We are looking in this area but as we are relatively new to NYC would love some local input. Any thoughts on suitability for family with teenage children.

Nothing wrong with the neighborhood for teenagers. Does school factor in?

It's a nice area, at the border of Soho, Chinatown and Little Italy. Lots of restaurants and shops, easy subway access. Where are they going to school? Public or private? Do they have any special interests? High schools can be extremely good or extremely bad. If you are looking for a public option, you might want to check insideschools.org first, and then pick an area to live within easy commute.

school is your only issue, really--you'd better nail that down before you start thinking about neighborhoods

Another observation I have is the heavy traffic going into Chinatown/Little Italy (via Grand) as well as from Williamsburg bridge (via Laffyette)

The B&T traffic tends to go from Kenmare to Lafayette to Broome, so Grand is not terribly affected by it. As to the Chinatown traffic, since Grand has the bike lane/parked car markings, it is down to one lane of passing traffic and much slower. It is not the quietest corner, but far from
the worst.

How does this area compare to Tribeca?

Great fun neighborhood and centrally located.
With kids I would advise against ground floor apts though. Rats are at their biggest there. I thought they were cats!

A filthy former slum with alot of noise and traffic with asking prices of around 1100psf for lofts. Only in New York, kids................only in New York.

Anyone have anything else to add? Nice family and school is not an issue. They have asked me, but I am not sure about that area.

One of the prettiest Coop buildings in NYC is within a stone's throw, with plenty of high $/celebrity occupants.

Which building is this?

You mean the Police Building? I've never seen the apartments inside, I assume you have a lot of funky layouts, given the original building. Do they work well as apts?