The looming World Trade Center ‘stalemate’

Downtown Express photo by Josh Rogers. David Emil, president of the Lower Manhattan Development Corp., played Ping Pong last Tuesday at the opening of a new temporary plaza and greenmarket at the 5 World Trade Center site. The greenmarket will be open every Tuesday for at least a year on Greenwich St. near Albany St.

Downtown Express photo by Josh Rogers.
David Emil, president of the Lower Manhattan Development Corp., played Ping Pong last Tuesday at the opening of a new temporary plaza and greenmarket at the 5 World Trade Center site. The greenmarket will be open every Tuesday for at least a year on Greenwich St. near Albany St.

BY JOSH ROGERS    |  The World Trade Center’s epic disputes over power and money have for the most part been resolved, but there’s at least one remaining that could prevent construction of one of the proposed towers.

“We are at a stalemate with them at the moment,” David Emil, president of the Lower Manhattan Development Corp., told Downtown Express last week, referring to the corporation’s dispute with the Port Authority.  “It’ll be years before it’s resolved.”

The L.M.D.C., a federally-funded corporation formed to manage Downtown’s post-9/11 recovery, owns the World Trade Center Tower 5 site, and Emil said the Port wants to take it over without paying any money.

The problem, Emil said, is the site is worth $300 million to $500 million, and in addition, the L.M.D.C. spent hundreds of millions to get the site ready for development — a figure that ballooned because of the plagued and long-delayed demolition of the Deutsche Bank building, where two firefighters were killed battling a 2007 blaze.

Emil said the Port is arguing that it effectively became the owner of the site under a 2006 agreement, and that the development corporation has been acting as the Port’s agent.

“We say, yeah, that may be. If we were your agent, you have to pay us the $300 million that it cost to take this thing down, to which they say no, that was your problem you owned it — you see, you can’t have it both ways guys,” Emil said during an impromptu interview at the site Sept. 2nd, after a ceremony celebrating the opening of a temporary green market and public plaza there.

Last week, the Port Authority did not dispute Emil’s characterization of the situation, and a spokesperson declined to comment for this article.

On Tuesday, Scott Rechler, the Port’s vice chairperson, said the higher demolition costs were not a reason to revisit the agreement, but he also thought the dispute would not lead to delay. 

“We’re going to live by the agreements of ‘06, and I think everyone will – to move it forward,” he told Downtown Express Sept. 9.

The 2006 deal, a memorandum of understanding between the Port and the L.M.D.C., involved a land swap of the Tower 5 site and the World Trade Center’s Performing Arts Center site.

The Port had originally planned to develop the site as an office tower but after a 2007 deal to move JP Morgan Chase headquarters Downtown fell through, it has since said it would wait for the market to dictate the best use of the site.

Emil said the Port is still looking to develop the site commercially, but the L.M.D.C. feels the quickest and most lucrative way to proceed is to build a residential tower.

“The [L.M.D.C.] board’s very strong feeling is we should monetize it and use the money for Lower Manhattan,” he said.

The corporation is only allowed to spend money in Manhattan south of Houston St., whereas the Port’s revenue benefits both New Jersey and New York State.

The L.M.D.C.’s board is made up of appointees of the governor and mayor, but its current members were mostly appointed by previous administrations during periods when the corporation had a much larger staff and was more involved in Downtown plans.

Former Gov. George Pataki created the agency at the end of 2001 with a Congressional grant of $2.783 billion. Rumors of the development corporation’s imminent demise began surfacing a few years later, and by 2006, Pataki’s last year in office, he said it was time for the agency to close since it had done most of what it set out to do, including managing the World Trade Center redevelopment and memorial plans.

Pataki’s successor, Eliot Spitzer, apparently agreed during his campaign, calling the agency an “abject failure” in 2006, but he had a change of heart after taking office the next year, naming his top economic development adviser, Avi Schick, as chairperson, and Emil as president.

There have been two new governors since and one new mayor, but Schick and Emil remain the leaders of the corporation. Emil no longer draws a salary for his position and works part-time as president. He said there are now 15 staff members remaining, who focus on making sure invoices on L.M.D.C. projects are legitimate before writing checks. He said their combined salaries were something less than $750,000 a year.

Over the years, there have been many calls to close the corporation down. Most observers agree that, legally, the organization can’t shut down fully until all of the money is spent, but some have suggested it should become a paper organization, with the city taking over its remaining responsibilities.

All of the corporation’s remaining funds are designated for specific uses, but there is still hundreds of millions of dollars that has not yet been spent. Much of it is for projects that have not been completed, such as enhancements to the East River waterfront.

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