New York is stronger and safer after 9/11, says mayor Bloomberg

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The Independent Online

Michael Bloomberg, the New York mayor, has hailed the economic recovery of the city as it marks the fifth anniversary of the terrorist attacks that brought down the World Trade Centre towers.

A recovery in the office market of the city's financial district, and a budget surplus fuelled by tax receipts from a booming Wall Street, were evidence that terror had failed to drive business away from Manhattan, as predicted in the immediate aftermath of 9/11.

"Instead of the post-9/11 economic collapse that al-Qa'ida envisioned and some doomsayers feared, we are stronger and safer now than we have ever been before," Mr Bloomberg said.

And he said despite fears that businesses may relocate to less high-profile cities, some of the US's biggest companies were in fact moving their headquarters to New York. This year, 44 of the Fortune 500 are based in the city - up on 2005 and 21 more than its nearest rival, Houston.

"That reverses a decade-long exodus from our city," Mr Bloomberg said.

Economists, business leaders and real-estate experts say the terror attacks of 2001 had remarkably little long-term impact on the city's economy, which has instead ebbed and flowed with the broader economic tide.

Office rents in Manhattan have recovered close to their levels in 2001 after troughing in 2003 when the US economy was at its most sluggish. Average rents in the financial district have recovered above $50 (£27) per square foot from $45 three years ago, and the landlords say just 6.9 per cent of space is vacant - below the level immediately before 9/11.

Wall Street companies are reporting record profits and employees are taking home unprecedented bonuses after a surge in merger and acquisition and trading activities, and after the city administration reported a surplus of $3.75bn in the last financial year.

However, large city grants to encourage businesses to lower Manhattan have been only partially successful. Goldman Sachs is building a new headquarters a short walk from Ground Zero, but the trend to relocate further north is continuing because of Midtown's better transport links. Lower Manhattan, when fully redeveloped, will have three times as much residential space as it did before 2001.

And Mr Bloomberg conceded that the political controversies over the future use of the former World Trade Centre site - which have meant that rebuilding work is yet to start in earnest - have been a setback. It is still unclear how much office space will be built on the site and whether government agencies will have to lease parts of it. "Progress has not always been as smooth or seamless or moved at the pace we'd like. It takes time to work out the economics and to see what demand will be. Five years is a long time, but we will build buildings to last 50 or 100 years, so it is more important that we get it right."