Location: About the bids for the West Side rail yards—how did you approach designing the future of this 26-acre site?
Mr. Clark: Once or twice a century, you get an opportunity to participate in a development that is so important to the future of the city, and the Hudson Yards project, in our view, is a project like that. We figured that this project should become a modern-day benchmark, and effectively all eyes will be on it worldwide. … If you look around New York City, there’s a lot of very important projects and architectural statements, but architecture has evolved, and New York City hasn’t necessarily had the opportunity to evolve with it, and this, I think, is the first major opportunity to do that.
You seemed to get a lot of high-profile architects. Was there something of a scramble between you and the other four firms bidding for the yards?
We got everybody on our team that we wanted. We were not rejected by anybody.
Does it bother you at all that your competitor, Stephen Ross of the Related Companies, is trying to woo your tenant, Dow Jones and The Wall Street Journal, from the World Financial Center to his project, should he win?
Although when it comes to architects, we didn’t place a call to someone who was locked up, I did place a call to Dow Jones and found out that they had already been working with Related. … We didn’t really put a premium on having a tenant at this particular moment—our first office building in our scheme comes online in 2015—so that’s effectively eight or nine years away. We have plenty of time to do that.
This is a large amount of office space in one area. Do you think the city can stand to build not only a new business district on the West Side, but also one around Pennsylvania Station?
I do. … I think it’s just sort of intuitive that this is the next place to expand the business district. When you look, there’s roughly 27 million square feet in that whole zone—probably half of which is residential, half of which is office—so round numbers, call it 14 million square feet for a second. In a 400 million-square-feet Manhattan office market, it’s really nothing. It’s just a drop in the bucket.
You’ve got more than seven million square feet here at the World Financial Center in Battery Park City—how much vacancy did you have right after Sept. 11?
Legal vacancy was virtually none, because we had long-term contractual leases in place. A number of those tenants, though, did vacate Lower Manhattan. Probably, I’m just going to guess at this number, it was probably in the 40 percent ballpark—some temporarily, some permanently.
Where did you think the company was headed shortly after the attacks?
No doubt there was a lot of concern on the part of investors—I think our stock went down 50 percent at the time. … We knew we were in great shape, we knew Lower Manhattan would recover, but we also knew we had a lot of work to do.
With the World Trade Center towers, how do you view them? Are you viewing the Silverstein properties and the Freedom Tower as competitors?
At some level, for sure. Other than the Merrill Lynch situation, we’re locked up on a long-term basis downtown, as far as our portfolio goes. We have a clear advantage of having a lower basis [cost] than the World Trade Center, so we do have an economic advantage.
Do you expect to be competing for the same types of tenants?
I’m sure that anybody that would come look at the World Financial Center would come look at the World Trade Center too—and I like our position in our equation.
In that you offer something of a discount because the space is older?
Number one, there’s the value proposition. Number two, this is a world-class complex. We currently have about 200,000 square feet of retail and other amenities within the complex, and we intend to redevelop that in the future and actually double that.
Merrill [Lynch] has almost three million square feet that they occupy in the World Financial Center—can you talk about what you’ve offered them to stay?
Can you talk about the process?
The truth is, at the moment, we don’t really know where we are. Obviously, Merrill Lynch has a new chief executive officer who starts here in a couple of weeks—I imagine this is one of his top priorities, to figure out what the long-term space plan is for the company.
And a tougher market could be working in your favor potentially, given that moving to midtown would be the costliest option?
We were confident all along that we had by far the most economical alternatives for Merrill, and that scenario hasn’t changed. If anything, it’s gotten better, but sometimes businesses make decisions not purely based on economics.
Should Merrill leave, it’s going to be a very large chunk of space to fill, right next to four mostly empty towers across the street at the World Trade Center site. How are you approaching that?
There’s obviously been a lot of press over the last several months about what Merrill might or might not do, with the speculation leaning on the Merrill-moving-to-midtown side. I can tell you that the phone actually was ringing a lot, [from] those that are in different industries than Merrill, but also ones that are in the same industry—they were inquiring about whether they could move from midtown to downtown and effectively cut in half their occupancy costs. I like our prospects.
Still, it’s a challenge, is it not?
It’s somewhat of a challenge. Again, I like our cards—we’re happy to own the World Financial Center.
Larry Silverstein—do you think he’d have a tougher time filling his towers than you would filling Merrill’s space?
I guess I would say, if I was given the choice of owning our real estate than the real estate across the street, I’d own our real estate.
What’s the status of your plans to develop a large site on Ninth Avenue just west of Penn Station?
We’re just working through the details on a couple of different alternatives. The site at the moment looks most likely like it will be a two-building office complex, roughly five million rentable square feet, with a grand covered public space in between the two buildings. A variation on that scheme is, we might include a hotel/residential building on the southwest portion of the site.
Would you build the commercial on spec, or would you want an anchor tenant?
The current thinking—the smallest building on the property is about 1.8 million square feet. That’s a very sizable building to do on spec, so most likely we would look to land an office tenant.
In early 2001, you put in a bid for the World Trade Center tower
s, losing out to Larry Silverstein. How would things be different today had you won that?
Thank God I don’t have to think about that.
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