Buildings
Ground Zero Development Stalled by Lease Issues
(archrecord.construction.com - 03/22/2006)
By Sam
Lubell
The fate of development at Ground Zero
hangs in the balance as developer Larry Silverstein and the
Port Authority of New York and New Jersey attempt to renegotiate
Silverstein's lease to the twin towers.
New York Governor George Pataki had
set a March 14 deadline for the parties to resolve the lease
contract, but state officials walked out of talks with Silverstein
just before the deadline. They claimed, among other things,
that the developer had asked for too great a share of the
rebuilding money (much coming from the $2.9 billion insurance
proceeds and from tax-free New York State Liberty Bonds) in
exchange for giving up rights to build the World Trade Center
Freedom Tower and two of the site's other five planned office
towers. The Port Authority also wants Silverstein to share
in the projects' infrastructure costs. According to the Port
Authority's proposal, Silverstein would keep the rights to
the three planned towers along Church Street. He would cede
the Freedom Tower, which is thought to be the least economically
feasible building on the site.
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Silverstein obtained the lease to the
towers from the Port Authority just a few months before the
September 11 terrorist attacks. He is expected to pay the
Port Authority $125 million in rent this July. A recently-released
city report claimed that Silverstein will likely run out of
money and default on his lease after building only two out
of Ground Zero's five planned towers.
Pataki, the Port Authority, Mayor Michael
Bloomberg have since said that Silverstein is putting his
financial interests over the public's need to rebuild the
site. It has now been almost five years since 9/11 and construction
is still barely underway at Ground Zero. Silverstein has blamed
the agency for leaving the negotiations.
Silverstein offered the Port Authority
a new proposal on March 17. In a release following that proposal,
Silverstein said "Everyone on the Silverstein team stands
ready to roll up our sleeves and get the job done." The
Port Authority has pledged to submit a counter-proposal shortly,
although many speculate that the conflict will soon end up
in court.
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