Most students of Greek mythology are familiar with the story of the phoenix, a bird that was the only one of its kind. After it died in its nest, a spontaneous fire later consumed both the bird and nest, and from these ashes the next phoenix arose.

In current-day New York City, another phoenix is emerging -- this one from the ashes of the World Trade Center and its surrounding environs.

Putting things together
Taking center stage in the drama has been the Lower Manhattan Development Corporation (LMCD), a nonprofit organization formed in the aftermath of Sept. 11, 2001, and charged with rebuilding and revitalizing Lower Manhattan. Its mission encompasses everything from counseling individuals to administering a $750 million federal fund meant to assist with the restoration of the area's damaged utility infrastructure.

It's not the only group involved in this undertaking. The Alliance for Downtown New York, for example, is striving to rebuild the financial district for businesses and the residential community alike. This organization manages the Downtown-Lower Manhattan Business Improvement District, which provides such services as supplemental security and sanitation, economic development, street design and transportation, tourism programs, and special events.

Illustrating the interplay of various public- and private-sector partners are such entities as the New York City Economic Development Corporation, the New York City Partnership, the Federal Small Business Administration, Wall Street Rising, and the NYS Empire State Development Corporation.

Measuring progress
As for the site of the World Trade Center itself, the new Freedom Tower's cornerstone was laid on July 4, 2004, to mark the beginning of the rebuilding process. That granite was removed a year later, to be reconfigured to meet the needs of a revamped design. Ultimately, the entire site will be a functioning memorial -- millions of square feet of office and retail space, as well as cultural buildings and a new transportation hub. Already, a 52-story, $700 million building at 7 World Trade Center opened in May, and all five planned WTC buildings are scheduled to be complete by 2012.

Not far from there, the New York Stock Exchange remains. Wall Street will continue to represent the financial center of the nation, even though business continuity planning requires that firms have backup locations. To that end, last November, Goldman Sachs (NYSE:GS) broke ground for a new 43-story world headquarters across the street from the WTC site.

Tax credits and subsidies are allowing not only Lower Manhattan's traditional large financial firms to reap benefits. Other smaller businesses are beginning to be drawn to the area, and that's ushering in more commercial diversity, including the nonprofit, media, legal, educational, and health sectors. What's more, through the work of Adopt-a-Company, a public-private initiative of the New York City Economic Development Corporation, major corporations, foundations, or even individuals can "adopt" small enterprises hurt by 9/11 and help them restore their businesses according to their own terms.

The Downtown Alliance recently published a report analyzing the progress in and around Ground Zero over the past five years. While noting that much work remains, the report also notes significant accomplishments so far in the recovery process. In addition to documenting progress concerning residential quality-of-life issues, the report also points to significant commercial developments, including the following:

  • Office leasing activity has been gaining momentum, and the vacancy rate has declined by 2.5% from the post-9/11 peak.

  • Companies such as JPMorgan Chase (NYSE:JPM), General Electric (NYSE:GE), Merrill Lynch (NYSE:MER), Guardian Life Insurance, and TD Waterhouse have withdrawn more than 1.2 million square feet of office space from the market since the beginning of this year.

  • Office rental rates have been increasing since early 2005, reaching an average of $38.57 per square foot in July, the highest since May 2002.

  • A recent poll revealed that 60% of area workers believe that Lower Manhattan is a better place to work, and 91% are optimistic about Lower Manhattan's future.

  • Seventy-two companies from other parts of the city or metropolitan region have relocated to Lower Manhattan since the beginning of 2005.

  • Retail has returned, including many of the businesses that were immediately displaced, as well as retailers new to the area, such as Tiffany (NYSE:TIF) and Whole Foods (NASDAQ:WFMI).

  • Hotel occupancy rates have been on the rise since 2002.

Noting setbacks
To be sure, disagreements have surrounded some of the redevelopment endeavors, which certain pundits refer to as the "Freedom Follies." Most notably, construction of the memorial itself has stalled over design and funding controversies. Conflicts have ensued among the WTC developer and state and local officials over insurance payouts from the original tower; there have been other conflicts with the site's architect. Even a poll by Pace University conducted earlier this summer claims that the Lower Manhattan residents surveyed feel increasingly pessimistic over the rebuilding effort, evenly divided over whether the plans for the WTC site should continue or whether the next state governor should have a chance to amend them.

The LMDC itself, which took on the thankless task of coordinating and overseeing efforts from the beginning, will soon be dissolved. While some claim that the group fulfilled its mission of instilling confidence and providing a vehicle through which the redevelopment process could take place, critics contend that millions were spent with little accomplished. Not surprisingly, the organization's supporters and detractors divide pretty much along political party lines.

There's no question that progress is being made to rebuild Lower Manhattan. Whether that progress is going as quickly or as smoothly as hoped is debatable. The cataclysmic events of 9/11 were traumatic, and it's a testament to the strength of our spirit and our democratic system that we have the freedom to engage in such a debate.

Even the Greek gods bickered among themselves. Much of ancient mythology deals with the themes of greed and hubris undermining the quest for a society's perfect balance. The rebuilding of Lower Manhattan is the job of mere mortals, who must satisfy varied interest groups and do so within budgetary and bureaucratic confines.

While no one could have expected a rebuilt community to spring forth miraculously from the blackened earth of five years ago, much like the mythical phoenix, Lower Manhattan is indeed showing signs of rebirth. The community may not be able to instantaneously transform itself independently, but through the efforts of many, it just may soar to new heights.

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Fool contributor S.J. Caplan, a former vice president and assistant general counsel of Goldman Sachs and former vice president and derivative finance specialist at Lehman Brothers, owns shares of The NYSE Group and serves as an arbitrator for the New York Stock Exchange and the NASD. For further interest in the rebuilding of Lower Manhattan, she recommends visiting the site of Project Rebirth, a nonprofit group documenting the daily rebuilding of the WTC site. The Fool has a disclosure policy.