9.11: The Fallout Continues

October 1, 2001 · by Kerry Harding

Design and Construction forums and publications have been asking this question, seeking to better understand not if the terrorist attacks on America will affect their practices but how.

“What does this mean?” Since the last issue, design and construction forums and publications have been asking this question, seeking to better understand not if the terrorist attacks on America will affect their practices but how. In the aftermath, analysts and pundits alike have issued reports and predictions on the immediate and long-term effects on our business. To better understand where the trends are going, DI sifted through nearly a hundred of these to glean clarity and focus as to the key practice areas that will be most effected. It is not a pretty sight.

It's possible, but doubtful that the Twin Towers will be rebuilt as they were. Completed at a cost of $800 million, replacement estimates have varied widely from $3.5 billion to as high as $10 billion. In a recent poll, 67% of the Americans responding felt that the towers should be rebuilt, as they were, at least from the exterior.

Silverstein Properties, the New York developer which had just completed the $1 billion, 99-year master lease with the Port Authority in July, has committed to rebuild and, in fact, has already retained Skidmore Owings & Merrill's David Childs to advise him. Yet, while it's possible that, at least conceptually, planning can begin, cleanup of the site is months away. A more serious impediment is the fact that the Twin Towers themselves were used by Silverstein as collateral to finance the deal which could, depending on the scope of, and speed with which insurance claims are settled, hamper any attempts to actively begin construction.

The way tall buildings are constructed has been changed forever. Construction professionals are considering the development of a model code for supertall buildings which would improve emergency access and egress. Europe has already considered beefing up it structural codes to require buildings to resist progressive collapse, leaving the details up to the 15 European Union nations to fill in the details. Experts will also be looking at fire suppression. There is an aqueous film-forming foam used around aircraft to suppress fuel fires by cutting off air supply. Another idea is composites include fiber-reinforced plastics with fibers made of Kevlar, glass or carbon, bonded together in a matrix of plastic such as polyester or epoxy and coated with fire-resistant coatings. Among the leading proposals is one to envelope the columns and beams of new skyscrapers with special ceramic materials to increase their fire resistance. According to Jianne-Wen Ju, chairman of the Civil and Environmental Engineering Department at UCLA, steel columns resisted very high impacts and even penetrating missile attacks when they were clad in space-age ceramics reinforced with carbon fiber, or surrounded by layers of reinforced concrete. At the same time, windows strengthened with laminated polymer composites did not break and remained transparent. The cost of applying such techniques for civilian high-rise buildings would be approximately 20-30% higher for both the windows and strengthening steel core columns. Many new Asian high-rise towers, constructed after the World Trade Center, are made of new high-performance concrete which, in both stability and fire resistance, is greatly superior to steel.

Despite doomsayers, sky-scrapers as a building type are not dead. In their recent article, "The End of Tall Building," authors James Kuntsler and Nikos Salingaros wrote, "We are convinced that the age of skyscrapers is at an end. It must now be considered an experimental building typology that has failed. Who will ever again feel safe and comfortable working 110 stories above the ground? Or sixty stories? Or even twenty-seven? We predict that no new megatowers will be built, and existing ones are destined to be dismantled. This will lead to a radical transformation of city centers.”

Conversely, British Architect Lord Rogers has called for much of London and other cities to be knocked down and replaced with skyscrapers, saying, “It it wasn’t the World Trade Center it would have been a football stadium.” In England, plans are going forward to towers in seven major cities and the City of London currently has between 15 and 20 pending approval as part of its target that 60% of new building be on previously used land. One of the most prominent is Renzo Piano’s proposed 1,016 ft. tower at London Bridge.

The effect of the tragedy on such projects as Donald Trump’s new Trump Tower Chicago, Ellerbe Beckett’s Kingdom Centre in Saudi Arabia, and KPF's 1,500-plus feet-tall Mori Building in Shanghai, currently in schematic design, is currently unknown. John Harris of Houston-based developer Hines Interests, remarks, “Tenants the world over have indicated they are not cowed by the WTC attacks. We’ve talked to almost every major tenant in the world and the world is calm, normal--outside of Manhattan, we’re seeing absolutely no reaction, no stoppage--everything is going forward.” Everything, except one. Due to economic reasons, the Pritzker family has abandoned plans for Hyatt Center, the 1.25 million-square-foot-skyscraper on Chicago’s Wacker Drive, to have been designed by Lord Norman Foster.

Airline losses will cancel or delay cosmetic-related renovations. In the case of MetroJet, U.S. Air’s now-defunct low cost carrier, all capital projects simply vanished overnight. Airport terminal construc-tion is not likely to be robust, offset perhaps by aggressive security enhancements. A controversial $12 billion, 12,000-page plan to expand Los Angeles International Airport must be redrawn to focus primarily on security and safety. A new airport proposed for the former El Toro Marine Air Station in Orange County, CA is being reevaluated. A proposed hotel complex linked to Denver's Elrey Jeppsen Terminal may not go forward and the operator of Minneapolis-St. Paul International Airport is holding off on $371 mil-lion in improvements to the aging Lindbergh Terminal. Several key terminal renovations are being delayed at Houston’s George Bush Intercontinental Airport. In Ohio, shipping giant DHL Worldwide Express, is slowing construction on a $270-million sorting facility at the Cincinnati International Airport. Perhaps of the biggest casualties in the troubled air travel industry may not even be in the United States. The $500 million Ninoy Aquino International Airport (NAIA) 3 in the Philippines could become a losing proposition if low passenger traffic trend persists. Located at the Villamor Air Base, with 16 aircraft stands and a capacity for 10 million passengers per year, NAIA 3 is slated to be com-pleted next year. Its proponent, the Philippine International Air Terminal Co. Inc. (PIATCO), is building the facility under a Build-Operate-Transfer agreement. PIATCO has already started paying the Philippine government P300 million under a guaranteed payment scheme which enabled it to clinch the bid for the ter-minal. How PIATCO can meet the payments under the present conditions, with international passenger traffic down by 25 percent and air terminal revenues projected to lose over P1 billion this year in the after-math of terrorist attacks in the U.S., remains a big question mark. After the September 11 attack, NAIA has been losing P1.5 million to P2 million a day in foregone terminal fees, parking and other charges. It is the international passenger terminals that are affected the most. Most outgoing traffic are destined for North America but passengers either postponing or canceling their flights.

Much of the temporary exodus from New York City will be permanent. Bethesda-based CoStar Group estimated that the attacks displaced about 650 tenants, 500 of which occupied less than 25,000 sq. feet of space each. While many occupants of the 30 million square feet displaced by the WTC's collapse have turned to Connecticut, New Jersey and the New York suburbs for office space, the Maryland city of Baltimore has become an unexpected destination. Deutsche Banc Alex Brown has transferred nearly 300 employees there, putting them up in area hotels. Local economic development officials have received inquiries from at least ten other companies, based largely on the gap between midtown Manhattan's lease rate of $68 sq. ft. compared to Baltimore's $18.75. Jim Seymour, a real estate analyst for TheStreet.com, says that, for the longer term, he is hearing a new commitment to disperse facilities, staff and systems for more widely that jumping across the harbor—jumping across and around, the country. Much of the financial industry, he believes, will be dispersed to other nascent financial centers -Atlanta, Denver and Cleveland, as well as smaller urban areas with good air connections. Look for smaller and suburban headquarters. Several smaller tenants of the Empire State Building have already said they might soon leave for offices for lower-profile locales. In addition to being less conspicuous, property in the suburbs is typically cheaper than in downtowns and more abundant, so buildings can be set back from the road. After the Oklahoma City bombing, the federal required now requires a 100-foot set-back for federal buildings. Also, large suburban sites offer the opportunity for detached parking garages, which, as the 1993 World Trade Center bombing revealed, can be an important safeguard. Mission critical facilities - data centers, call centers, telecommunication centers, etc., are locating their facilities far away from their headquarters and in multiple locations. J.P. Morgan Chase & Co. had opened operations in Delaware, Florida and Texas.

Telecommuting will transform corporate real estate demand and distribution. For years, faced with traffic-laden commutes, employees have pleaded for the chance to work at home, with only moderate success. The recent terrorist attacks not only gave workers a more powerful argument when many businesses lost key people and documents concentrated in one location, but in the aftermath when workers had no choice but to work from home, proved that they could be equally productive and efficient. Already, employers have reported an upswing in interest from people working at home or nearby telecommuting centers. The Washington, DC area is already home to more than a dozen government-financed telework centers, where employees in the public or private sectors can rent a cubicle for computer-equipped office space for about $25 a day. AT&T, for example, saved $25 million in real estate costs last year by having 11% of its workforce work from home.

New Urbanism as a planning concept gets a big boost. New Urbanism has gained popularity in planning circles as a reaction against the inadequacies of single-use, car-oriented urban and suburban planning. There are about 380 new urbanism projects planned or under construction nationally, with about 130 projects under way on undeveloped land or "greenfields." Should the focus of the city change from that of destination commerce, according to some planners, New Urbanism has some of the solutions that could reintroduce life into formerly dead urban environments.

The Boston Globe reported that a group of architects, planners and critics is promoting the idea of a post-skyscraper urban landscape that resembles Boston's Back Bay, inspired by New Urbanism and the ideas of Jane Jacobs. Alex Krieger, chairman of the department of urban design and planning at Harvard's Graduate School of Design, believes that what makes the most sense is buildings that are environmentally sound, harmonious with their surroundings and tied into public transportation systems.

The paragon is Norman Foster's design for the Commerzbank in Frankfurt, Germany, which has been called the "first ecological skyscraper." Washington Post architectural critic Ben Forgey says, "With its advanced environmental controls, it is a technical marvel; with its four-story office clusters and gardens, it is a model workplace; and with its fine finishes and unusual triangular shape, it is a stunning beauty. The hope is that tall buildings do have a significant role to play in our lives-not as solitary architectural master-pieces, but as parts of the vibrant great cities of the future.

Retailers have abandoned any hope of a rebound. A related casualty has been the newsstands, souvenir shops and other restaurants in airports, many operated by HMSHost. In addition to being shut down in their entirety for several days, not only has business been hurt by passenger reduction, but many objects have had to be removed from the shelves of gift shops that could be used as weapons. A bright spot continues to be Wal-Mart Stores which expects to open roughly 50 new discount stores in U.S., and 180 to 185 new Supercenters. 110 to 115 of the Supercenters will be relocations or expansion of existing discount stores. The company will also add 15 to 20 of its Neighborhood Market concept stores, 50 to 55 Sam's Club domestic clubs, half of which will be relocations or expansions. Wal-Mart International will open 120 to 130 units in existing markets. According to a company spokesman, the planned square footage growth for the coming year represents approxi-mately 46 million square feet of new retail space, which will be the largest square footage increase in the Company's history.

Non-profit projects' already pessimistic outlook worsens. It's one more ripple effect from the terrorist attacks: Not only are many people skittish with their cash as layoffs hit home -- they've also just reached deeply into their hearts and wallets to make donations to the victims of the attacks. Even though more than $500 million dollars has been raised for victim relief, nonprofit organizations could be facing their toughest fundraising era ever. For many, stock market fluctuations determine how generous people are going to be. If individual giving is down, corporate matching donations will follow. In addition, traditionally large gifts from major corporations will be nonexistent in many cases because of internal profit woes. A failure to meet, let alone exceed, operating revenue requirements will delay capital improvement and expansion projects for trade and professional organizations as well as humanitarian, civic and cultural organizations. One major project, Frank Gehry’s proposed $150 million expansion of Washington, DC's Corcoran Museum, is already in jeopardy because of gift reductions by major donors in the dot-com sector.

Hospitality work is injured but not dead. Shortly after the attack, the Kahla Mandarin Oriental hotel in Hawaii canceled ground-breaking for its beachfront restaurant and spa. A little over two weeks after the attack, Marriott put an indefinite hold on all new projects not yet under construction, and, in addition to service workers idled by convention cancellations, is prepared to furlough up to 2,000 from its headquarters staff. Hotelier Wyndham International, the Dallas-based operator of about 240 upscale hotels, is furloughing or laying off approximately 1,600 of its workers. The company has put capital projects on-hold, but will finish work on the Wyndham Newark Airport this year.

In Las Vegas, things have been so bad that comedian Jay Leno held a free show to encourage travel. In addition to being concerned because of financial uncertainty and the lingering fear of air travel, many Americans feel that the pleasure philosophy behind Las Vegas itself is inappropriate, given the mood of the country, and, in some way, disrespectful to those effected by the tragedy. Already, some of the larger destination casinos have had to lay off convention and banquet staff and close of large blocks of rooms to save operating costs.

A related sector which may suffer is the deluxe hotel-affiliated condo market nationwide. Delta Associates reports that there are currently 1,900 such condos in eight cities in the country with another 1,400 planned in 10 cities. With sales stalled at the new Residences at Ritz Carlton in Washington, DC, Millennium Partners, the project's developer, is seriously reconsidering its expansion plans. However, some individual properties in key markets are capitalizing on record low occupancy rates to aggressively push ahead with room renovations.

The effects on state and municipal design and construction budgets are just now being felt. Tax-driven institutional facilities such as schools, fire stations, libraries, corrections and recreational facilities are currently proceeding forward, funded by past tax revenues. Decreased travel is adversely affecting the lodging industry and convention-related business, which, in turn, is depressing a key source of revenue for cities and states. State governments already struggling with a slumping economy and budget shortfalls, are finding that the events of September 11 have pushed them into financial emergencies- prompting massive budget cuts and special legislative sessions. Tennessee has been forced to cut $100 million from state agencies; Illinois, $50 million; Iowa, $108 million and New York anticipates a record $1 billion budget shortfall next year. Florida and Washington, which does not have a state income tax, is dependent on sales taxes to generate much of its budget. With tourism diminished, the financial picture for those states has grown correspondingly bleaker and others will follow suit.

Federal facilities will incorporate long-term protection issues. Immediately following the attacks, site access control measures were put into place at all potential terrorist targets including the National Institutes of Health and the Center for Disease Control, as well as embassies and other federal buildings. Building security measures have been strengthen and access by non-employees- delivery people, custodians, facility consultants, etc-much more scrutinized. With a generous Congress giving The White House everything it has asked for, if not more, look for aggressive spending in beefing up federal facilities against terrorist attacks-particularly in locations with high visibility. One of the first items may be the just-awarded $600 million renovation contract for the remaining four wedges of The Pentagon, which, in addition to repairing the damaged suf-fered by the wedge which was just completed, will require additional reinforcement. Some experts predict that this could bump the contract's value to as high as $1 billion.

The biggest dilemma facing those who predict the future is that there are no prophets, only analysts. Companies such as CMD Group, Standard & Poors and McGraw-Hill, draw together the best and the brightest in the fields of design, construction, real estate and finance to, based on their experiences, look at how past circumstances have historically effected future outcomes. When looking to draw parallels to the events of September 11, the examples cited include the Great Chicago Fire, the San Francisco Earthquake and the bombing of Pearl Harbor. From a technology perspective, the United States and the world at large as changed so enormously since then that any lessons learned from those events are no longer relative. However, the events of September 11 put us, as the expression goes, in “uncharted waters.” As we try to project the various scenarios that could unfold during the months ahead, we are each giving “our best guess” estimate. Whether that will be adequate or not remains yet to be seen.

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How Firms Succeed 5.0

Disaster Tech Tip

As New York design firms found out, the events of, and subsequent to, September 11 resulted in extreme bursts of traffic to their Web sites and clients and employees tried to get updated information. The result? Overload and inaccessibility. According to InternetWeek, here are some suggestions to put in place before the next surge occurs:

  • Re-examine emergency plans to anticipate traffic levels as high as 10 times your all-time high
  • Establish methods for tapping server and bandwidth capacity from others: hosting vendors, caching vendors, other units
  • Be prepared to strip off graphics, advertising and personalization in favor of basic information, features
  • Develop strategies for handling emergency functions over the Web when phone reps are oversubscribed
  • Work with partners, competitors and government agencies to develop central sources for Web content during emergencies

    World’s Tallest Buildings

    The World Trade Center’s collapse has led to a debate among engineers about whether existing the world’s existing and proposed skyscrapers could be reinforced to avoid a similar fate.

  • Petronas Twin Towers 1,483 ft.
  • Sears Tower, Chicago 1,450 ft.
  • Jin Mao Building, Shanghai, 1,381 ft.
  • Citic Plaza, Guangzhou, China 1,283 ft.
  • Shun Hing Square, Shenzhen,Ch 1,260 ft.
  • Empire State Building, New York 1,250 ft.
  • Central Plaza, Hong Kong 1,227 ft.
  • Bank of China, Hong Kong 1,209 ft.
  • Emirates Tower One, U.A.E. 1,165 ft.
  • The Center, Hong Kong 1,148 ft.

    Source: Council on Tall Buildings and Urban Habitat, Lehigh University

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