Volume 18 • Issue 35 | January 13 - 19, 2006

4.65 billion reasons why I should rebuild, Silverstein says

Downtown Express photo by Elisabeth Robert
W.T.C. developer Larry Silverstein said during an interview at 7 World Trade Center that the mayor is more interested in building apartments in Lower Manhattan than rebuilding offices.

By Josh Rogers

Larry Silverstein sits confidently in his empty office tower with views of the hole in the ground at the World Trade Center site as well as the two large buildings still damaged almost 4 1/2 years after the Sept. 11 attack. The mayor and the Port Authority, two of the W.T.C. power brokers, are not convinced that Silverstein is the man to develop all of the W.T.C.

But the building’s unclean windows also look out at the Hudson River and Downtown’s landmarks including the Woolworth and Municipal Buildings. Silverstein says he’s optimistic because the city and Port will realize that they won’t be able to redevelop the site unless they can find someone else who can get $4.65 billion in insurance money.

“We are the only ones with access to the money,” Silverstein, 74, said last Thursday in an exclusive interview with Downtown Express editors and reporters at 7 W.T.C. “Without the money you can’t build anything.”

Last month, Gov. George Pataki announced that he was inclined to issue Silverstein $1.67 billion of the remaining tax-free Liberty Bonds the state controls, but the mayor delayed a vote on the city’s $1.67 billion in remaining bonds, which were part of the federal government’s post-9/11 relief package for New York.

Silverstein does not need the city-controlled bonds for now and he said the vote delay will not set the redevelopment back. “We certainly do have some time,” he said. “There’s no question.”

A protective “bathtub” wall will have to be built near Church St. in this section of the World Trade Center site, where the permanent train station and Towers 3 and 4 are planned to be built.
The Bloomberg administration is negotiating conditions under which they would issue the bonds to Silverstein and is looking for assurances that he will meet design and construction timetables and the ability to “crawl back” the bonds if the developer misses a deadline.

Silverstein has enough money to begin building the 1,776-foot Freedom Tower at Vesey and West Sts. this April and Tower 2 at Church and Vesey Sts. next year, when the Port Authority is expected to have the site ready. Tower 2 has larger floor plates and he expects to fill the building with a few financial or communication firms in search of large trading floors or studio space. The Freedom Tower is likely to have a large number of tenants in need of smaller spaces and Silverstein expects both buildings to take at least a year to fill after they open in 2011.

He said Tower 2 is a better location because it will be closer to the W.T.C. PATH-subway station, but since it will take the Port Authority about a year to construct a protective bathtub there, he wants to begin building where he can first.

“Clearly the best place to start is where you’re closer to mass transit and Tower 2 is closest to mass transit,” he said. “However the realities being what they are, you cannot start Tower 2 until you excavate that major bathtub.”

The Port is now designing the bathtub and expects to begin building it this spring. Port officials have said the design could not begin until the plan was done for the train station, and places were found for the extensive amount of underground infrastructure and truck ramps needed at the site. The New York-New Jersey authority expects to have sites 3 and 4 ready for construction by the middle of 2008 although officials, say there is a chance that could be speeded up by six months.

Anthony Coscia, the Port Authority’s chairperson, told The New York Times last month that he has spoken to Silverstein about relinquishing control over much of the W.T.C. site in exchange for lowering Silverstein’s $120-million annual rent to cover just the Tower 1 and 2 sites.

Silverstein, who signed a 99-year lease with the agency for the Trade Center complex several weeks before the attack, denied anyone at the Port had raised the issue of exchanging control for a reduced rent. He refused to say last week whether or not the Port was trying to get back control of Towers 3, 4 or 5. Steve Coleman, a spokesperson for Coscia, said he had no reason to dispute his chairperson’s statement.

Pataki said Silverstein and the Port had 90 days to work out their remaining disagreements and Coleman said he thinks there will be an agreement in March.

“We’re following the governor’s timetable and we expect to have a resolution at the end of the 90 days,” Coleman said.

The Port is also arguing with the city over the retail layout at the W.T.C. The authority favors keeping Cortlandt St. closed off to create larger spaces for stores whereas the city wants to open the street to add liveliness and provide better views and access to the W.T.C. memorial. Silverstein said he would be happy with whichever idea prevails.

Mayor Mike Bloomberg told Downtown Express last month that market demand should dictate what gets built at the site and he has also spoken about considering hotels or housing there. The Liberty Bonds could be used for a hotel or retail space in addition to offices.

Silverstein said the site can’t be built entirely unless he gets all of the insurance money, which requires him to rebuild 10 million square feet of office space there. “If you stop and ponder the significance of that, you come to the conclusion that 100 percent of the office space needs to be built out,” he said.

A spokesperson for the mayor did not respond to a request for comment.

Silverstein said the mayor is “more of a supporter of residential down here than anything else.”

Bloomberg and others have questioned the demand for 10 million square feet of office space given Silverstein has only found two tenants for the 1.7 million square feet of office space at 7 W.T.C., which is expected to open in April

Silverstein said one of the reasons he has not found more tenants yet is public skepticism about the rebuilding pace.

“When you have major uncertainties, and you have major controversies it is difficult for people to relate to what’s really happening,” he said. “The constant question is, ‘is it really going to happen?’”

It will, Silverstein says, because he expects agreements with the mayor and the Port Authority. “I think at the end of the day we’ll get this resolved together.”



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