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Lower Manhattan's losses
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September 13, 2001: 6:43 p.m. ET
Area suffering from losses in financial service, tourism, and real estate
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NEW YORK (CNNfn) - As the smoke begins to clear from the dual terrorist attacks on New York and life in lower Manhattan inches its way back to a more normal state of affairs, companies are only beginning to calculate what the disaster has meant to them financially. Losses incurred by the securities industries, tourism, small business, and real estate in downtown Manhattan are impossible to calculate accurately, according to sources, but it is fair to say they will likely be in the billions.
On any given day, downtown Manhattan is a bustling city unto itself of hundreds of thousands of people who shuttle in to work or visit Wall Street. Wall Street alone, the heart and soul of the financial district, employs close to 200,000 people, and many more work in the area's retail businesses, tourism and a multitude of small businesses.
Shuttering those industries for days while they regroup from the collapse of the World Trade Center will mean major losses of revenue the companies formerly housed.
Wall St. the heart of lower Manhattan
Financial services and brokerage services are likely to be hardest hit. The sector has largely been shut down since Tuesday morning. Locally, financially services were responsible for $137 billion of New York's total $444.4 billion in output last year, according to a study by the Milken Institute, an economic think tank based in Santa Monica, Calif.
The various exchanges – the New York Stock Exchange, New York Mercantile Exchange, American Stock Exchange, and the Nasdaq – account for trillions of dollars in transactions every year.
On an average day at the Nasdaq, according to the Securities Industries
Association, nearly $20.4 billion trades hands in the year 2000. The New York Stock Exchange produced more than $11 billion worth of business on any given day. More than $945 million changed hands on the American Stock Exchange. The New York Mercantile Exchange said more than $14 billion changes hands there on any given day.
The exchanges have been dark since Tuesday, but will reopen on Monday morning. How the brokerage houses have fared financially from the suspension of trading remains unknown.
"Obviously, it represents a major loss of revenue, but we have no hard and fast figure," said Eddie Reeves, spokesman for Merrill Lynch. Merrill Lynch had most of its downtown staff in the World Financial Center, across the street from the World Trade Center.
Likewise, Lehman Brothers spokesman Bill Ahern said the firm has not begun to assess how much the disruption will cost the company in terms of lost business. By Thursday, however, about 1,000 of the company's 5,000 employees that had worked in three buildings in and around the World Trade Center had been moved to a facility in New Jersey.
In addition to lost revenue, he said, the company has not calculated the cost of moving to new space across the Hudson River.
"The total cost is impossible to calculate at this time," said SIA spokesman Dan Michaelis.
The damage to Wall Street's infrastructure, too, has yet to be fully determined. Phone service remains spotty after 200,000 of the 500,000 phone lines that connected lower Manhattan with the rest of the world were wiped out.
Verizon Communications has started working on restoring phone and high-speed data service to the area, but the process is both lengthy and treacherous. Peter Thonis, spokesman for Verizon, said the company has given top priority to restoring full phone service to the New York Stock Exchange so that it can reopen on Monday. About 20 percent of the NYSE's data lines and all of its phone connections were lost on Tuesday.
"We're working around the clock," said Thonis. "It will be incremental and will happen in stages. It will take some time before everyone is up."
The area was also home to many large foreign financial institutions, many of whom lost large parts of their U.S. operations. Five South Korean securities firms and 31 Japanese companies had their U.S. operations in the World Trade Center.
Tourism a major driver, too
Wall Street is not only the financial epicenter of the world, it also happens to be, along with Times Square and Greenwich Village, among New York's most popular tourist destinations. Tourism is another major driver of the New York economy. Approximately 38 million tourists came to New York last
year and spent upward of $17 billion. The New York Convention and Visitors Bureau does not know how much of the total tourism dollars come from visits to downtown Manhattan.
Consider the list of destinations and you realize the significance of downtown to New York's tourism market: South Street Seaport, Staten Island Ferry, New York Stock Exchange, Statue of Liberty, Ellis Island.
More than 800,000 people visit the New York Stock Exchange in a given year. The Statue of Liberty and Ellis Island have more than that many visitors in a month. More than 5.5 million people visited the island monuments in New York Harbor during 2000, according to the National Parks Service.
"The tourism dollars are clearly a very important part of downtown," said Nancy Ploeger, executive director of the Manhattan Chamber of Commerce.
Many visitors also had put a trip to the World Trade Center, to wine and dine and admire the sweeping views from Windows on the World, high on their itinerary when they came to New York. Aside from regular employees, about 100,000 people visited the towers on a daily basis.
Wrenching real estate losses
Perhaps the most obvious loss, as the devastating photos of ripped buildings constantly remind, is the loss of real estate in lower Manhattan.
The twin towers alone housed nearly 10 million square feet of prime real estate and were worth well into the billions. Developer Larry Silverstein and his partners purchased a 99-year lease on the World Trade Center in July for $3.2 billion.
In addition to the 110-story twin towers, another 47-story building that was also part of the complex collapsed hours after the tallest towers in the Manhattan skyline were leveled. On Thursday, rescue workers were shuttled out of the nearby American Express building in the World Financial Center complex when it was believed that it too was about to fall.
The New York City Fire Department has not yet had a chance to assess the extent of the damage that was done to buildings surrounding the World Trade Center. That takes a back seat to cleanup and rescue missions. But it is clear the losses there are already in the billions. 
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