Paul Steiger, managing editor of The Wall Street Journal, stood on a desk in the paper’s temporary newsroom in South Brunswick, N.J. It had been five weeks since the terrorist attack of Sept. 11 had made The Journal’s offices at the World Financial Center uninhabitable, scattering the newspaper’s operations to various locations across the metropolitan region.

Now Mr. Steiger was preparing to address the future. According to people who were present in the temporary newsroom, Mr. Steiger began with a story about his boyhood move from Connecticut to Princeton, N.J. He then said that 250 of the nearly 800 workers from 1 World Financial Center, including the newspaper’s copy desk, wouldn’t be returning to New York; they would remain in New Jersey. But he assured everybody else that they would be back in devastated downtown eventually. "We’re not going to let the bastards chase us out of there," Mr. Steiger said, according to sources.

As it turns out, they may not be there—or anywhere near there—for long. The Observer has learned that The Journal’s parent company, Dow Jones, is in the market for 150,000 square feet of office space for a new, consolidated Manhattan office for the paper—in midtown, sources familiar with the search say.

"They want to get out of downtown," a source said.

The newspaper’s lease on its seven- floor spread at the World Financial Center is up in 2005; currently, Dow Jones is marketing about half that space for sublease, and no deal is in place to renew the master lease. There’s no move-in date in the newspaper’s plans to move 400 staffers back to the remaining space in the World Financial Center have not been completed.

Recalling Mr. Steiger’s talk, Ron Chen, a Journal copy editor and president of IAPE/Communications Workers of America Local 1096, the union that represents Dow Jones employees, put it this way: "That might sound like a macho thing to say. But that doesn’t really deal with what’s on people’s minds and what it’ll be like to work there."

For lower Manhattan, the significance of a Wall Street Journal move uptown is not measurable in dollars and cents. The space the newspaper holds in the World Financial Center is hardly enough to make or break the downtown commercial real-estate market. But since 1889, The Journal has been the voice of Wall Street, the undisputed center of power in the financial world. If that voice now speaks from midtown, the symbolism will be all too clear. Wall Street isn’t what it used to be, even before the terrorist attack; financial institutions have been moving to midtown for years. That was bad enough—but The Wall Street Journal on … Sixth Avenue? That would be a crushing psychic blow.

Mr. Steiger was unavailable for comment. Steven Goldstein, a vice president with Dow Jones, said that The Journal’s parent company had looked at a number of buildings in several Manhattan locations, including midtown. But he echoed recent statements from The Wall Street Journal and Dow Jones about their commitment to lower Manhattan, saying, "We expect to remain downtown when our lease is up in May 2005."

The Journal’s recent Pulitzer Prize for breaking news—which prompted Mr. Steiger to stand up on a table again, this time with champagne in hand—served as a reminder of the newspaper’s ordeal and physical transformation. The Sept. 11 attacks forced Dow Jones to disperse its staffers, keeping 300 people in South Brunswick, while sending another 500 to digs in Manhattan and other parts of New Jersey. While most of The Journal’s reporting staff bunkered down into quarters on Canal Street, others—including members of the Weekend Journal and the paper’s editorial page—moved into the former offices of Work.com, a Web site owned and closed by Dow Jones.

End of Good Feelings

It’s fair to say that any era of good feeling about the matter ended in October with the company’s decision to keep most of those currently in South Brunswick there permanently. In exchange, those affected were offered a bonus of 50 percent of their base salary, with a minimum of $25,000 and $50 per week for a year for commuting expenses. Sources familiar with the situation said that Dow Jones’ possible midtown move would not affect those in South Brunswick.

One Journal source put it this way: "There are people in South Brunswick that would eat nails and breathe asbestos to get out of South Brunswick." Referring to lingering health issues downtown, the source said that "many of the union’s concerns about safety don’t hold much sway with them."

Indeed, the situation has created a schism between Journal employees who want to go back to the World Financial Center but can’t, and those who have to but would rather not. While Journal sources have described their Soho digs as "cramped" and "not all that comfortable," for the most part, they said, they actually prefer their temporary offices to the World Financial Center.

"The World Financial Center was never a great place to be," one Journal source said. "There’s no character there. I’d rather stay in Soho, given the neighborhood."

Moreover, sources said, a return to the World Financial Center would bring new problems. While the union continues to study air-safety issues at the site, sources expressed uneasiness about being flush against the site of the tragedy. Others noted that they would have to face the hassles and aggravations of working next to what amounts to the world’s biggest construction zone.

"People have bad memories of that place and that day," one source said, "They feel going back would awaken bad things—which is understandable."

Another source said, "Most people here have very specific concerns: Where are you going to eat lunch? How are you going to meet sources? You literally have to walk a mile to get out of there."

In the meantime, sources said, speculation has begun as to whether a return will actually happen. One of the most persistent rumors has The Journal moving to a new headquarters at 55 Water Street. Mary Ann Tighe, a vice chairwoman with Insignia/ESG who represents the building, would not comment on the rumors. Similarly, Mr. Goldstein said that Dow Jones intends to return its employees to the World Financial Center as early as July.

"I think the company’s looked at lots of options," one Journal source working out of the Soho office said. "They’ve looked at staying in this building, at going to another building. But none of us know. God knows how hard they’re trying, what the hurdles are. I can tell you, though, people would much rather either move to a new building or stay in this one than go back."

If they do go back, they’ll find huge changes. In a meeting with union representatives on April 4, Dow Jones executives gave the first glimpse of what life inside the new streamlined offices would be like. Only three of the seven floors once occupied by the paper and company will remain in the hands of Dow Jones: floors 9, 10 and 11. The others—floors 12, 14 (site of the company cafeteria), 15 and 16—will be subleased to other firms.

"If you’re going to give up three or four floors," Mr. Chen said, "why not all of them? Why not admit you can be somewhere else in lower Manhattan? The company has indicated that once the lease is up in a couple of years, everything is up for discussion.

"There’s no question," Mr. Chen continued, "there’s no doubt that The Journal has to be in Manhattan, in lower Manhattan. The question is: Do you have to be in a building next to Ground Zero?"

Brookfield Properties, which owns 1 World Financial Center, hopes others don’t share that view. Work on the building, which was severely damaged on Sept. 11, began almost the next day as Ric Clark, the company’s chief executive, started placing orders for granite, marble and glass. But seven months later, the building still is desolate.

Sabrina Kanner, a vice president at Brookfield who is managing the reconstruction of the Winter Garden, the World Financial Center’s centerpiece, was busy on April 15 supervising the delivery of tons of Carrara marble mined at a rapid-fire pace in Italy to restore the floor of the vast, glass-enclosed concourse by September.

And rent breaks for retail tenants in the buildings, engineered by Brookfield to get some life back into them and make them more attractive for new and returning tenants, have been in effect from the very start.

But for George Anastasakis, who runs World Financial Center Florist, the building is still a ghost of its former self.

"We’re doing about 30 percent of [the business] we were doing prior to Sept. 11," he said. "Our location in [Building 1] is still closed; that was damaged badly. It needs total reconstruction right now. We’re always very optimistic: We see more and more people every week in the offices. But still, to get back to the pre–Sept. 11 levels, I would think it would take quite a while."

Besides Mr. Anastasakis, few businesses have been able to reopen in the World Financial Center. There’s a Starbucks and a newsstand; a California Burrito and SouthWestNY, a lunch spot; and Godiva Chocolatier has opened a cart while its store in the World Financial Center remains shuttered. Businesses like these help make a place that witnessed so much destruction seem a little more cheerful—an important factor in getting companies to return. So, Mr. Anastasakis and others said, Brookfield has been "making it easier to pay the rent."

Financial Incentives

The city and the state are pitching in, too, trying to lure businesses to return to lower Manhattan with incentive programs fueled by some $500 million in federal aid. Offers to companies—which would include a mix of tax abatements and subsidies—are meant to stimulate job creation in lower Manhattan, where, according to M. Myers Mermel of Tenantwise.com, a real-estate consultancy and database, nearly 60,000 jobs were lost. It wasn’t clear whether Dow Jones had had an offer to stay—but several brokers whose clients have received such offers said they came with a serious drawback.

"You have to commit to keeping X number of jobs in [lower Manhattan] for X period of time," said one broker whose clients have received offers. "And if you fail to do that, you must reimburse the city."

With interest, too. The traditional incentive packages ask companies who can’t keep up their end of the bargain to pay back the money with about 8 percent interest. It’s called a "clawback provision," and it’s meant to stem the tide of companies taking tax breaks and then not living up to their side of the agreement. But the first round of offers being drawn up for lower Manhattan require an even more severe commitment, charging 16 percent interest on the money a company takes from the city and state if it ends up deciding not to stay in lower Manhattan.

What’s worse, new accounting procedures require a company to list the money it receives from the government on a separate line on its balance sheets labeled "reserved against contingent liability."

"It’s not the sort of thing you want on your balance sheet," the broker said.

But even if Dow Jones decides not to sign on for an incentive package, there are significant financial advantages to be had in lower Manhattan.

According to Mr. Mermel, the average monthly rent per square foot in lower Manhattan is now as low as $37.66. In midtown and midtown south, the rents average $52.61.

That hasn’t stopped some firms from moving their headquarters from lower Manhattan—many for reasons that were relevant even before the city was attacked.

"What 9/11 did was really precipitate decisions for companies that, by virtue of having low-cost, long-term leases and low-cost rental space, were keeping facilities and people downtown by virtue of inertia," said Kathryn Wylde of the New York City Partnership. "And that includes Morgan Stanley, Marsh and McLennan, Deutsche Bank, Bankers Trust and Salomon Smith Barney in 7 World Trade."

The main reason cited for moving to midtown is the neighborhood’s proximity to Penn Station and Grand Central Terminal, where commuters from Long Island and Westchester can get a one-seat ride to and from the office. And even with efforts underway to quickly rebuild and expand the downtown transportation infrastructure, it could be years before the benefits of those improvements are felt.

Most observers agree that it will take a long time for lower Manhattan to recover from the Sept. 11 attack. What the financial district will look like when that recovery comes is anybody’s guess.

There are some who say the city can’t depend on financial institutions to help revive the downtown economy, and serious proposals to create incentives for biotech and other industries—potentially as new staple businesses for lower Manhattan—are advancing with the city-state agency now responsible for rebuilding lower Manhattan.

John Steele Gordon, a historian of Wall Street and author of The Great Game: The Emergence of Wall Street as a World Power, 1653-2000, said the forces pulling the financial district apart may be larger than many people have realized.

"It is [still] the financial center, to the extent that there is a center any more to the financial world," he said. "It’s so quickly moving into the ether. You can be a major player on Wall Street and be anywhere …. That’s why the symbols of Wall Street, like The Wall Street Journal and the New York Stock Exchange … have to stay there."

When asked if he could imagine Dow Jones leaving lower Manhattan after the expiration of its World Financial Center lease, Mr. Chen said, "I cannot. I absolutely feel our offices should be in lower Manhattan near Wall Street."

In a similar vein, Mr. Goldstein, the Dow Jones vice president, said: "Right now we have a lease until 2005, and we plan on returning to those three floors. We’ve always been downtown, and our goal would be to remain downtown."