Commercial Breaks

High-powered law firm Paul, Weiss, Rifkind, Wharton & Garrison is in negotiations with Vornado Realty Trust for more than one-third of the tower planned for atop the Port Authority bus station, a move that, if cemented, would extend the legal establishment’s apparently inexorable drift westward from the white-shoe stronghold of midtown.

A source close to the negotiations confirmed that Paul, Weiss is in serious, though early, negotiations to take 500,000 square feet in the middle of the 42-story building slated to rise from a platform atop the seedy bus terminal.  read more »

The largest tenant in the GM Building is relocating a portion of its operations from the gilded midtown tower to the decidedly humbler environs of downtown Brooklyn.

Weil, Gotshal & Manges, a global law firm with a New York staff of 1,300, has signed a lease for 35,000 square feet at Brooklyn’s 15 Metrotech Center, owned by Forest City Ratner.

The firm now leases 500,000 square feet in the GM Building, most of which doesn’t come up for renewal until around 2020. But a small portion of that space—between 10,000 and 15,000 square feet—is coming up for renewal soon, and the firm has decided to pass.

Price is a big factor. The asking rent for renewal at the GM Building was $120 a square foot. Class A space in downtown Brooklyn is typically priced between $30 and $35.

“In terms of our expansion, we thought this was one place where we would be able to both realize efficiencies in real estate, pay less rent than the GM Building and at the same time show our commitment to New York City and provide a pleasant place to work,” said Phil Rosen, co-head of Weil’s national real estate practice.

“This is exciting,” Mr. Rosen added. ”We’re the first global law firm to take space in Brooklyn. And we’re the first major Manhattan law firm to take space in Brooklyn.”

The firm’s information systems, finance and operations units will be housed in the building, which is also home to the Downtown Brooklyn Partnership, the economic development group charged with revitalizing the long beleaguered neighborhood.

Wellpoint, represented by Glenn Markman and John Cefaly of Cushman & Wakefield, subleased the space long term to the law firm, which was represented by Kirk Killian of Partners National.

The trading floor at the new Bank of America tower at One Bryant Park got partially busy on Monday, three days after the building’s developer secured a temporary certificate of occupancy for Manhattan’s newest trophy tower.

Three hundred Bank of America associates from its global corporate and investment arm began relocating to the trading floor of the crystalline horizon-scratcher, which the bank co-owns with developer the Durst Organization. Ultimately, a staff of 4,000 will work there.

Bank of America is consolidating its operations within 1.6 million square feet of space at the 54-story skyscraper, on Sixth Avenue, between 42nd and 43rd streets. Right now, many associates trade from scattered offices in buildings like 9 and 40 West 57th Street.

Four years after construction began, only the 37th floor remains unleased in the new top-tier tower, which, however temporarily, is the city’s second-tallest. Tenants include law firm Akin Gump, Al Gore’s Generation Investment and Durst’s offices.

The building will have an official opening, complete with the hoopla appropriate to the rise of a new Manhattan trophy, sometime next year.

For now, much work still remains to be done (the 51st floor doesn’t even have walls yet).

Even so, John Yiannacopoulos, a spokesman for Bank of America, said the associates were stoked about their new digs.

“It’s a remarkable building,” Mr. Yiannacopoulos said. “Suffice it to say that the associates are really excited to move into a tower that’s environmentally friendly and really the first of its kind in the nation.”

Where’s Harry Macklowe?

Has the once mighty real estate titan taken a wind-powered voyage on his sailboat, Unfurled, to some mysterious locale still untouched by rumors of his catastrophic fall from the acme of Manhattan real estate?

More likely, he’s in a well-appointed office in one of his manifold trophy buildings, hammering out some sort of ingenious deal to save himself from his $7 billion worth of debt, and to retain some stake in his beloved of beloveds, the GM Building.

Filtering through the layers of speculation surrounding Mr. Macklowe is akin to finding Waldo in his red-and-white-striped cartoon universe. Especially since the developer has kept his dealings close beneath his (metaphorical) red-and-white-striped hat.

“No update,” said his spokesman, Steve Solomon.

Of course, that hasn’t kept real estate types from speculating. As the saying goes, nature abhors a vacuum.

“At every meeting I attend, we start the discussion by talking about Macklowe,” said Eric Michael Anton, the executive managing director of Eastern Consolidated. “Everyone’s talking about it all day long. But I’m amazed by how little is spilling out.”

Just remember, a mere four months ago, real estate types were fixated on the marketing of Mr. Macklowe’s prized GM Building—the striped marble trophy at 767 Fifth Avenue that he bought in 2003 for what was then an astonishing $1.4 billion. Last year, in what was at the time considered a brilliant move, Mr. Macklowe used the GM Building as collateral in his $7 billion purchase of the seven-tower Equity Office Portfolio, which includes Worldwide Plaza at 825 Eighth Avenue; 1301 Avenue of the Americas; Park Avenue Tower at 65 East 55th Street; 527 Madison Avenue; 1540 Broadway; 850 Third Avenue; and Tower 56 at 126 East 56th Street.

But then Mr. Macklowe got sideswiped by that cursed credit crisis. He wasn’t able to get an equity partner or refinancing to help repay his lenders.

A source familiar with the negotiations set the stage for us:

“In the face of a market that is crumbling, Macklowe is visibly under duress, because he’s in the papers all the time and the banks will wipe him out. There is blood in the water.” Next Page >

Developers now have an extra month to prepare their bids for one of the last soft sites in Times Square—303 West 42nd Street.

Thomas Simmonds, the project manager of the site, said the sellers pushed the deadline back from April 30 to May 30 “unofficially,” thanks to the enormous interest in the space.

But would-be bidders, beware: no cheapskates allowed. The sellers, we’re told, are not interested in bids of less than $400 a buildable square foot.

“We would not even consider $300 to $400 a square foot,” said Mr. Simmonds. “We’ve been offered a lot more.”

Mr. Simmonds estimated the lot has nearly 300,000 buildable square feet, which means the owners don’t plan on turning it over for less than $120 million.

He’s confident the owners, identified as 303 West 42nd Street LLC and 300 West 43rd Street LLC, will get that which they seek, since, as Mr. Simmonds put it, “Every major real estate developer in New York has expressed an interest in doing something with this property.”

But Eric Michael Anton, executive managing director of Eastern Consolidated, was dubious.

“It’s probably worth $400 a foot, if you are a superstrong developer with a plan and a flag, and you have the money,” Mr. Anton said. “But in the market right now, land may still be very expensive, but the reality is nobody is selling, because no one has the financing [to buy].”

Mr. Anton also pointed out that the site is “an awkward development project” because the sellers don’t own the Duane Reade drug store bordered by two wings of the property. That segment is owned by a Jeff Sutton partnership.

“I think it will be tough to sell, and I don’t think it will happen so fast,” Mr. Anton said.

The site is actually a combination of two properties—303 West 42nd, a 12-story apartment and office building; and 300 West 43rd Street, the Times Square Arts Center.

It’s also home to Show World, a miniature version of onetime porn impresario Richard Basciano’s legendarily spic-and-span smut shop, once described as “the McDonald’s of the sex industry,” complete with a stripper carousel.

Mr. Simmonds declined to link the trust selling the site to Mr. Basciano, but PropertyShark did it for him, listing Mr. Basciano’s name on top of the location’s “billing address.” Next Page >

Hard Rock, of Hard Rock Cafe fame, and SL Green Reality Corp. have together submitted a bid to run the Aqueduct Racetrack, the Queens running ground that has, over the years, been run into the ground.

Rock ’n’ roll and horse racing: it’s an unlikely marriage that just might work.

Just think of all the great rock songs that have been written about the magnificent beast: Bob Dylan’s “New Pony” (“She broke her leg and needed shooting/ I swear it hurt me more than it could ever have/ hurted her”), the Rolling Stones’ “Wild Horses” (“Wild horses couldn’t drag me away”).

Here’s how the plan from Hard Rock and SL Green, the largest commercial landlord in the city, would work:

If, in two weeks’ time, the state chooses SL Green and Hard Rock’s bid, the firms will build a gaming floor with 4,500 slot machines, rendering the race track a “racino.”

With the substantial revenues generated by the legalized gambling den (accessible via the A train), Hard Rock might build a Hard Rock hotel “designed to 4-Diamond standards, [with] restaurants, a spa and fitness center, Hard Rock’s legendary pool experience and a display that would showcase some of Hard Rock’s most valuable music memorabilia; an Aqueduct Entertainment Complex [with] nighttime entertainment and high-end retail and outlet shops; and a Hard Rock Live Entertainment venue.”

According to Morgan Hook, a spokesman for Governor Paterson, the state received two other proposals, including one from Capital Play Limited, with partners Extell Development, Mohegan Sun and Plainfield Asset Management; and another from Aqueduct Gaming LLC, with principals Delaware North Companies Gaming and Entertainment and Saratoga Harness Racing.

“The governor’s office and representatives of the [Senate] Majority Leader and the [House] Speaker expect to evaluate these proposals over the next two weeks and award the franchise once the review has been completed and an agreement among the parties has been reached,” said Mr. Hook in a statement.

John Lee, spokesman for the New York Racing Association, which from its headquarters at the Aqueduct also operates the Saratoga and Belmont Park tracks, said the organization was stoked.

“We’re in the final stages of finalizing our franchise agreement with the state,” Mr. Lee said. “We’re about to emerge from bankruptcy. Things are looking up, and the [slot machines] will give us some capital to improve all three [of our] facilities, and help us increase the purse structure—the money the horses run for.”

“Obviously, we’re looking for a good partner,” Mr. Lee added. “We’re going to be roommates sharing the same building.” Next Page >

Letters to the editor in The Economist may run under the anachronistic and patriarchal greeting “Sir,” but The Economist is no media dinosaur. Exhibit A: Its New York presence, like Alvy Singer’s universe, is expanding. The Economist, sir, is on the commercial real estate market.

“Our lease is up in 2010,” said Paul Rossi, the publisher for the Americas of the weekly magazine, which is perhaps the only publication in the world to give readers a detailed rundown of the political situation in every earthly corner, from Suriname to The Gambia to Good Old America, and to do so with a wry sense of humor (yes, obviously, this reporter is a fan).

“We’re investigating our options,” Mr. Rossi said. “At the moment, we’re in the very early stages.”

The Economist has hired GVA Williams’ Richard Charkham to find 100,000 square feet of space, a step up from the 70,000 square feet the magazine now occupies at 111 West 57th Street, between Sixth and Seventh avenues, a building whose ground floor, mezzanine and basement house the Steinway showroom.

Why the extra space?

“We are expanding across all of our business units,” said Mr. Rossi. His current office houses 250 employees.

And where, exactly, might The Economist relocate?

“We’re looking at all of our options, and one of our options is to look very far downtown,” Mr. Rossi said. “But we’re also mindful of where our staff lives. I think in reality we’re looking from midtown to midtown south. I don’t think we’re going much further. But never say never.”

Don’t worry. We won’t.

In possibly related (and possibly unrelated) news, Steinway Musical Instruments Inc., which signed a 99-year land-lease for the entire 111 West 57th Street building in 1999, and the owner of the land underneath, are still negotiating the sale of the property to Starwood Capital, eight months after the New York Post first reported the possible sale.

Julie Theriault, a spokeswoman for Steinway Musical Instruments, which owns piano maker Steinway & Sons, declined to confirm whether Starwood Capital was the likely buyer (though another source close to the negotiations did). But she didn’t deny the presence of negotiations, which she pointed out are quite complicated, thanks to the presence of three parties instead of the typical two.

“That’s one of the reasons it has taken so long,” Ms. Theriault said.

CB Richard Ellis is representing both the landowner, Wexford Management LLC, and Steinway in the discussions.

If the sale does finally go through, pianists needn’t worry that they’ll have to travel to Paramus or Westport to hunt for their Long Island City-crafted instruments.

“If that transaction went through, we’d actually remain in our retail space,” Ms. Theriault said.

And that, sir, is brilliant. Next Page >

There’s really no need to travel to other First World countries at all anymore—unless, of course, you’re interested in architecture and landscape and other such trifles.

Hakkasan, the restaurant Time Out London called “a hidden Narnia of Oriental other-worldliness,” is scouting Manhattan locations for its first New World eatery. Britain’s Topshop and Topman, the clothier with well-publicized plans to open a flagship here this fall, is already hunting for several more sites. Britain’s Pret a Manger, with 14 outlets already, is planning a major expansion. Ditto that for Japan’s Muji.

Newmark Knight Frank Retail’s Jeffrey Roseman, for one, sees a trend. And he has a theory or two.

“The reality is, and it’s sort of bizarre, but New York and the U.S. have been an unbelievable kept secret from the international retailers,” Mr. Roseman said. “I don’t think they really thought of it until some companies blazed a trail. You know, H&M came over and it’s just done great. Zara and Uniqlo have done great. It’s unbelievable exposure as well.”

Of course, much as the retailers may deny it, the weak dollar can’t hurt either. Nor, for that matter, can the lessening of domestic competition.

Could this be the second wave of international retailers storming Manhattan?

Mr. Roseman was kind enough to quantify it for us:

“Five of every 10 clients inquiring about locations are international retailers from Europe and Asia that are new to the city,” said Mr. Roseman. “In 2005, it was more like two out of 10.”

Karen Bellantoni, executive vice president at retail brokerage Robert K. Futterman, recounted a similar trend: “I’m definitely seeing a lot of leases getting signed today with a lot of international clients.

“They’re finding they’ve got money to spend, and what’s better than New York real estate?”

Ka-ching!

Foreign retailers, perhaps because they’re treading stateside now, gave more diplomatic reasons for their sudden spurt of new growth.

“We already trade the brands with franchise partners in 30 countries worldwide, and this is more part of a strategic plan to move Topshop and Topman toward becoming global brands,” said Tania Foster-Brown, a spokeswoman for Topshop and Topman, which will open a four-floor flagship store in October at 478 Broadway. “Sir Philip Green and the team are looking at opening one or two further stores in New York City over the coming months, as and when the right sites come up.”

Hiroyoshi Azami, president of the beloved high-design shop Muji USA, said he plans to open six to eight more stores—that’s in addition to a new Soho location and his planned flagship shop at The New York Times building. But not because of the advantageous exchange rate.

“Just because [the] U.S. dollar is weaker than [the] Japanese yen, it does not mean our expansion will accelerate,” Mr. Azami said. “We are thinking of our expansion according to how much consumers will react in N.Y.C.”

Sacha Turner, business development manager at Pret a Manger, said she planned to open eight more locations in 2008 (twice as many as she opened last year).

“It’s kind of become a new thing that all of these stores are coming over here,” Ms. Turner said. “A lot of cities are becoming more international, and a lot of restaurants can take advantage of that, and they can expand. And the world is becoming more international, isn’t it?” Next Page >

News Corp. has leased a huge chunk of space at 1185 Avenue of the Americas, right next to its headquarters. Perhaps to make room for the arrival of the Wall Street Journal in Midtown?

Since News Corp. Chairman Rupert Murdoch purchased The Journal in December, he has reportedly discussed moving The Journal’s newsroom from the World Financial Center to Midtown by 2009.

It was unclear exactly how Mr. Murdoch would fit the newsroom into his headquarters, between 47th and 48th streets, which is already at capacity.

The deal, announced on Tuesday, would seem to answer that question. News America Incorporated, the American business arm of News Corp., signed a 12-year lease for 83,822 square feet on floors 25 through 27 at 1185 Avenue of the Americas, bringing that building’s capacity to 99 percent.

David Levinson and David Berkey of L & L Holding Company LLC represented News Corp. in the deal. SL Green, which owns the building, was represented in-house by its executive vice president, Howard Tenenbaum, and its managing director, Gary Rosen. Next Page >

Newsweek may be reconsidering its long-planned move from midtown Manhattan to 100 Church Street, following months of negotiations.

“Newsweek did go out and look at some alternative stuff,” according to a well-placed source. “They still are focused on 100 Church, but the market has shifted a bit, and they still wanted to see what else is out there.”

“They’re a cost-conscious tenant,” the source added.

The fact that Newsweek is still shopping around nearly three months after its intent to move into 100 Church Street was reported as a done deal is a startling about-face.

In early February, sources reported that a lease was out for Newsweek to take 200,000 square feet at the building, owned by Alex Sapir. The lease was expected to be signed within a few weeks.

The impending move was newsworthy not just because of the size of the deal, but also because Newsweek had been based in midtown Manhattan for decades, first at 444 Madison Avenue and then at 1175 Broadway, both of which came to be known, in turn, as “the Newsweek Building.”

But from a financial standpoint, the pending move made sense. Asking rents for available space at 100 Church run from $48 a square foot to $75 per square foot on the 21st story, the top floor, according to mrofficespace.com. That’s quite a discount from midtown-Manhattan-size rents, which regularly hover near and even exceed $100 a square foot.

Newsweek remaining in its current digs is probably not an option. Not only does the magazine’s lease expire sometime this year, but Newsweek Building owner Joseph Moinian is planning a radical renovation, complete with a name change to “3 Columbus Circle” and, presumably, a corresponding rent hike.

Newsweek’s broker did not respond to requests for comment, and magazine spokeswoman Jan Angilella would only say, “[W]e are looking at several places, and Church Street is one of them.”

Mr. Sapir also declined comment. Next Page >

Looks like it’s haggle-time in midtown commercial real estate.

Class A office space has become, believe it or not, more negotiable, with tenants finagling more rent-free months and bigger allowances to improve their spaces, according to a new analysis by Jones Lang LaSalle.

“With the regular Class A population, tenants appear to be negotiating better concessions and more of a discount,” said Cynthia Wasserberger, a senior vice president at the firm.

Ms. Wasserberger analyzed 10 Class A deals completed in the last quarter of 2007 and the first of 2008, together comprising 822,200 square feet in midtown Manhattan buildings like 1633 Broadway, 909 Third Avenue and 340 Madison Avenue.

During negotiations for these leases, tenants convinced landlords to give them an average of seven months free rent and $43 per square foot for improvements to their office space.

That’s quite an improvement over 2007, when landlords only gave midtown Class A tenants a paltry $27.15 per square foot and just 3.5 months of free rent.

In these 10 recent deals, tenants were also able to negotiate starting rents 9 percent below the original asking rent.

“We can see without question that concessions have shown a considerable increase,” said Ms. Wasserberger.

The stats don’t surprise Mark Weiss, an executive vice president with Newmark Knight Frank, who said that “effective prices have fallen in the past three months by 10 percent” for Class A commercial space.

“That means slightly lower rent, slightly more work and slightly more free rent,” said Mr. Weiss. “However, they’re still 10 percent or 20 percent more expensive than they were a year ago. Rents have another 10 percent to fall.”

Yet, it’s not all footloose and rent-free for high-end tenants.

Lessees in so-called “trophy” properties—i.e., towers like the Solow building at 9 West 57th Street and the steel-and-green-granite cloud-buster at 590 Madison Avenue—aren’t having as much success on the negotiation front.

Such buildings remain impenetrable to any but the über-elite, or, as Wasserberger politely phrased it, “the price-insensitive.”

After analyzing 14 deals totaling 673,000 square feet in trophy properties, Ms. Wasserberger determined that tenants won an average of five months of free rent, as compared to 3.7 months in 2007; and $34.61 per square foot to make improvements, in contrast to $29.84 per square foot the year prior.

Tenants only convinced property owners to negotiate a starting rent about 6.5 percent below the original asking rent.

“With a limited amount of space and tenants desiring good presence, view and light commensurate with how they would like their firm perceived, that part of the market is still very resilient,” said Ms. Wasserberger. “Really, the trophy market is out of equilibrium since the vacancy is so low.”

More meaningful is the increasing size of the concession packages in Class A space.

As Ms. Wasserberger put it, “The concession packages are the first thing to change when the market starts to change.” Next Page >

The apocalyptically minded once foretold a Manhattan lined with virtually nothing but banks. Chase banks. Citibanks. Astoria Federal Savings. That their dire predictions only came partially true (rather than entirely true) we can attribute, at least partly, to the credit crisis.

But it isn’t mom-and-pops that are swooping in to fill the vacuum.

“Drugstores are really taking spaces that formerly the banks were taking,” said Faith Hope Consolo, chairman of the retail leasing and sales division for Prudential Douglas Elliman. “There is an opportunity in the marketplace, so drugstores are taking a step forward.”

Last month, Steven Durels, executive VP and director of leasing for SL Green Realty Corp., told Crain’s New York Business that “all bank leasing has stopped.” Durels and other sources blamed the development on both the credit crisis and market saturation.

Whatever the root cause, one thing remains clear: Banks are no longer hogging every sizable storefront in New York City.

And that leaves room for you know who.

At 675 Sixth Avenue, for instance, the spot to be vacated by Barnes & Noble come May, Ms. Consolo has received offers from both CVS and Walgreens, but not one from a bank.

Nor has she received any recent offers from banks for the spaces she is marketing at Third Avenue and 62nd Street, Third Avenue and 66th Street, and Broadway near Columbus Circle. Yet, drugstores have expressed interest in all three.

“You have CVS, you have Walgreens,” she said. “Both of those are going head to head.”

Drugstore companies were not particularly forthcoming about their expansion plans, or lack thereof, though Walgreens spokeswoman Tiffani Bruce said that the firm is “certainly looking to build our presence and market share throughout the Northeast, and certainly New York and Manhattan are an important part of that expansion.”

According to Ms. Bruce, the fact that Walgreens is expanding its New York City presence—by fall, its Manhattan locations will grow from nine to 12—has nothing to do with the bank-branch contraction.

But there’s little question that the bank slowdown has, at the very least, made room for other retailers. “I think drugstores have always been in the market, but now they’re finding there’s some more availability,” said Gene Spiegelman, director of Cushman & Wakefield retail services. “Before, we had a generally more aggressive retail environment.”

Likewise, Cory Zelnik, of Zelnik and Company LLC, offered a more moderate prediction of drugstore growth in New York City.

“With the slowing down of bank branch expansion, it will clearly create more opportunities for the drugstores,” Mr. Zelnik said. “But I just don’t know that you will have this overwhelming drugstore proliferation because of this.”

“It will be more than a few new stores,” he continued. “But I don’t know that there will be this massive growth.” Next Page >

Developer Harry Macklowe’s descent from the pinnacle of Manhattan real estate will continue apace April 30, the day bids are due for several of the seven Manhattan towers he bought so spectacularly in February 2007.

Those readying bids for the cloud-busters include many of the same developers who circled Mr. Macklowe’s General Motors Building earlier this year, eager to snatch the choicest jewel from his fallen empire, according to a well-placed source familiar with the bidding process.

Larry Silverstein, who withdrew from bidding on the GM Building, is considering a number of the other Macklowe skyscrapers, including 1301 Avenue of the Americas, the Credit Lyonnais Building, at the corner of 52nd Street.

The portfolio also includes Tower 56, 527 Madison Avenue, Park Avenue Tower, Worldwide Plaza, 1540 Broadway and 850 Third Avenue. It’s unclear who the other bidders are, but the pool of contenders should be a small one.

In contrast to the halcyon days of early ’07, when Macklowe put a mere $50 million (that’s .71 percent) of his own money down for the $7 billion Equity Office Properties portfolio, financiers will be demanding a lot more cash on hand—some say as high as 30 percent. “It’s unlikely these buildings will set any records, except for the GM Building, if it ever gets sold,” said the source.

If, indeed.

Following a flurry of press coverage and two rounds of bidding earlier this year, news on the sale of the GM Building, which Mr. Macklowe used as collateral for the Equity portfolio purchase, has been so quiet you could hear a pin drop from the tower’s 50th floor.

The most recent reports—now nearly two weeks old—indicated that Daily News owner and real estate billionaire Mort Zuckerman was likely the highest bidder.

The GM Building is expected to sell for at least $2.8 billion, not nearly as much as Mr. Macklowe was reportedly hoping for.

The reasons are many. The GM Building, at 767 Fifth Avenue, may be one of New York City’s great capitalist emblems, but its luster has been tarnished by its collection of locked-in, relatively low-rent leases; the sputtering economy; Mr. Macklowe’s apparent insistence on retaining some stake in the building; and ongoing litigation on two fronts.

Not only is the legendarily litigious Sheldon Solow suing Conseco Inc., from whom Mr. Macklowe bought the building, claiming the 2003 sale was invalid, but so is the relatively less well-known real estate investor Leslie Dick.

Mr. Dick, for one, believes litigation is indeed a factor in the delayed sale.

After filing a motion for discovery at the First Department of the Appellate Division of the New York Supreme Court on April 10, Mr. Dick told The Observer, “Buyers understand that the title to the property is really in question.” Next Page >

Governor Paterson is tapping a host of top business executives for a search committee to find new leadership for New York’s development agency, the Empire State Development Corporation.

Sanford Weill, the Wall Street big shot and former chairman of Citigroup, is expected to chair the committee and has taken the lead in its formation, along with Vincent Roberti, a political strategist, Democratic fund-raiser and film financier, according to two people with knowledge of the committee.

(Mr. Paterson’s office had no comment.)

The committee comes as government officials and business executives have criticized the effectiveness of the Empire State Development Corporation.

Governor Spitzer sought reforms during his time in office, some of which were beginning to be implemented, though people who have dealt with ESDC say the leadership structure—with powers divided among the top officials, who clashed with each other—frequently led to conflicting messages.

The downstate ESDC chairman, Patrick Foye, tendered his resignation last month, leaving that position open. It is unclear whether the committee will look to fill that role or perhaps restructure the agency, people familiar with discussions say, though the current structure seems likely to be an early topic of conversation given criticisms.

According to two people familiar with the committee, the names of those asked to participate include Mr. Weill; Mr. Roberti; Fred Wilpon, the Mets co-owner and chairman of Sterling Equities; Anne Mulcahy, CEO of Xerox; real estate titan Jerry Speyer of Tishman Speyer; Ivan Seidenberg, CEO of Verizon; Jeffrey Immelt, CEO of General Electric; and Jean-Pierre Garnier, CEO of GlaxoSmithKline. Next Page >

Some of us get our positive reinforcement from the Oscar committee. Others from the Pulitzer committee. And, in New York, where real estate brokers get about as much respect as, say, newspaper reporters, some of us get it from the Real Estate Board of New York.

On Tuesday evening, after The Observer went to press, REBNY presented its annual Most Ingenious Deal of the Year Awards at the 101 Club on Park Avenue. The Ingenies are, as one real estate insider put it, “something you’ll refer to probably for your entire career.”

The Observer got the award winners’ names in advance of Tuesday evening’s event.

And so the 2008 Ingenie winners, selected from 39 nominees in 21 deals in 2007, are …

Mary Ann Tighe and Gregory Tosko of CB Richard Ellis won first place for “Adding Color to Grey: The Winding Road to Grey Group’s 370,000-square-foot anchor lease at 200 Fifth Avenue.” This year, just as the market was starting to struggle, Ms. Tighe and Mr. Tosko brokered a deal that will move Grey Group, an advertising firm, from its Third Avenue headquarters into the Toy Center building.

Moshe Sukenik and David Noonan of Newmark Knight Frank won second place for “The Land Swap that led to the new Lincoln Square Synagogue,” a sale and leaseback deal that REBNY described as “one of the most complex land assemblages in Manhattan.” The deal will create “the largest new synagogue in Manhattan since Temple Emanu-El in 1927.”

Andrew J. Singer and Kathleen McSharry of the Singer & Bassuk Organization took third place for the finance deal “50 Murray Street.” REBNY said the deal “enables World-Wide Holdings, the ground lessor of 50 Murray Street, to arrange replacement permanent financing for the luxury rental housing development.” Next Page >

The unabashedly gorgeous ground floor of Brooklyn’s tallest building, One Hanson Place, remains empty, despite a more than two-year search for a retail tenant, prompting its owners to ditch brokers mid-stream and start from scratch.

“We were just looking for a different perspective on the space,” said Kristin Neil, the manager for One Hanson Place, the copper-domed 512-foot building, formerly known as the Williamsburgh Savings Bank, purchased by Canyon-Johnson Urban Funds and the Dermot Company in 2005.

The developers have traded Jeffrey Roseman, executive vice president of Newmark Knight Frank Retail, for rival Faith Hope Consolo, chairwoman of the retail leasing and sales division for Prudential Douglas Elliman, who was hired last week.

The 33,000-square-foot space, occupied first by the Williamsburgh Savings Bank and ultimately by HSBC, may well be one of the most stunning spaces in the city, but from a retail standpoint, it has its limitations.

“It’s landmarked both inside and outside,” Mr. Roseman told The Observer. “So it’s much trickier.”

Mr. Roseman, who leased the similarly tricky Bowery Savings Bank on East 42nd Street to Cipriani a decade ago, said the landmarking means that tenants can’t drill in the walls or otherwise alter the space without the approval of the Landmarks Preservation Commission. That poses problems for shelving and signage, among other issues.

“Look, your discount sort of retailers would have a hard time with it,” said Mr. Roseman. “But, we had a deal with Borders the day we put the property on the market.”

That deal fell through after prolonged negotiations.

Now, Ms. Consolo is taking over, and she said she has a vision, or rather, multiple visions for the space, which is being marketed as both a leasable site and as a commercial condo.

“I visualize a big specialty store,” said Ms. Consolo. “It also could be a very important catering group. … It could also be another great restaurant.”

Ms. Consolo’s also mentioned a museum auction house and retailers like Sony and Apple as potential tenants.

One retailer that likely won’t tenant the old banking hall is, ironically, a bank. “All of the banks are trying now to be more retail,” said Mr. Roseman.

Ms. Consolo wouldn’t reveal the asking rent for what is arguably Brooklyn’s finest retail space. But last Mr. Roseman heard, the owners wanted $3 million a year.

Whichever retailer ultimately leases the space, it won’t be lacking for a built-in customer base. Ms. Neil said 80 percent of the building’s 179 condos are sold or under contract, and the building is already 30 percent occupied. The building’s 32,000-square-foot medical suite condo, consisting of 15 doctors offices, is also under contract.

Ms. Neil, for one, is optimistic that a tenant will be found.

“The national retailers are finally understanding that Brooklyn is a large, viable market,” she said. Next Page >

The School of Visual Arts, one of the few institutions of higher learning to both advertise on the subway and maintain its aura of cool, is expanding due west. The school, based on East 23rd Street, has signed a 26-year lease for the former Clearview Chelsea West Cinemas at 333 West 23rd Street, between Eighth and Ninth avenues.

Gene Stavis, who has for 30 years taught film at SVA without the luxury of an actual school-owned movie theater, will direct programming at the two-screen cinema.

“The irony is that we’re preparing thousands of artists every year to face audiences, and we had no way for them to do it at school,” Mr. Stavis said.

Starting this fall, Mr. Stavis will have to find other sources of irony: He will be able to host film festivals and show off student work in disciplines ranging from animation to photography.

“We are going to use it clearly for films, but not primarily for films,” Mr. Stavis said. “This does not fall under any department of the school. It will serve, we hope, as a catalyst to make people from different disciplines work together, as artists are doing around the world these days.”

Mr. Stavis wouldn’t say how much the school is sinking into the renovations of the theater, which will take place during summer break, but he did say the theater will be outfitted with the capacity to project both 70mm film and digital media.

Eminent graphic designer Milton Glaser (who also happens to be the acting chair of the school) and architect Laurence Jones are redesigning the building’s exterior and interior. Both screens in the theater’s two auditoriums will remain.

In a way, the theater has already begun functioning. This week, the school hosted the Gen Art Film Festival. And in May, the theater will host a couple of the school’s end-of-year shows. “Then we’re going to close the place for the summer and do major construction, and look forward to a fall opening,” Mr. Stavis said.

The 800-seat theater, built in 1963, once housed the Roundabout Theatre Company, before changing hands a number of times, ultimately ending up as a Clearview Cinemas, a frequently underused movie house that often handled overflow from the other Clearview Cinemas down the block between Seventh and Eighth avenues.

Clearview was reportedly holding onto the lease until it found someone to take it who wouldn’t steal away patrons.

“This kept out the competition in the neighborhood,” Mr. Jones, the architect, said.

Neil Lipinski, a principal at Colliers ABR, represented the school on the lease. Next Page >

In defiance of elementary supply and demand, commercial rents continue to rise in Manhattan, even as vacancy rates do, too.

Property owners asked an average rent of $67.13 per square foot from January through March for Manhattan commercial spaces from Lower Manhattan to 72nd Street, a 25 percent increase over the same time last year, according to brokerage Cushman & Wakefield. The firm released the numbers at a power breakfast at Michael’s in midtown on Tuesday morning.

Counterintuitively, overall vacancy rates also rose, from 5.7 percent at the end of 2007 to 6.1 percent at the end of the first quarter.

So much for Econ 101.

Brokers on Tuesday morning explained the commercial market’s buoyancy, in part, by pointing to a torrent of foreign cash.

“There’s a lot more international traffic, the most that I’ve seen in my career, from investors both private, public and sovereign wealth funds,” said Scott Latham, executive vice president for the Capital Markets Group for Cushman & Wakefield. “I think we’re at the top of the shopping list, which should bode well for this market.”

In fact, foreign buyers accounted for an astonishing 45 percent of Manhattan’s property purchases in the first quarter—in the first quarter of last year, they accounted for just 3 percent.

And there’s another factor keeping the commercial market afloat.

While vacancy rates have indeed risen amid the changes dealt to the local economy, “we haven’t seen a dramatic dumping of space on the market,” according to Joseph Harbert, the chief operating officer for the New York Metro Region of Cushman & Wakefield. He quickly clarified: “We haven’t seen it yet.” Next Page >

In a hillside bunker in a New Mexico desert two weeks ago, a New York architect peered through a periscope as, about 1,300 feet away, a simulacrum of the Freedom Tower’s exterior was blown up.

“Once the charge was detonated, even from a quarter of a mile away, the entire bunker shook,” said Carl Galioto, a partner at Skidmore, Owings & Merrill, the architecture firm that designed One World Trade Center. The 1,776-foot-tall, spire-topped skyscraper, formerly known as the Freedom Tower, is slated to rise at the northwest corner of Ground Zero by 2012.

“The specimen performed beautifully, far exceeding our expectations,” Mr. Galioto said.

Which is to say that only portions, and not all, of the so-called specimen—a three-story mock-up of the building’s glass-and-aluminum facade—shattered in the isolated desert 90 minutes south of Albuquerque.

Mr. Galioto wouldn’t reveal the strength of the explosive device for security reasons, but said that a Port Authority security consultant and New York City law enforcement officials determined the criteria for the test.

“It is something that, having seen it, having participated in it, certainly raises my confidence in the project,” he said.

“Dynamic” testing—i.e., blowing up materials destined for building exteriors—is not standard operating procedure for skyscrapers. The technique, developed about a decade ago, is generally reserved for the construction of highly sensitive government buildings in foreign countries, like the American embassy that Skidmore, Owings & Merrill built in Beijing.

“But it’s now being applied to [other] buildings,” Mr. Galioto said. In fact, materials intended for another New York City tower—Mr. Galioto wouldn’t name the project, though he did say that his firm wasn’t designing it—were tested at the same laboratory days before the tests for One World Trade Center.

Thankfully, rainstorms and high winds are more commonplace than bombs in New York City, so Benson Industries, the contractor building the glass exterior for the architect, had to make sure the material could handle those environmental pressures, too.

Testing of another mock-up of the glass, which will cover one million square feet of the tower, took months and spanned a continent—wind tunnel tests outside of Toronto; thermal tests in Ontario, Calif.—all to ensure that the future tower can withstand apocalyptic wind speeds of up to 150 miles per hour, deluges of rain the likes of which New York has rarely seen, a low-level earthquake and rapidly changing temperatures.

But none of that compared to the drama of the blast test.

“The only way to reach the exact site was drive by four-wheel-drive vehicles for a number of miles,” Mr. Galioto said. “There was a dirt-and-rock road.” Next Page >

A Lamborghini dealer to the stars is moving his Long Island exotic car business to the ground floor of a new Harlem condo tower this summer, gambling on the cultural cachet of a neighborhood that, even in better economic times, wasn’t exactly Rolls-Royce territory.

Macky Dancy, part owner of Dancy Power Automotive Group, will in June open his exotic car dealership on the ground floor of the Lenox, developer Joe Holland’s new 12-story, red-brick condo building at the corner of 129th Street and Lenox Avenue.

Mr. Dancy will park about a dozen cars in the 11,200-square-foot space, ranging from the Rolls-Royce Phantom Drophead Coupe (priced at an otherworldy $300,000 plus) to the relatively homely Mercedes Benz.

For the sake of comparison, apartments at the Lenox range in price from $813,000 for a two-bedroom (the cost of about two Maybachs) to more than $1 million for a penthouse triplex (or about five Bentleys).

Mr. Dancy, who spoke with The Observer from his white Cadillac Escalade, said he wasn’t concerned that the depressing economic forecast would imperil his investment. “Recession-like times don’t affect my client base,” Mr. Dancy said. “When you’re dealing with the exotic car market, they’re kind of recession-proof.”

He said that client base includes the upper crust of the hip-hop world, from Jennifer Lopez to 50 Cent. Neither of their publicists responded to requests for confirmation.

But one of Mr. Dancy’s partners is Rick Caplan, whose business The New York Times Magazine in 2002 said “customizes exotic cars for rappers like Busta Rhymes, Puffy, Nas and Lil’ Kim.”

Mr. Dancy said he’s been in the exotic auto business for three years, and the car business for 12.

So why Harlem?

“We came up with the idea to start a dealership in Harlem because of its culture,” said Mr. Dancy. “I’m not expecting the guy around the corner to buy a Ferrari from me.”

That’s probably wise, at least according to a gentleman folding clothes on Sunday afternoon at the Clean Rite Center across the street from the future dealership.

“Half the people around here are on public assistance,” said Antony, who declined to give his last name, but identified himself as the laundromat’s assistant manager. “Who around here can afford these cars? Drug dealers?” Next Page >

A plan being considered by the city and state could give rise to a new tower on the World Trade Center site, as officials are pondering a move of the site’s planned Performing Arts Center to the top of the Fulton Street Transit Center nearby.

The Frank Gehry-designed Performing Arts Center-to-be has been the subject of concern in the community, given its far-off completion date (likely after the other buildings on the site are done), and the lack of identified funding sources for the project, which would cost hundreds of millions of dollars.

The Fulton Street Transit Center, a Metropolitan Transportation Authority project that seeks to better connect the numerous subway lines that stop just east of the World Trade Center, has recently encountered major funding hurdles. A grand Grimshaw Architects-designed entrance to the station was determined to cost far more than the M.T.A. had available.

Now, the agency has put money in its capital budget to build a new, if perhaps less glamorous, entrance that would have “an above-ground presence that will meet the community goals, but not the oculus as designed,” according to M.T.A. spokesman Jeremy Soffin. The M.T.A. has a multibillion-dollar funding gap in its capital plan.

According to people familiar with the proposal, the plan being studied by the state and city would put the Performing Arts Center atop the M.T.A. station, and could allow for new development on the currently proposed site of the center, just east of the Freedom Tower. Such a development would likely be used to bring in funds to create the Performing Arts Center, the people said.

Some in Lower Manhattan expressed skepticism about the possible plan, saying it could add more delays, coming on top of years of stalled and slow progress downtown.

“My thought is, they promised this community a long time ago that there would be a Fulton Street Transit hub with a showpiece terminal,” Assembly Speaker Sheldon Silver said in a recent interview. “That’s what should get done.”

A spokesman for the Lower Manhattan Development Corporation, Mike Murphy, said in an e-mail that it would be best to see the iconic vision for the Fulton Street Transit hub become a reality.

“LMDC has been on record saying that the best outcome would be for the M.T.A. to fully fund and build the transit center that has been promised for Lower Manhattan, and that remains our position,” he said. Next Page >

Douglas Durst’s Bank of America Tower is still under construction, but the number of unleased floors in the hotly desired building is growing.

How?

After initially trying to sublease its space, clothing designer Elie Tahari recently worked out a deal with the Durst Organization to give back its lease on the 50th floor, a Durst spokesman confirmed. Tahari had a 15-year lease for about $150 a foot on the floor, and took another floor in its existing building, according to a person familiar with the company’s plans.

Demand has apparently grown for the floor since Tahari signed the lease in early 2007: Now Mr. Durst is asking a whopping $200 a foot for the space, one floor shy of the top, an amount that would come out to just shy of $6 million a year for the more than 29,000-square-foot floor.

Office rents above the $200 mark have only recently entered the Manhattan vocabulary (or the American vocabulary, for that matter), with investor Michael Price signing a lease at 667 Madison Avenue last summer with rents that start below but are to rise past $200 a foot.

The Bank of America Tower at One Bryant Park, one of the only large office towers to rise in recent years, has been fetching rents well above where Mr. Durst originally planned. The building has one other floor left, the 37th floor, where asking rents are at $175 a foot, according to the real estate tracking firm MrOfficeSpace. Next Page >

Looks like the $5.4 billion landlord is having some trouble winning the hearts and minds of some of its residents.

Tishman Speyer, which bought the 11,200-apartment Stuyvesant Town/Peter Cooper Village for that record amount in late 2006, has been pursuing illegal tenants subletting from rent-stabilized tenants for more than a year now, presumably in an attempt to get a better return on its investment. After all, landlords tend to get a whole lot more money from market-rate units than from the rent-regulated ones; and illegal tenants are, well, illegal.

But as tuna fishermen do to dolphins, the firm seems to be catching a whole lot of innocent tenants as they cast a net for illegal sublets, or so claims Councilman Daniel Garodnick, a resident himself of Peter Cooper Village.

“Too many legitimate rent-stabilized tenants are being asked to defend themselves against false accusations that they are not legally entitled to their apartment,” Mr. Garodnick wrote in a letter to Tishman’s president, Rob Speyer, late last month. “The posture toward tenants is increasingly being viewed as radical, and is having a deleterious effect on the community.”

Tishman has been sending rent-stabilized tenants notices of nonrenewal when it comes across records that lead it to believe a tenant could be illegally subletting. Mr. Garodnick, saying such notices were going to too many legal residents, called for a moratorium on the notices. Numbers provided to Mr. Garodnick in October suggest that about 50 percent of those who were sent notices of nonrenewal ultimately gave up their apartments.

“We have no issue with Tishman Speyer preserving its rights, but we don’t want innocent tenants getting swept up in the process,” Mr. Garodnick said in an interview.

A spokesman for Tishman Speyer, Bud Perrone, said the company has been in frequent contact with Mr. Garodnick, and the notices in question only go out when there is evidence to think a tenant is not using the home as his or her primary residence.

“We consider each case carefully and on an individual basis, and only send notices when we have a good-faith belief as to our assertion of nonprimary residence,” Mr. Perrone said in a statement. “Any resident who receives a notice can contact us to discuss it, and we will set up a time to meet and talk about their particular case if a resident wishes.” Next Page >

So just how earnest is the Dolan family in its pledge to keep Madison Square Garden in its place, and abandon a possible move essential to the current Moynihan Station project?

The question will become a crucial one in coming days and weeks, as the countless government agencies, elected officials, advocates, consultants and private developers involved and connected to the redevelopment of Pennsylvania Station, known as Moynihan Station, try to determine their next moves. For now, there seems to be no consensus: Some believe the Garden’s ruling family is bluffing; others hold out hope that they can still be convinced to move.

Last Thursday afternoon, Madison Square Garden called around to reporters to announce that it was proceeding ahead with a renovation of its existing arena, a move that would quash the $2 billion-plus plans to redo Penn Station.

The timing, from a public-relations point of view, was highly effective. Earlier in the day Senator Charles Schumer had called for the Port Authority to rescue the project, though the Dolans grasped the media spotlight with stories that declared the Moynihan plan as near death, at least as currently imagined.

Governor Paterson, busy with a budget, had yet to dive into the project, and with no clear leadership or movement with the plan, the Dolans struck when a less abrasive public reaction toward a renovation was likelier rather than doing so when there appeared to be momentum on the popular project.

The Garden has indicated it had little hope that the complex Moynihan project would ever be able to come together.

Officials involved with the plan are quick to claim that the Garden, chaired by James Dolan, is perhaps jockeying for a better negotiating position. How could the Garden, after all, walk away from a deal where it gets a new arena for one where it pays hundreds of millions to renovate an old one?

But it is not entirely clear how much the Garden would have to gain from posturing. The Garden was not negotiating with the state for any money, though the Dolans had design concerns about the new arena’s entrance.

Even if the Garden is sincere in its commitment to renovate (first announced in 2004), officials and others involved hold out hope that the Dolans can still be lured back to the table for Moynihan. While the extent of the Garden’s plans is not yet clear, any major renovation or expansion would need to go through the city’s seven-month land-use approval process, which could be blocked by the City Council or the mayor. The Garden met with the Department of City Planning about its renovation in 2005, a planning spokeswoman confirmed.

Key in that approval would be Council Speaker Christine Quinn, who was on the same side as the Dolans on the West Side stadium fight. Not so much this time around: She issued a highly critical statement Thursday evening and then berated the Garden in front of television cameras, with the 40-year-old arena in the background. Next Page >

A former psychiatric hospital on the far East Side could be converted into a large hotel, as the Bloomberg administration is considering a transformation of the onetime ward associated with Bellevue Medical Center.

The plan is not the first for the full-block site: Dating back to at least the 1970’s, the city has pledged to redevelop the historic complex bounded by 29th and 30th streets and First Avenue and the F.D.R. Drive, which will soon sit near the planned East River Science Park.

Representatives from the Bloomberg administration told community residents earlier this month of their plans for the site, which involve issuing a request for proposals to turn it into a hotel, according to Community Board 6 chairman Lyle Frank.

Mr. Frank said the board would rather see a medical use, given its location near other hospitals. “It’s just that it should be a medical corridor, so it should stick with the medical,” he said.

A spokesman for the city’s Economic Development Corporation said no decisions have been made and numerous options are being considered. Next Page >

The debate over a proposed new hospital complex for St. Vincent Catholic Medical Centers and the accompanying development of apartments and townhouses is heating up as the plan goes before the city’s Landmarks Preservation Commission for a hearing on Tuesday.

At the center is real estate developer William Rudin, also chairman of the Association for a Better New York, who wants to build the largest residential housing development that the notoriously development-adverse Greenwich Village community has seen in decades. Mr. Rudin and his Rudin Management Co. are key to the project, as St. Vincent’s would sell him its existing site and use the proceeds to help build an $800 million hospital across the street.

More than anything else, Mr. Rudin faces history in the Village—both in the neighborhood’s historic-district restrictions and in its tendency to mount successful opposition campaigns and stop developments it dislikes. Even the ever powerful Robert Moses was handed a major defeat in the Village, which crushed his plans to build a highway through the area.

“Building in New York City is difficult—that’s a given,” Mr. Rudin said. “In the Village, we think that there’s obviously a lot of people who are passionate about their community and feel very strongly about the historic nature.”

Rudin Management Co. would pay St. Vincent’s $310 million for the current site, which would be demolished to make way for the main building of the over 600,000-square-foot development, which tops off at 265 feet. That would make it one of the higher structures in the neighborhood. The hospital would build a new facility across the street that reaches 321 feet, a height that preservationists have opposed.

Preservationists, who have submitted an alternative plan that the hospital has dismissed as unfeasible, say both the Pei Cobb Freed & Partners-designed hospital and the FXFowle-designed residential development are far too out of scale for the historic neighborhood.

“Really, what Rudin is proposing to do wouldn’t even get a second glance were it not for the fact that he’s attached himself to this hospital,” said Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation.

Mr. Berman, whose powerful society has put opposing the hospital project as presented at the top of its agenda, said that the neighborhood has seen some new development in recent years. He also said the area has a strong track record of defeating large projects.

“You’d have a highway going through Washington Square Park, you’d have a highway going through the south Village and Soho; you’d have the entire West Village demolished for slum clearance,” Mr. Berman said of a Village without preservation movements.

Mr. Rudin, who noted that over 3,000 people have joined a group supporting a new St. Vincent’s, defended his plan as architecturally respectful of the neighborhood, and tried to dampen allegations that he was going to make a killing on the deal.

“Look what’s happened in the economy,” Mr. Rudin said. “Everybody thinks we’re going to make all this money. The reality is, who knows what’s going to happen? We’re taking a huge risk.” Next Page >

Years in the making, the battle among the city’s biggest developers for control over the city’s West Side rail yards is now drawing to a close. As of The Observer’s press time Tuesday, the signs seemed to be pointing to the designation of Jerry Speyer’s Tishman Speyer as the victor, though a team of the Durst Organization and Vornado Realty Trust had not been given the pink slip just yet.

But regardless of whichever team ultimately receives the 26-acre yards—likely to get a conditional designation on Wednesday from owner the Metropolitan Transportation Authority, to be followed by a scheduled contract in September—the plans face another layer of scrutiny, as the western half of the site needs to pass the city’s lengthy land-use approval process because of a zoning change essential to development there.

Those who live in the area say there are aspects of the developers’ plans, particularly that of the commercial-heavy Tishman Speyer bid, that they want to see altered. Community opposition almost always yields changes in the approval process, which requires the approval of the City Planning Commission and the City Council.

“This Tishman Speyer proposal, if that’s the land-use plan we’re working on by the time it comes to the community, it’s unlikely that it would be supported by the community,” said Anna Levin, the land-use chairwoman of Community Board 4, who has been closely involved in the rail yards development. “The fact that it’s got such massive commercial density is a big problem,” she said, noting the higher financial risk of building commercial compared with residential.

Working in the developers’ favor is a letter signed by Council Speaker Christine Quinn. Before the state took bids on the yards, she agreed that if the developers followed a set of “design guidelines” crafted with her consultation last year, she would “fully expect to support” the zoning change.

However, the letter is rather vague—“expect to support” is hardly a definitive term, nor is the letter binding—and there is no assurance that the zoning change will reach the City Council before Ms. Quinn is termed out in 2009.

The community board and the borough president will each give nonbinding recommendations about the proposed zoning change, and often their voices influence the decision of the Council. Next Page >

The number of new building permits issued in New York City this January and February was down about 40 percent compared to the same period last year, according to the city’s Department of Buildings.

Building permits, which augur future construction, are a strong indicator of how robust the real estate market is, and the drop-off indicates even New York’s strong market is feeling the effects of the subprime mortgage bust and the tremors it has sent through Wall Street.

The city issued 451 new-building permits in January and February, compared to 764 during those months last year and 859 during the period in 200