower Manhattan dropped to 11.2 percent as of the 2006 second quarter ended June 30, from a five-year high of 13.7 percent in the fourth quarter of 2004.

Currently, there are 210,000 private-sector employees working in Lower Manhattan, and 90,000 public-sector employees, according to data from the Downtown Alliance. There also are about 37,000 residents.

In June, the Lower Manhattan Development Corp.--the joint state-city planning and development corporation charged with rebuilding Lower Manhattan -- approved revised designs for the Freedom Tower, and now says it expects the complex to be ready for occupancy in 2012. The building will be 1,362 feet tall, the height of the original World Trade Center South Tower, and contain 2.6 million square feet of office, retail and restaurant space.

The Poulakakos family, longtime restaurant operators in the Financial District, opened Harry's Steak and Harry's Cafe in 2006, adding to their collection of eateries on the South Street corridor, which includes Bayard's, Ulysses, Adrienne's Pizza Bar and Financier Patisserie. The family recently started construction nearby on another restaurant, a 24-hour diner.

"I remember Stone Street just being a derelict area" a decade ago, said Bruce Brodoff, director of public affairs for the Downtown Alliance. "Now it's one of the hottest restaurant destinations in the city."

Harry Poulakakos opened his first restaurant in the area, Harry's of Hanover Square, in 1972, and ran the restaurant until it closed in2003."[Sept. 11] was devastating for all the businesses down here," Poulakakos said. Compounding that tragedy was the death of his wife a year later. Since then, Poulakakos' son, Peter, has assumed ownership responsibilities.

Harry Poulakakos said he has been pleased with the transformation of the area in the years since 9/11. "I have a lot of faith in the area," he said. "Things are getting better and better. And there are a lot of residents now, so we're active seven days a week."

The resurgence of restaurants and retail go hand in hand, Brodoff noted. Area shopping is dominated by the World Financial Center to the west, South Street Seaport to the east, and the Broadway corridor in the center.

In the past year, the Financial District alone has seen the entry of several new high-end retailers including BMW, Hermes, Hickey Freeman and Tiffany's.

Nearby, in the Fulton Street neighborhood, a new residential development and restoration project involving 14 buildings on Front Street and Peck Slip has made available 13 new ground floor retail spaces. Restaurants in the complex include the pan-Latino eatery Salud!, the Italian restaurant Carmine's and a gastropub called Stella Maris.

The average retail rent in Lower Manhattan is about $90 per square foot, according to Brodoff. Retail rent in other areas, like midtown, can be hundreds of dollars per square foot, he noted. Incentives for opening businesses in the area include commercial rent tax exemptions and abatements, sales tax exemptions for build-out costs for commercial businesses, and reduced electricity costs.

Those incentives were attractive to restaurateur Jason O'Brien and his partners, who opened Trinity Place earlier this year in a building one block away from the World Trade Center site. The 120-seat upscale American restaurant is located in a former Wall Street bank vault. "There's no question that there's a real resurgence happening down here," O'Brien said. "Business has been fantastic -- we're doing better than we anticipated."

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