NEW YORK -- It's a world-class case of what goes around comes
around. Wall Street demanded corporate America desert many workers,
plants and places in the drive to cut costs. Now similar trends have
spurred a flock of the nation's premier financial firms to desert
A steady exodus of banks, brokerage houses and insurance companies
in recent years has left the capital of capitalism struggling at the
very moment the economic system it epitomizes is sweeping the planet.
The departures have become so substantial that they are forcing
the skyscraper-packed district to attempt an improbable makeover --
from peerless address of the financial elite to funky enclave for
artists and high-tech entrepreneurs.
New Yorkers insist the change will not weaken the city's claim to
being America's economic epicenter. But they admit it is unlikely
that Wall Street will ever again have the deep ties to the financial
industry that once ruled the southern tip of Manhattan and, from it,
much of the nation.
"Now you have to say it's New York City that's the financial
center because it is no longer Wall Street," acknowledged Robert R.
Douglass, former vice chairman of Chase Manhattan Bank, which, until
its recent merger with Chemical Bank, was headquartered in the
financial district. "Wall Street was once the place you physically
had to be if you were in the business.
"That's not so anymore."
In its struggle, Wall Street differs from many other major
American downtowns, perhaps especially Boston's. While virtually all
suffered from the overbuilding of the 1980s, most are snapping back
Boston now boasts an office vacancy rate of only 9.8 percent, down
from almost 20 percent at the start of the decade, according to
Cushman & Wakefield, a national real estate firm. New York's other
business center, Midtown, has a rate of 12.2 percent, down from a
high of about 18 percent.
By contrast, vacancies at the heart of the financial district, the
area from Broadway to the East River and Liberty Street to the tip of
Manhattan, remain stubbornly stuck at around 25 percent. (Real estate
experts generally consider anything over 10 percent unhealthy.)
But what compells attention is not the bare statistics but the
nature of the economic forces at work in the financial district. For
the story of modern-day Wall Street contains all the elements that
both fascinate and frighten Americans about their economy -- a new
communications technology that pulls the world closer together, but
also frees companies to move whereever they please; an intensifying
competition that produces new products, but also dissolves old
loyalties -- even when they are to capitalism's hometown.
"It's like the New England mills," said William Rudin, whose
family owns five buildings in lower Manhattan. "Our office buildings
are like factories. The financial industry slowed down so we've had
to find other uses" for them.
To be sure, Wall Street is a long way from becoming a Lowell or
Lawrence, industrial towns that have struggled with only partial
success to remake themselves after their main industries left.
Still, Wall Street's problems are huge and humbling, especially
because many of them are directly or indirectly of its own making.
Some financial district buildings like 60 Broad St., a short
distance from the New York Stock Exchange, are monuments to the
excesses of the Eighties.
The 39-story tower was home to the investment house of Drexel
Burnham Lambert before its 1990 collapse following the racketeering
indictment of its star, junk-bond king Michael Milken. It is now
empty. A 30-story, Rudin-owned building across the street at 55
Broad, which also housed the company's operations, recently began
catering to small information technology firms and is about half