Friday, December 31, 2021

The Empty Landscape: New York's Office Towers

Steve Cuozzo asks the question that all serious New Yorkers have been asking. What if the city does not come back? Translated, that means, what if the empty office buildings remain empty? 

Today, New York banks are telling staff that they need not come to work. They can continue working from home. The city, having suffered the most draconian lockdown and distancing regimen, now leads the nation and perhaps the world in per capita Covid cases. Anyone who wants to eat at a restaurant has to show proof of vaccination. Masks may just have been shown to be useless, but people are walking around in them anyway.

For all the medical drama, the larger issue remains: what will become of all the empty office towers.

Cuozzo raises the issue:

We’ve been told that office buildings won’t be vacant forever. Once Omicron recedes, a trickling return to workplaces will swell into a mighty wave. Buildings might not be as full as they were pre-COVID but they’ll be full enough to sustain the city’s great commercial tax base and keep landlords from going broke.

But, what if all the prognosticators are wrong? What if the broken habit of commuting to work is broken for good? Peggy Noonan asked the question and it is worth considering:

But what if we’re all wrong? What happens if scary prognostications by the brilliant Wall Street Journal columnist Peggy Noonan come to pass?

Noonan wrote last February that the pandemic brought about “the collapse of the commuter model … in the past year the owners of great businesses found how much can be done remotely. They hadn’t known that!”

She added that “they don’t have to pay that killer rent for office space anymore. People think it will all snap back when the pandemic is fully over but no, a human habit broke; a new way of operating has begun.”

What if our office towers, the pride of our skyline, turn into towering white elephants?

Dare we mention that a wave of bankruptcies engulfing New York’s commercial real estate will surely damage the banking industry, the one that holds mortgages on all of that property. Surely, it will be in the trillions of dollars.

In truth it is unthinkable, even by those who are in the business of thinking about eventualities:

We posed the issue to urban analysts normally eager to comment on anything from bike lanes to endangered manatees. But not even the oft-quoted Regional Plan Association would touch it. Others whom we reached out to responded to questions we hadn’t asked or changed the subject altogether.

Only the Real Estate Board of New York, the industry trade organization, tackled the more limited issue of how to accelerate conversion of second-class, older office buildings — which REBNY estimated at 220 million square feet, or about 40 percent of the total office stock — to residential use. 

To which one is tempted to reply, why would people pay New York rents if they can work from the suburbs or from Miami. How long before the banking hubs will move to Florida and Texas, and even Alabama.

Anyway, the Real Estate Board has some fanciful ideas, which we will, in the interest of probity, offer up. As it happens, it feels like Cuozzo is being ironic:

Noting the city’s profound housing shortage, REBNY produced a batch of proposals to facilitate large-scale office-to-residential conversions. But they’d require wholesale zoning changes, state-city cooperation to provide tax subsidies, and cultural changes at city agencies such as the departments of Housing Preservation and Development, Buildings, City Planning and Finance.

REBNY wants the City Council to set up a task force to study the options. But until then, we’ll humbly suggest a few possible new future uses for some over-the-hill office properties. Landlords should roll up their sleeves now for a changed future — even if it means replacing office workers with fantasy.

Replacing office workers with fantasy. Hmmm. Will fantasy pay the rent?

Anyway, here are some suggestions, beginning with a museum to commemorate the time when the middle west side was the home to the garment industry:

Take the “Garment District,” which once manufactured most of America’s clothing and is now mainly home to tech, media and smaller financial firms that can’t afford fancier digs. Some buildings were upgraded to contemporary use — but a surprisingly many grimy, prewar structures remain stuck in the 1950s. 

Let’s turn a few of them into something the city has long deserved: a spectacular museum where the once heavily unionized district’s role in New York history and national politics is brought back to life. Show how seamstresses lent the sewing power to clothe America’s women — and why union backing was so important to generations of Democratic candidates. 

To be fair, filling millions of square feet of empty offices with a museum seems a bit unlikely and ironic, to say the least.

But then, the board suggests that we use some of the space as movie sets:

Another option is bringing Hollywood here. Why should Queens monopolize Big Apple film production? The Steiner, Kaufman Astoria and Silvercup studios are wonderful. But a full-scale Manhattan movie and TV complex would be the crown jewel in “Hollywood on the Hudson.”

Of course, film producers are not complete fools. Having to deal with New York taxes and New York labor unions will quickly put the kibosh on plans to expand production in the city.

And then, Cuozzo, who apparently has a good sense of irony, suggests that we turn the empty buildings into amusement parks:

Finally, we can all use some fun. Wow, how we need fun! How about a vast, indoor amusement park, like the enclosed portion of Coney Island’s legendary Steeplechase Park.

Of course the kids’ carousels and other gentle indoor rides would need to give way to the heart-stopping, pulse-pounding thrills of today’s Scream Zone and Phoenix roller coaster. And imagine a Cyclone that can stay open year-round!

The technology’s there and the demand will never abate. All it takes is the vision to make it happen inside one of our 100-year-old, hulking brick-and-mortar Goliaths where office tenants aren’t making landlords rich with $35-a-square-foot leases.

Today is the last day of the calamitous de Blasio mayoralty. If the real estate crisis metastasizes, even our new mayor, Eric Adams, will not be able to stop the bleeding. As for the people who are charged with dealing with the problem-- they don't have a clue.


Anonymous said...

We may find out if those banks are REALLY too big to fail.

Stuart Schneiderman said...


Sam L. said...

"For all the medical drama, the larger issue remains: what will become of all the empty office towers." Great dying city-scapes for movies...