On Monday morning, Manhattan’s financial district reopened for business. It was a remarkable scene for many reasons.
The blocks surrounding Wall Street looked as if they had been caught in some weird natural disaster. They had the feel of the capital of a developing country in political crisis. Police and military were everywhere, some in humvees with real guns on top. National Guardsmen checked IDs at barricades on Wall Street and Broad Street.
And there was the ash. Caked up on the streets, dusting the pastries in shop windows and the Mercedes abandoned in garages. And the smell. It was like smoke, but what else was in there? Plastic? Rubber? Jet fuel? Bodies? There was a scary sweetness to the odor, the strangeness of it even more striking when you went inside and then came back out again.
And then, there were the remnants of the towers themselves — maybe 20 stories of steel-beam lattice, one corner still standing. It looked like a twisted, burned-out skeleton of a church steeple. Even having seen all the pictures, I gasped.
But, perhaps even more remarkable, was that so much still seemed to work. The New York Stock Exchange, after all, is just five blocks from the trade center. The disaster didn’t just foul up the streets: Beyond the staggering human carnage, it uprooted businesses, destroyed phone and electricity connections, and disrupted major transportation arteries.
Could anyone have planned for such epic dislocation? Ivan Seidenberg, co-CEO of telecom giant Verizon, was speechless for a moment. “We never anticipated a bomb dropping here,” he finally replied. Here are stories of how the financial district and the city returned, in less than a week’s time, to some semblance of business normalcy.
(Re)Making a Market
Under the rumble of the elevated Queensboro subway, across from a taxi depot and a vacant office building, on an unremarkable block four miles and a river from the Trade Center, the cotton futures market is rocking.
Truly, it is loud. Men and women in cotton shirt-jackets shout bids at each other across the purple-carpeted pit, while dozens of monitors overhead stream prices. Volume is surprisingly heavy, given Tuesday’s Jewish holiday. “It’s been like this all day long,” beams Mark Fichtel. It is, of course, exactly what a futures pit is supposed to be like.
Except it’s in Queens.
At 8:48 AM on September 11, Fichtel looked out his window at the New York Board of Trade (NYBOT) at 4 World Trade Center and saw flames explode from the north tower above him. Immediately, the chief executive ordered 750 traders and staff out of the building. “I’m a very cautious person,” he says. A few hours later, the Board of Trade pits were destroyed.
Steve Bass knew exactly where to go. For the past five years, the NYBOT has spent $300,000 a year to lease and maintain backup pits and systems in the Queens building operated by Comdisco Inc., which provides disaster-recovery services. Some of the NYBOT’s 1,200 members had opposed the expense. Now it seemed a brilliant stroke.
By midday on Tuesday, Bass, the NYBOT’s senior vice president for information technology, had made it to the backup site. He couldn’t reach his staff on the city’s overwhelmed phone lines — but by day’s end, six colleagues, some of them traumatized by the tragedy, had joined him. Working through the night, the team and Comdisco staffers switched the backup systems on and pieced together the internal data network. The next morning, they arranged for a backup data system to replace the ticker stream normally provided by Global Crossing, whose own data center in lower Manhattan had been disabled. And over the next few days, the NYBOT rebuilt connections with the half of its member firms that had been displaced by the disaster.
On Saturday, most traders and the NYBOT staff traveled to Comdisco’s site to test the new system. People were jubilant and teary to rediscover colleagues, alive. But “it was like the first day of school,” says trader Roger Corrado. “Everyone walked in here, not knowing what to expect.” In test after test, the systems worked — until late in the afternoon, when traders were asked to pick up all the phones in the room at once. The system crashed. “My hair turned gray,” Fichtel says. What initially seemed a crippling capacity shortage, however, turned out to be an easily fixed problem with a switch in the building.
For now, the NYBOT has crammed the activity that used to fill 13 pits into just 2. Trading sessions for most commodities have been condensed from four or five hours to one and a half. Everything works smoothly, but traders still feel disoriented. For 10 years, Jewel Ann Weiss stood at exactly the same spot in the same pit, trading cotton futures. “You get used to hearing the same people and the same voices around you,” she says. In the new pit, the old order is tossed out. The old aural clues are useless. Trading is jerkier. “But we’ll make the adjustment,” Weiss says. “Humans do that.”
Comdisco is providing space and services to 35 customers affected by the disaster — 6 of them formerly housed in the towers. Not incidentally, Comdisco has been operating under bankruptcy protection since July. The disaster and stories like that of NYBOT could bring in new customers and needed revenues.
In the days following the disaster, Verizon scored some major miracles. It replaced or moved the equivalent of 20 million T-1 circuits downtown. It replaced 7 of 10 damaged cell sites. It reconnected lines to dozens of major banks and brokerages that had moved operations to midtown Manhattan and New Jersey. Not incidentally, it momentarily abandoned its legacy of horrendous customer service.
And then, there was 140 West Street.
One of five switching centers in lower Manhattan, the 75-year-old building at 140 West serves some 200,000 business and residential phone customers. It handles 20% of the phone and data traffic from the stock exchange. And it stands next to what was once 7 World Trade Center.
As of last weekend, some five tons of steel beams from the fallen towers piled up against the back of the building, blocking access to manholes and major cables. Power was gone. Most of the five subbasements were flooded with up to two feet of water, most of it from fire hoses; firefighters actually were battling nearby flames, still blazing, from a seventh-story window of the building.
By Friday, 100 workers had cleaned most of the water, mud, and dust off the 10 floors of equipment. Then as many as 300 more workers moved in for fine cleaning. Every wire and connection had to be vacuumed before the system was switched back on. At least three times through the weekend, teams were evacuated as rescue workers warned of more building collapses nearby.
On Friday, Verizon had hoped to have 140 West mostly operational by the end of the weekend. Come Sunday, in part because of the evacuations, it was clear that goal couldn’t be met. Inside the building, just 50% of the circuits had been restored. Outside, there was still no power. Crews had been forced to reroute 1.4 million of the building’s 3.5 million circuits.
The sad reality was that not all of those circuits were needed. Many people who used to make calls through 140 West, “simply won’t be there anymore,” said Verizon vice chairman Larry Babbio, who headed the recovery effort.
Service providers such as Verizon tended to take care of their biggest customers first. In fact, the big banks and brokerages appeared, on the whole, remarkably quick to regroup. In part, this was because they had dedicated resources to remarkable contingency planning. In April, Merrill Lynch ran a disaster simulation — assuming a massive hurricane — involving every business unit across the firm. When real disaster struck, it managed to relocate 90% of its lower Manhattan employees by week’s end. Another big bank, forced to abandon its offices, sent thousands of workers to offices in New Jersey — leased and kept empty for just such an occasion.
Then there were the little guys. Lacking clout and capital and global contingency planning, hundreds of small firms scrambled for office space, phone lines, and computers. The stock exchange, ultimately, is a visual metaphor; most financial markets depend on a vast network of far-flung data connections — much of which had to be restored.
Garban Intercapital, a little-known but crucial broker in fixed-income, derivatives, and other wholesale financial markets, fled from the 84th floor of the south tower — miraculously, with no casualties. On Wednesday, a task force began networking with banks, brokers, and other contacts. And by Friday, the company had found temporary space for most of its employees in midtown and in Jersey City, New Jersey.
At first, brokers could work only by phone — which was suitable for certain relatively illiquid markets that operate on that basis anyway. Slowly, though, the data connections came back — first to the Government Securities Clearing Corp. and the Depository Trust Bank and then to Garban’s clearing bank. The firm hoped to restore some brokerage services to its customers by week’s end. “You make some big strides and then some small ones,” said Mike Sheard at Garban’s parent company, IPAC, in London. “All I can say at the moment is, work in progress.”
Some refugee companies would take anything with walls and a roof. On Thursday morning, September 13, online retailer Bluefly announced that it could provide 9,000 square feet of temporary space at its midtown offices. Bluefly’s employees had witnessed the disaster from a bus as they traveled to New Jersey for a company outing. “We felt sadness and then deep fear,” says Bluefly CEO Ken Seiff. “And we realized right away that there were little things we could do” — like organizing drives for blood and clothing. And giving up the unused floor it had been saving for future expansion.
“It’s relatively raw,” said Seiff. “There’s electricity but not much else.” Still, by Thursday afternoon, Seiff had collected 20 serious inquiries. Another 80 companies called, offering the new tenants furniture, tech support, and even pizza — some of it free, some not.
Likewise, by Thursday afternoon, brokerage First Albany Cos. Inc. had six tenants for the space near Pennsylvania Station that it had offered the day before for free. By Friday, 70 workers had already moved in. The stock exchange waived, in this case, a rule that normally bars employees from competing firms from sharing offices.
How long will the itinerant employees stay? Steve Wink, First Albany’s general counsel, had no idea. “Nobody’s thought that far down the road yet.”
Keith H. Hammonds (email@example.com) is a Fast Company senior editor.