Volume 18, Number 50 | April 28 - May 4, 2006

With W.T.C. deal, Port delays retail construction

By Josh Rogers

Port Authority leaders acknowledged Wednesday that they were pushing back by half a year the target date when construction could begin on the Church St. side of the World Trade Center site.

Downtown residents, business leaders and Assembly Speaker Sheldon Silver, over the last year, have been pressing the Port to speed up construction on Church St. to get stores and street life back to the site, and in recent months authority officials said they thought they could speed up the timetable by six months so that developer Larry Silverstein could begin constructing Tower 2 at the beginning of 2007 and Towers 3 and 4 at the start of 2008.

Sometime within the last few weeks, the Port Authority switched the construction schedule for the “bathtub” slurry wall needed to construct buildings on Church St. so that under the new goals, retail and office construction won’t be able to begin at Tower 3 and 4 by the middle of 2007 and at Tower 2 by mid-2008.

“They’ve got to do infrastructure work,” Silver said in a telephone interview. “It’s 41/2 years later – more than 41/2 years – and they haven’t done anything. Someone has got to ride herd on them.”

Julie Menin, chairperson of Community Board 1, said “we obviously don’t want to see any delay in the retail because it is so desperately needed. It is a top priority.”

The Port’s board of commissioners, appointed by the New York and New Jersey governors, approved a general framework agreement with Silverstein Wednesday whereby the developer would retain his leasing rights to the Church St. sites and the Port would take control of the Freedom Tower and Tower 5-Deutsche Bank sites at the west end of the W.T.C.

Silverstein Properties is expected to begin actual construction of the $2.1 billion Freedom Tower soon and turn over a finished building to the Port in 2012. On July 4, 2004, Gov. George Pataki, Mayor Mike Bloomberg, the New Jersey governor at the time, Jim McGreevey, and Silverstein laid a cornerstone at the Freedom Tower to mark the symbolic start of construction, but the building design was later scrapped for security reasons and architect David Childs came up with a new design.

Dara McQuillan, a Silverstein spokesperson, said construction workers will be at the site Thursday morning to survey the scene and over the next few weeks, they will build scaffolding and excavate the site.

A few years ago the developer said architects Norman Foster, Jean Nouvel and Fumihiko Maki would design the remaining buildings at the site. Silverstein selected Foster to build Tower 2 a few months ago and under the new construction schedule, Foster now has an extra year to work on the design. McQuillan said it is not yet clear if Maki and Nouvel will be able to do Towers 3 and 4 because they may not be available under the tighter timeframe for those towers – which are scheduled to be done in 2011.

Anthony Coscia, chairperson of the board’s commissioners, said it was Silverstein’s decision to hire an architect for Tower 2 first, although it was the Port Authority that had said repeatedly that Tower 2 would be ready for construction before the Tower 3 and 4 sites.

Kenneth Ringler, Jr., executive director of the Port, said they decided to change and build the bathtub from south to north in order to get the larger retail spaces in a proposed mall open sooner. Tower 2 will have smaller stores and will not be part of the mall.

The Port Authority received $478 million of federal money last July to build the Church St. bathtub but they had not yet designed it and construction is expected to begin within the next few months.

Coscia said he believed that starting office construction in the middle of 2007 meant the timeline would be sped up by six months, although Port Authority officials have said previously that they were hoping Tower 2 would start at the beginning of the year.

Coscia said the agreement with Silverstein was a “real turning point” and provided “a development plan that has real deadlines – deadlines on ourselves, deadlines on Silverstein Properties.”

Under the agreement the state is pledging to fill about one million square feet of offices in the Freedom Tower and to contribute an additional $250 million toward construction. The city and the Port will take up about 1.2 million square feet in Tower 4. The Port will also contribute $100 million towards the construction of the W.T.C. memorial.

Silverstein called it a “fair deal” Tuesday, the day he told the Port that he accepted their financial offer, but not all of their conditions. Under the deal, he gets control of the most valuable parcels and will give up about 40 percent of the tax-free Liberty Bonds and insurance money in exchange for giving up almost 40 percent of the commercial square footage. Even though he is expected to get the highest rents on the site because of the buildings’ larger floor plates and proximity to the train station, he said it would have been unfair for him to give up a disproportionate share of the money since the construction costs are relatively the same.

“The easiest thing to do is to do it on a prorated basis,” Silverstein said.

He will have the right to buy the W.T.C. retail space from the Port although he said he has not yet decided whether or not to do that. Currently, the Port and city have been arguing about whether or not to keep Cortlandt St. closed off to create more of a mall-like space or to open the street as the city favors.

After Silverstein’s Tuesday announcement it was unclear exactly how much of a deal there was because both sides disagreed on how much they would pay for the site’s infrastructure and Silverstein was objecting to provisions that would allow the Port to back out before September, penalize him if the state or city didn’t live up to commitments or if an outside lawsuit delayed the project.

By Wednesday, Coscia called the differences “minor issues” and Silverstein praised the framework agreement. Coscia said the Port still has until September to make a final deal, but each side has made enough of a commitment to allow construction to begin in the meantime.

Many Downtowners expressed relief that the delays looked to be over. “I’m an optimist,” said Robert Douglass, chairperson of the Downtown Alliance, made up of Lower Manhattan property owners. “I think it’s going to come together.”

Josh@DowntownExpress.com


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