NEW YORK – Blue plywood covers a block on all sides where a 1 million-square-foot skyscraper was to rise in midtown Manhattan. Orange and white barriers push pedestrians off the sidewalk into the street. Workers left the site last week.
In lower Manhattan, construction has been halted on two office tower conversions that had been financed by bankrupt Lehman Bros., including a planned luxury condo tower and a Robert De Niro-backed Nobu restaurant. A similar fate has befallen a planned 57-story boxy glass tower a few blocks away in Tribeca.
The half-built sites are powerful examples of how the global economic meltdown has infected the New York construction industry, wiping out thousands of jobs and cutting off billions of dollars in funding. As a result, boarded, empty sites are surfacing around the city as developers lose financing midway through projects.
Experts say the interrupted plans for the city skyline could knock down real estate values, create nuisances for pedestrians and indefinitely depress thriving neighborhoods.
"It's not good for the psyche," said Catherine McVay Hughes, a downtown community board leader. "Instead of having a vibrant corner, now we have a hole in the ground."
A New York City contractors' group has tracked over 100 projects in the city either stalled or canceled since last fall's credit crisis dried up developers' financing. The city's Department of Buildings said more than 30 construction sites have been idled during recent inspections, and "we suspect that there are more," spokeswoman Kate Lindquist said.
One of the biggest is Atlantic Yards in Brooklyn, a 22-acre development where a new arena for the New Jersey Nets and up to 16 towers are planned. Construction activity stopped in December and won't resume until a residents' opposition lawsuit is resolved. The developer, Forest City Ratner, has delayed closing on a deal to purchase all the land until enough financing is there for the $4 billion megaproject.
Boston Properties last week suspended construction on a $980 million office tower just south of Columbus Circle in Manhattan because a law firm canceled plans to lease space there, "thereby rendering the project economically infeasible in today's environment."
The normally busy site was boarded up and idle this week, although traffic barriers still surrounded it.
Developer Kent Swig suspended work on converting office towers into condominiums, including the luxury hotel and restaurant with De Niro, after his main lender, Lehman Bros., filed for bankruptcy. Lehman has sought to foreclose on the project, now shrouded in construction netting.
The foundation was completed on an 830-foot tower of stacked glass cubes planned by the Alexico Group, next to a New York University building in Tribeca. But work stopped over a month ago on the $600 million project. In the Bronx, financing problems suspended a $55 million parking garage for the New York Botanical Garden.
When construction is suspended on projects in progress, contractors have to secure the sites, often by filling half-built foundations with sand to ensure they remain stable, along with boarding up the sites and leaving locked trailers and idle equipment.
"There are a number of jobs that have just had the foundation built, where they're filling the hole," said Louis Coletti, head of the Building Trades Employers Association
It's unclear how long an unfinished site can legally stand. The Buildings department issues permits that typically are active for six months to a year, and expire when contractors' insurance for the property does. But permits can be extended indefinitely if developers cover the property.
The department is sending inspectors out to look for more stalled sites and started a monitoring program for the ones it knows about, seeking status updates and making sure they are safely maintained, Lindquist said.
The empty sites cast a visible pall over the city in a way that other delayed projects don't, experts say. A long-stalled effort to rebuild part of Penn Station in a largely empty post office building can't be seen as a delay from the street, for example.
But real estate consultant Jonathan Miller said half-built foundations and boarded-up sites will pose concerns for buyers of nearby properties, especially with no dates in sight to resume or complete the projects.
"What it shows in physical detail is weakness in the current environment," Miller said. "It adds to the idea that there's not a sense of urgency."
Experts have called the downturn one of the worst for the city's commercial real estate industry in decades, with office vacancy rates rising everywhere, even in the most sought-after market of midtown Manhattan.
As in past recessions, they said, projects that go into the ground as one thing may be finished as something else, remaking the skyline over time.
Several hotel projects in jeopardy may be redesigned as apartments or offices, where financing may be more readily available, Miller said. World Trade Center site planners have re-imagined one of five planned towers as an apartment complex and an investment banking tower; the tower hasn't even broken ground.
"There are two scenarios," he said. "One is wait an hold. What we're seeing some of is consideration of some altnernative use."
Sometimes the change of direction is welcome, said Rick Bell, president of New York's chapter of the American Institute of Architects. Manhattan's Battery Park City neighborhood was built along the Hudson River waterfront after a master plan languished for over a decade, and a plan by Gov. Nelson Rockefeller that used less of the waterfront was nixed, he said.
But Bell said the growing number of unfinished sites are the most visible signs of the city's financial stability, or failure.
"These buildings are big question marks, not exclamation marks," he said. "A real question about what is the state of the economy, and is it ever going to come back to what it was before."