It was a foggy Tuesday morning, early in October, and Mr. Walentas wore jeans, a hoodie and black New Balance sneakers, his face covered in at least a day's worth of reddish stubble.

In an industry where reliance on other people's money is so routine that the commodity is referred to as simply OPM, the Walentases have invested upward of $100 million of their personal wealth in the $600 million, 921-apartment project in the still underdeveloped edges of Hell's Kitchen, three long blocks from the nearest subway.

"It is very rare for developers to contribute tens of millions of their own funds--there are only a handful of developers I know of in this era who can and do reach that deep," said David Schechtman, a principal at Eastern Consolidated. "But they are the exception."

And so it is that Jed Walentas spends his days in a bare-bones office about 100 feet east of the intersection of 53rd Street and 11th Avenue, a workplace drowning in sheaves of building plans, illuminated by fluorescent lights hung by chains from the concrete ceiling.

Clinton Park is noteworthy for more than its size and financial risk. Because of its unusually large, 100,000-square-foot lot, the Walentases had a freer hand than most to be creative. Hence an Enrique Norten-designed building resembling the letter Z, with the lower limb extending along 11th Avenue, rising upward, terrace by landscaped terrace, until reaching the end of the top limb, in the middle of the block, at nearly 30 stories. At the base of the Z, a Mercedes Benz dealership will take up residence in May; the NYPD's mounted unit will follow in a few years (complete with a plate-glass wall so pedestrians can gaze at the horses). 

On the third floor, in the interstices of the Z, there will be luxury amenities, including a pool, a room for sunbathing and, possibly, a tennis bubble and bocce court.

"Twenty-five years ago, people thought Sixth Avenue was way west," Mr. Walentas said. "Morgan Stanley went to Times Square 15 years ago, and everyone was like, 'Oh my God!'"

IN AN INDUSTRY where players compete in macho games of one-upmanship over everything from the prices of their wristwatches to the heights of their skyscrapers, the Walentas family is something of an anomaly. They show little regard for personal appearance--David Walentas, Jed's dad, can frequently be spotted pacing the streets of Dumbo, which he basically birthed, in jeans, white hair madly tussled, demeanor distinctly absentminded. Walentas the Younger shows up to work in similar dress and is even said to attend real estate events without a tie.

The family's laid-back image jibes with their reputation in big real estate: as relatively civilized actors in what is generally understood to be a Hobbesian industry. Writer Kurt Andersen has called David Walentas Dumbo's "enlightened despot."

That descriptor is apt. After arriving in what would be called Dumbo in the 1980s, David Walentas began subsidizing some artists' rents, making the ultimately correct calculation that they would attract wealthier gentrifiers.

Now Jed has largely taken control of the operations of the empire. And while he seems to share his father's development ethos, he has also brought to their firm, Two Trees Management, something of a more down-to-earth bent.

"I started from zero, so getting in the game was tough," said David Walentas, whose Horatio Alger rise took him from Rochester to a Navy scholarship at the University of Virginia. "He started at a different place and had a lot of experience growing up, so the reality is, he's really better and smarter at almost everything than I am, because he should be."

"Jed is more the day-to-day operations of the business, whereas David's got the grand vision and is highly creative," said Asher Abehsera, who has worked at the firm for five years. "So it's kind of a perfect combination."

With that creativity comes a certain kookiness. For his part, Jed, educated at Trinity, Andover and UPenn, has more polish.

"To be really honest, he's so polite," said Doreen Gallo, who, as a leader of the Dumbo Neighborhood Alliance, has locked horns with Jed on countless issues, from his Dock Street project adjacent to the Brooklyn Bridge (now in litigation) to questions of historic preservation. "I've kind of always been glad that he'll hold the door for me and says hello."

Jed expects the first phase of the 11th Avenue development, all 222 apartments, to be occupied by May at a price point of $50 per square foot. The second phase, including nearly 700 apartments, is slated to start construction this summer, pending external financing.

"The far West Side is going to be great," said Mr. Walentas, whose first post-college apartment was a studio he shared with a friend at 48th Street and Eighth Avenue. "We've seen over the last 15, 20, 25 years midtown spreading west, and I think that continuation is sort of inevitable."

drubinstein@observer.com

The Plaza district itself is but a subset of the larger realm that is the midtown office market. Fortune 500 corporations and white-shoe law firms exchange sackfuls of money for 15 years tenancy on a nice floor high up in the midtown skyscraper forest. On the flip side is the downtown market, south of Chambers Street, where smaller-time firms have traditionally hunkered in drafty, prewar digs near Wall Street, and which has struggled to overcome first the recession in the early '90s; then Sept. 11; then the recession after that; and then the recession after that.

"In today's world, people prefer midtown to downtown," said Dale Schlather, chair of the New York chapter of real estate group CoreNet Global and a broker at Cushman & Wakefield. "The main reason for that is people who are commuting into Grand Central station don't want to go all the way down there."

Such has historically been the power balance in the New York City office market. Far-fetched as this may seem, some real estate professionals predict that in 20 years, the balance will tilt in the other direction. Condé Nast is close to signing a lease for 1 million square feet in One World Trade Center (the former Freedom Tower), the anchor of a redevelopment project that looks like it might finally be on track; a project that will bring 10 million square feet of high-quality office space to an aging Manhattan office market; in a location surrounded by ever-more-successful residential neighborhoods in Brooklyn, New Jersey, downtown Manhattan and the Financial District itself; in a city whose center of gravity continues to shift southward. Some real estate professionals go so far as to predict that Lower Manhattan could become the new Plaza district, the most sought-after office market in the city, and by extension, the nation.

"Literally, we were talking about this in my office last week," said Thomas Wright, executive director of the Regional Plan Association. "There's a real possibility that at some point, its high-end offerings are going to be considered the most attractive."

BY 2030, MAYOR Bloomberg will no longer be the mayor of New York City, Governor Cuomo will have come and gone and the World Trade Center development will presumably be complete. That completion will represent more than just a long-delayed victory over terrorism, bureaucratic bungling, construction hold-ups, and a terrible real estate market. It will also, arguably, represent the largest injection of new office space into the Manhattan market since the last time the World Trade Center opened, in 1972, with 10 million square feet.

In a Manhattan office market of 450 million square feet, that's something of a proverbial drop in the bucket. And it may, like its predecessor in 1972, have some initial trouble finding tenants in a real estate market that is suffering for lack of demand.

But the new towers will have a major edge over time for one simple, compelling reason: They will be new. Right now, as in most downtowns, the average New York office building is about 60 years old, compared to an average of about 30 years in suburbs nationally, according to CBRE Econometric Advisors. New means office buildings with better light, greener features, better air circulation and fewer columns interrupting workflow. Those who can afford them generally choose them.

"If floors have a forest of columns, you are governed by the architecture," said Mary Ann Tighe, CEO of CBRE's tristate region and chairman of the Real Estate Board of New York, adding that tenants also put a premium on good light and air. "Where are you going to get that? In a building with punch windows that was built in the '60s and '70s, where basically the air gets re-circulated like you were on a long airplane flight all day?"

Larry Silverstein put it another way: "Let me tell you, we are spending about $20 billion. When you spend that kind of money, you do magnificent office buildings! World class in every regard! Iconic! With well-recognized architects! So the design is spectacular."

As Lower Manhattan is reborn, the central midtown market ages, with few major development sites left: the lot of the former Drake Hotel at Park Avenue and 56th street; Boston Properties' 250 West 55th Street; the Hotel Pennsylvania; and maybe the Roosevelt Hotel. The only looming rival for downtown could be the far West Side, which theoretically has a similar amount of square feet in the pipeline, assuming Moynihan Station and Brookfield's Manhattan West project move forward. (Mayor Bloomberg cut a very ceremonial ribbon on Moynihan's only fully funded portion this Monday - the expansion of a couple underground concourses.) And even then, the West Side will have only one subway line, to the Financial District's 13.

The final harbinger of Lower Manhattan's rise: the residential resurgence in surrounding neighborhoods, a resurgence that has pumped up property values in Soho, the West Village, Hoboken, Jersey City, Brooklyn Heights, Park Slope, Dumbo, Carroll Gardens, Boerum Hill, Fort Greene and the Financial District itself, and made Tribeca even more expensive than the Upper East Side.

"At the time of the Plaza district's emergence, the Upper East Side and the, if you will, southern portion of the West Side were really the most prestigious places to live in the city," Ms. Tighe said. "A number of these new emerging neighborhoods, whether Chelsea, the meatpacking district or the West Village, and parts of Brooklyn, are now the most prestigious places to live."

Mr. Schlather made a corollary argument for the larger executive set.

"Right now, the decision makers in all the big companies tend to be boomers," Mr. Schlather said. "The boomers were an urban-moving-to-suburban society. They tend to live in Westchester and Connecticut and therefore must commute to Grand Central Station.

"Gen X and Gen Y are more sustainable. They don't want to commute an hour. It's just not the way they want to spend their lives," he continued. "They're becoming a more urbanized culture. And New York is becoming more suburbanized. You've got Home Depot, Costco, all the amenities that used to be reserved for the suburbs. They want to live in Brooklyn, Hoboken, Chelsea, Tribeca, Soho and the Lower East Side, not in Westchester and Connecticut. Transportation from these areas to downtown is actually easier than to midtown. So when the decision makers are the next generations, it is likely that the importance of Grand Central to the decision makers will decrease relative to today. Advantage, downtown."

Further, one could argue that, with the media company agglomeration in Hudson Square, the Whitney's planned move downtown and even a 92 Street Y in Tribeca, the city's entire center is drifting southward.

None of this even takes into account the impact of Sheldon Silver, who, with his "Marshall Plan" of rent subsidies at the World Trade Center and tax breaks for downtown tenants (along with hundreds of millions in direct state aid), is effectively helping pave the streets with gold--something that doesn't become clear until they're done paving in 2015 or so.

Ms. Tighe declined to discuss any aspect of her client Condé Nast's leasing negotiations for space at One World Trade, nor would Condé Nast comment as to the role that its workforce location--which we imagine has a healthy presence downtown and in Brooklyn--played in its desire to move to Lower Manhattan.

But consider where the tops of the mastheads live. Graydon Carter: West Village. Anna Wintour: West Village. Stefano Tonchi: West Village. Brandon Holley: Red Hook.

"It's going to go through," asserted Larry Silverstein, of the Condé Nast deal at One World Trade. "They want it, the Port wants to get it done, Condé Nast wants to get it done. They signed a letter of intent. I see no reason it shouldn't happen. Is it a harbinger? The first of many."

Mr. Wright, of the Regional Plan Association, sees Condé's imminent move downtown as a harbinger, too.

"In other words, what Condé did to Times Square is potentially what they can do to Lower Manhattan," Mr. Wright said, referring to Condé's move in 1996 to 4 Times Square, a move that helped kick-start the transformation of Times Square into Disneyland.

"What happens when the World Trade Center site is done?" said Mr. Schlather. "There will be a beautiful new transportation center, a beautiful memorial park, an arts center and a ton of new retail space to support the 50,000 or so workers who will be located there . And that blight of a hole is filled. All of a sudden that area, in the end, will be beautiful."

drubinstein@observer.com

When Kathleen Parker, foil to Eliot Spitzer on CNN, wrote an op-ed in the Sept. 29 Washington Post about her displeasure with her recent move to New York City--the "rules for potted plants on an apartment terrace"; "a building ban on lighting birthday candles"--Manhattan media meted out a swift punishment.

The Awl encouraged her to move to Westchester. Gawker derided her "whining." Had she spent more than three weeks here before unleashing her displeasure, maybe Ms. Parker would have had the requisite time to learn an important lesson: One does not publicly castigate New York City in New York City, particularly as a newcomer.

"It's like someone telling you, 'Here's your dream and the emperor has no clothes,'" said John Falk, a writer and lifelong New Yorker who recently moved to Pittsburgh. "If you're kind of derisive about it, it's causing you to question your whole game plan."

Of course, most New Yorkers know what's rough about their city, and could empathize with Ms. Parker, who must suffer this town for the sake of her ambition. It sometimes seems that the only pastime occupying more New Yorkers' minds, besides bragging about New York, is fantasizing about getting out.

Yet, they won't--or can't. The recession has left the city more of an archipelago than ever, as opportunities recede elsewhere and strand its professional and creative classes, who remain acutely aware of what they're giving up to give their best years to New York.

[Planning Your Escape? The Top Ten Alternatives to New York]

"I came here with this kind of idealistic conception of New York," said Angela, 27, who works in a big publishing house and lives in Astoria. "That lasted for a good year and a half to two years, and then suddenly the high cost of living started to set in; my friends elsewhere started getting married and buying houses."

And certain things about New York just began striking her as sad.

"Like two years ago, I was coming home, and outside on the sidewalk there was this little adorable chubby kid, and he was making a snow angel on the sidewalk in like two inches of snow and it just broke my heart," Angela said. "This is wrong, you're making a snow angel on public sidewalk property! You should have a yard. I don't think ultimately if I ever do want a family I can do this. ... I will probably have to switch careers to do that. That's probably going to happen."

Jeremy Smerd, a 36-year-old Park Slope resident and reporter at Crain's New York Business, likes New York plenty, but he never imagined he'd stay here after he graduated from journalism school seven years back.

"I think we're all sort of bound to some degree by the bad economy, limiting our choices," Mr. Smerd said. "I did not think I was going to stay in New York. I thought I was going to go to a smaller place and start at a small newspaper. But it was right around that time newspapers started tanking. I ended up staying in New York and ... I think I've had an up-and-down career--not a linear trajectory, where you go from a small to a medium to a large newspaper. But I'm happy where I'm at right now, so that's good."

The conventional wisdom is that these pros are here because they choose to be: because they picked professions that find their apotheoses in New York, like media, publishing, finance, real estate, certain types of law. When the pace, the limitations, the expense, the loneliness sets in, you're free to leave.

Unless you're not. When you've reached a certain point, what other city will have you? A $400,000 house with two acres in Decatur sounds lovely, but where's the demand for a $300,000-a-year banker there? (And it's not just a hunch, either--New York really is a solid place to ride out the recession: More than 10 percent of new private-sector jobs created in the U.S. this year have been here.)

"Being that I don't have a lot of financial backing yet, being that I'm young, New York is really the only place where I can leverage my relationships to do that," said Jack Heaney, a 31-year-old Brooklynite and aspiring real estate developer, originally from Chicago. "My experience is that if you're creative and a bit of a hustler and hard worker, serious people will take you seriously here. They'll listen to you.

"That kind of opportunity is unique to New York. And that experience is reinforced even more in a bad economy."

And then there's Sally, a 31-year-old commercial production executive from the U.K., who would love to live in a place that offers more peace, more nature, less stress, more community. But in this economy, she just can't see divorcing herself from such a good job in the one profession she knows.

"It sounds totally corny, but the older I get, I would prefer to be somewhere quieter, with more nature," she said. "There's a lot of pressure here, you know. But my job doesn't really translate anywhere else. It does in L.A. or London, but you don't make as good money as you do in New York. But it's hard in this economy to walk away from a really good position that other people would really die for."

IN EARLY 2010, Science magazine published an academic study of happiness in the United States that found New York State residents to be the unhappiest, vying for the honor with New Jersey and Connecticut. (Residents of Louisiana and Hawaii, were, according to the survey, the happiest in the nation. Bully for them.)

Much as New York boosters like Mayor Bloomberg, Gawker and Marty Markowitz may protest, living in New York these days can be a problematic proposition.

"There are lots and lots of good things and bad things about New York," said Andrew Oswald, an economist and one of the study's authors, on Monday. "But the key fact is that wages are high; people earn a lot of money there. An economist like me would say that's to compensate them for the difficulties of living in the state of New York or the city of New York. Think of the congestion of New York from an Englishman's point of view, the noise and crowding."

(Mr. Oswald is an Englishman.)

"Thirty thousand a year, you can definitely get by on that in Vermont," he added. "In New York, that probably doesn't buy you a great standard of living."

There are countless reasons for reasonable people to reasonably conclude that New York is, at the very least, a difficult place to live without a trust fund: the far-beyond-reach housing prices; the claustrophobic skyscrapers; the dirty sidewalks; the gum-spattered subways; the self-importance; the loneliness; the crowding; the Bloombergian homogenization of once disparate neighborhoods; the oceans of ambition and accompanying cut-throat behavior; the precious interest in food; the smell in August; the gray slush in winter; the dreary days in between; the paucity of marriageable men; the preponderance of lights from jets flying low over South Slope tenements; the scarcity of stars; the ubiquity of "stars." On and on ...

Perhaps it's a matter, then, of not how could the professional and creative classes leave this wonderful place behind--rather, how could they eventually not?

"A lot of my writer friends keep places in New York City, because the idea was to get there, get in the publishing world, and then they hate it," Mr. Falk said. "And to sort of pull their troops back and move upstate and have no connection to New York City or, God forbid, move to Oregon. It's a defeat. So you'll put up with a lot.

"In Pittsburgh, suddenly I'm hanging out with neurosurgeons and computer robotics Ph.D.'s from around the world," he said. "There's this whole world outside of New York. It's like that New Yorker cartoon. I was just blinded by it."

drubinstein@observer.com

But, because Mr. Krugman is Mr. Krugman, he also takes a more macro view of the decision. His argument? This is just one more example of how the United States is recklessly allowing its most important infrastructure to deteriorate: "By refusing to pay for essential investment, politicians are both perpetuating unemployment and sacrificing long-run growth."

Read the whole screed here. 

This morning's comes care of India's NDTV. In a nutshell, vacancy rates are still rising, skyscrapers still remain incomplete, and purchasers of units in those incomplete towers are still unable to get their money back.

Here's a snippet:

Apartment buyers who made down payments for property construction cannot find what is happening with their money, these people said. Bank loans held on undelivered property often cannot be forfeited, and borrowers have had to pay higher interest rates even as banks have not let them walk away from the mortgages.

"The rules of the game are definitely opaque here," said an investor who has bought several properties in Dubai and who insisted on anonymity because of delicate talks with developers and regulators. "In the United States, I would know my legal position much more clearly and could take actions if necessary."

Read the whole thing here.

Well, Vans, the popular West Coast purveyor of checkered canvas slip-ons is trying to change all that. The Wall Street Journal reports that the firm is on Oct. 16 opening a private skateboard park called the "House of Vans" in Greenpoint:

[It's]part of a broader strategy to beef up Vans's presence in New York and the East Coast.

"Brooklyn is one of the best Vans strongholds outside of California," says Doug Palladini, Vans vice president of marketing. "As big as Vans has become, we're still really only known in a few key spots outside of California."

The 24,000-square-foot warehouse will be closed to the public, and will be used primarily by skateboarders endorsed by Vans. In addition, the space will be used by Vans to host events for retail shops, magazines and artists.

But while "you can't just show up," Mr. Palladini said there will be occasional chances-a special event through a local skate shop, for instance-for outsiders to get inside the park and roll around. He declined to say how much the company is spending on the facility.

More here.

Still, for all these problems, this apartment's a dandy with plenty of selling points. It boasts views of the East River, two fireplaces, five and a half baths, and a fountain courtyard. Downsides are the inconvenient location and lethargic neighborhood. Now if you can just brave the infamous co-op board...

SLIDESHOW: 435 East 52nd Street 4E/5E

realestate@observer.com

In yet another example of life's little injustices, two former Deutsche Bank executives who made fortunes lubricating the real estate juggernaut have just landed plum gigs at LNR Property.

The Journal's Lingling Wei reports:

Justin Kennedy, ex-head trader of real-estate securities at Deutsche Bank, and Toby Cobb, former co-head of the bank's U.S. commercial-property lending business, are joining LNR after the firm recapitalized its balance sheet this summer by issuing $417 million in new equity to a group including Vornado Realty Trust, iStar Financial Inc., Cerberus Capital Management LP and Oaktree Capital Management LP.

...The moves by Messrs. Kennedy and Cobb are the latest example of big-name investment bankers and traders who helped finance the commercial real-estate boom moving into new jobs in which they are hoping to make money off the industry's distress. Jon Vaccaro, who built Deutsche Bank's commercial-real-estate lending business over the past decade recently has joined Lewis Ranieri, the pioneer of the home-mortgage-bond market, to form a new venture aimed at advising lenders and property owners on working out maturing commercial property debt.

Read the whole rather depressing article here.

Trade mag Hedge Fund Alert reports that Ms. Macklowe (profiled by Irina Aleksander in the Observer last year) is ditching the hedge fund business for fashion: "Specifically, she plans to start a fashion-related company and make seed investments in other fashion businesses."

Ms. Macklowe, wife of Billy Macklowe (profiled in the Observer last week) and daughter-in-law to Harry Macklowe, is known for her love of fashion. As she told Irina:

"You see all these amazing things on the runway, and very few people have the guts to wear them," Ms. Macklowe said. "Anyone can wear something that's safe, but you have to have a certain amount of courage to ... like one year I wore a Zac Posen dress to the CFDAs. It was all one piece of yarn in little pieces and I actually hit the worst-dressed list somewhere!"

The project would do the following: 

Named "Access to the Region's Core," or A.R.C., the project would build a new tunnel under the Hudson River connecting New York City and northern New Jersey, allowing 80,000 new riders to gush into Manhattan every day to work in its offices. Lots of new train service to north Jersey suburbs would offer a one-seat ride to Manhattan-bound commuters in places like Passaic, Paterson, North Hackensack and Teterboro, increasing property values in these towns by a total of $18 billion, according to a study by the Regional Plan Association. New planned office towers in Manhattan, like the massive new office building Steve Roth's Vornado Realty Trust wants to build right next to Penn Station, and buildings planned for a platform above the West Side Railyards, would be injected with adrenaline in a sagging economy. Commuters would get a less crowded ride, and ever-growing Amtrak could fit more trains (for a few years) into at-capacity Penn Station. All at a cost of about $8.7 billion.

Despite the project's obvious benefits, despite the fact that ground has already been broken on the tunnel, and despite a lot of funding already allocated, Mr. Christie is likely to shelve the project and use the funds to address the state's crippling debt.

As Eliot Brown, late of The Observer, explains:

[C]hristie had no great incentive to push for something that was not going to be his legacy project: He was not at that North Bergen groundbreaking, and, with a ribbon cutting targeted somewhere around 2018, he would not be there for the completion.

And the consituents in New York that would benefit from the project are not among Christie's voters; their own New York politicians are in no place to criticize, given that they have not put up money of their own.

If Christie pulls the plug, the best advocates for the project could hope for is a delay. But its rare for the existing funding on a project to remain intact through years of such delay. And that would probably be the end of A.R.C. With $600 million already spent on the project and the federal government having earmarked $3 billion to help with the costs, it's hard to imagine when the region will be able to round up that kind of money again, then redraft the plan, go through years of construction, and put a spade in the ground, for real this time.

Read it here.