Volume 19, Number 2 | May 26 - June 1, 2006

Reporter’s notebook

One opening, one bombshell at the W.T.C.

By Josh Rogers

Dickens might have called it a “Tale of Two Days.”

Thursday, Larry Silverstein and Port Authority officials said World Trade Center office reconstruction — which had been delayed for years and finally began last month — could stop in June if the insurance companies started acting like, well, insurance companies – that is only paying out money when they had to. By Tuesday, Silverstein said “there is no reason” why the rebuilding schedule will be delayed and Kenneth Ringler, the Port’s executive director, said “there is no way we will let this stop.”

Nothing much had changed in five days, but Tuesday was the day to celebrate the reopening of 7 W.T.C., just across the street from the W.T.C. site (although perhaps miles away in terms of political complications). Silverstein said he wanted to “avoid [thinking about] the challenges” on a celebration day.

Tuesday did feel like a celebration. Fifth graders from the two elementary schools closest to the site, P.S. 89 and P.S. 234, sang with Irish tenor Ronan Tynan. Silverstein unveiled a sculpture by Jeff Koons in a new public plaza built next to 7 W.T.C. Lou Reed led a group of Downtown musicians in a free concert. And real tenants are moving into the building.

“Another opening – this one is a real one,” said Catherine McVay Hughes, who has attended countless ceremonies over the last five years and is chairperson of Community Board 1’s W.T.C. Redevelopment Committee. Silverstein Properties moved in last Friday, the three architects designing buildings for the site’s East Side will also be setting up shop, and three rent-paying tenants are beginning to customize their spaces and will move in the fall.

Last week, Silverstein hosted a state Assembly hearing in his building and released a joint letter he and Ringler sent to their 16 insurance firms. Silverstein said attorneys for some of the firms had indicated they would reduce their payments if Silverstein and the Port finalize their framework agreement in which the Port would take back control of the Freedom Tower and Tower 5 sites.

Silverstein said if he doesn’t get an insurance check in June the work that began at the end of April will stop. “Without the insurance proceeds you can’t meet the milestones,” Silverstein told the panel headed by Assembly Speaker Sheldon Silver, whose district includes the W.T.C. “You need that on a monthly basis.”

The developer said the firms are looking for a “new excuse” to “shirk their responsibilities.” Silverstein and the Port expect to get $4.65 billion in insurance money as a result of a series of lawsuits and settlements.

The Port’s general counsel, Darrell Buchbinder, however, said repeatedly at the Thursday hearing that the insurance company payments up until now have been “voluntary” and he did not say the companies were prohibited from stopping the payments, at least temporarily.

Ringler called on the firms to “step up and do the right thing.”

Jacques Dubois, chairperson Swiss Re America, one of Silverstein’s largest insurers, told The New York Sun that the new agreement could change the firm’s payments.

“There was a conceptual framework that has been agreed to and we need to see details of the final agreement to determine if it affects our coverage obligations,” he said.

***

The Port on Thursday also released the framework agreement it signed with Silverstein Properties and revealed that the deal was not as tough on the authority as officials had implied previously

The Port can take back the leasing rights from Silverstein if he misses a deadline. Ringler told Silver the agreement has no penalties against the Port if it misses a deadline

“It was a good negotiation on my part,” Ringler said, drawing a few laughs in the crowd. “The Port Authority is committed to move this project forward,” he quickly added.

The day the authority’s board of commissioners approved the agreement, April 26, Anthony Coscia, the board’s chairperson, said it was “a development plan that has real deadlines – deadlines on ourselves, deadlines on Silverstein Properties.”

Steve Coleman, a P.A. spokesperson, did not comment this week on what Coscia meant by “real deadlines.”

Silver focused on why the Port still hadn’t built the eastern “bathtub” needed to allow construction on Church St. “They could have chosen to do this anytime until now, is that correct,” he asked the developer, who said that may be true.

Ringler said it took time to design the protective bathtub and it had been unclear who would pay for it. Gov. George Pataki, who shares control of the Port with the New Jersey governor, said last spring that he was going to transfer about $600 million of 9/11-related transportation money to the W.T.C. site, and the Federal Transit Adminstration formally approved a $478 million payment to the Port for the bathtub last July. Ringler said he hoped bathtub construction would begin this summer and that the Tower 3 and 4 sites would be ready for office and retail space construction by next summer. The Tower 2 site would be ready by mid-2008 under the current schedule. The four office towers are expected to be done by the end of 2012.

***

Silverstein and the Port have been getting along better since signing the general agreement, something made clear at Tuesday’s celebration. Ringler praised Silverstein as a risk taker, although he added there may more disagreements in the months ahead as the two sides try to agree on all of the details needed to be decided by September 20, when the framework deal expires.

“Larry and I have yelled at each other and we probably will again,” Ringler said, in perhaps the only negative comment during the ceremony Tuesday.

Seven W.T.C., which Silverstein owns, is separate from the W.T.C. site and has been free of many of the complications across the street. No one died when 7 W.T.C. collapsed and thousands of human remains were not found there. There is no memorial at 7, no train center underground, and no multi-billion-dollar infrastructure network like the one that must be built at the W.T.C. site. The Port owns both locations, but at the W.T.C. site, it owned the buildings too and had signed a lease with Silverstein two months before the attack.

***

Tuesday certainly was a less complicated day. Hundreds of people came to listen to the music, admire the plaza, and look up at the new building. Silverstein said he felt a “tremendous sense of pride and satisfaction for me to be able to look at this building and see what we have accomplished in five years since Sept. 11.”

Koons told Downtown Express that he had been designing a sculpture specifically for the new plaza, but decided it was too big and would overwhelm the trees and flowers. He decided one of his previous works, “Balloon Flower,” was the right scale and mood for the area. Several children who climbed it the first day seemed to agree. His works typically sell for several million dollars, but he said he and his family decided to donate it indefinitely.

“We’ve put it in on a long-term loan,” he said. “It depends how long people enjoy it.”

Ken Smith, who designed the plaza, was thrilled to see crowds enjoying it and said he thought the feeling could spread to the other side of Vesey St. “Everything works together – the building and the plaza and the artwork,” he said. “I think it bodes well for the Trade Center.”

Josh@DowntownExpress.com


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