About 6,000 employees of the investment bank Goldman Sachs were to move into a 781-foot tower -- the tallest building in the state -- by June 2004, but those plans have been significantly scaled back. Plans to build a university, hotel and convention center at the site have all been shelved for now, and far fewer than 5,000 employees will be moving in next year, says a senior official at Goldman who requested anonymity.

Ground was to be broken by the end of the year for the second-tallest building in the state -- at 665 feet -- at 99 Hudson Street. But Merrill Lynch, which was going to occupy it, has shelved the plans indefinitely; it is still a parking lot.

Not a single office project has broken ground since Sept. 11, 2001.

Building Is at Standstill

With war raging in Iraq and concerns about terrorism, the situation will probably get worse before it gets better, said Carl Eriksen, the senior managing director of Insignia/ESG, a real estate brokerage firm. Others say Governor McGreevey has made things worse with his threat to eliminate a state program that has lured businesses from New York.

When asked if anyone had plans to break ground on a new project, Dan Frohwirth, the director of real estate and marketing for the Jersey City Economic Development Corporation, put it this way, ''You'd have to be out of your mind.''

But bad news for some is good news for others. With less demand, apartment rentals are cheaper than they have been for years, real estate agents say. And with Manhattan prices astronomical and housing costs in Hoboken also high, Jersey City is an affordable alternative.

For years artists, musicians and immigrants have called the waterfront section of downtown Jersey City home. In the 1980's, luxury apartment towers started rising on abandoned railroad yards in Newport, and in the 90's the site of the former Colgate-Palmolive factory gave way to offices. Indeed, the waterfront in Jersey City has for years welcomed a steady stream of young professionals. Yet there was little reason to explore west of Washington Boulevard, a de facto Berlin Wall.

That is changing, however, and downtown neighborhoods like Van Vorst Park, Hamilton Park, Paulus Hook and even the far western stretch of Newark Avenue underneath the New Jersey Turnpike have been drawing bargain bunters from Manhattan and Brooklyn. Older professionals have bought brownstones and are raising their children here.