Developer Larry Silverstein spoke to a rally of construction workers in Midtown Monday. They called for two insurance companies to pay Silverstein $800 million he needs to rebuild the World Trade Center.
Silverstein, Port, workers guarantee insurance fight
By Josh Rogers
About 300 construction workers rallied Monday with World Trade Center developer Larry Silverstein and the Port Authority against two holdout insurance companies whom they say owe $800 million to rebuild ground zero.
Pay up now, the workers chanted outside the Hilton New York in Midtown as the National Association of Insurance Commissioners met inside. Truckers driving by honked their horns in support.
Silverstein and the Port, which owns the site, have reached agreements with many of their insurers. Most of the speakers at the rally pointed out that the two worst holdouts are foreign-based firms Allianz of Germany and Royal & Sun Alliance of England. U.S. Rep. Anthony Wiener, a 2005 mayoral candidate whos expected to run again in 2009, called for a state investigation into the insurance firms at the rally, organized by the Building & Construction Trades Council of Greater New York.
Silverstein told the crowd that the C.E.O.s of both firms were co-signers of ads in 2001 saying: Insurance will be a foundation upon which we will recover and rebuild. You can depend upon us to facilitate claims
with compassion and to meet our responsibilities.
The firms also promised to fulfill the hopes and prayers of those who have been taken from us.
Where I come from in New York City, we call that chutzpah, Silverstein said to cheers. He said whether its small business owners in Lower Manhattan, or Hurricane Katrina victims in New Orleans and Mississippi, insurance companies always delay making payments as long as they can.
He said the firms are collecting 9 percent interest on the $800 million. The float amounts to a huge amount of money, he told reporters.
Allianz released a fact sheet challenging many of the claims of Silverstein and the Port. One apparent area of agreement between the Port and Allianz, though, is that the firm is not required to make any payments now.
The Ports counsel testified at an Assembly hearing last year that the insurance payments to rebuild were voluntary. Anthony Shorris, the Ports new executive director, said on Monday that the firms should do the right thing, the precise phrase Kenneth Ringler, his predecessor, used last year.
Allianz claims its obligation to pay will begin when all five W.T.C. towers are built. Construction on the Freedom Tower is underway but the Port has not yet prepared three Church St. sites for construction and there is no design yet for the fifth site on Liberty St., where someday a bus garage and tower are expected to replace the damaged former Deutsche Bank building still overlooking the site.
When 16 insurance companies were threatening to stop payments last year, Silverstein said construction could stop in a month if they followed through with the threat. He did not say Monday whether it was a matter of months or years before W.T.C. construction would halt if he did not get the $800 million from Allianz and Royal.
He has received just over half the $4.6 billion he has won from the insurance companies and $3.3 billion in tax-free Liberty Bonds have been dedicated to the W.T.C.
The Port and Silverstein will divide the insurance money under an agreement reached last fall, whereby the Port got the development rights to the Freedom Tower and Tower 5 on Liberty St. Allianz and Royal contend the new agreement changes their obligations.
Silverstein originally sought $7 billion in insurance payments based on the legal theory that the plane attacks on the Twin Towers represented two separate occurrences. He won that argument on 10 of his 26 polices, including three owned by Allianz and Royal or their affiliates.
Royal recently sold off its American subsidiary, now called Arrowpoint Capital. Silverstein and the Port are challenging the sale and filed a lawsuit last month. Arrowpoint and Royal did not respond to a request for comment.
Relations with other firms, however, are going better. Silverstein announced an agreement Wednesday with TIG insurance, which will pay him and the Port $12.535 million. The firm, which lost on the two-occurrence question, had already paid Silverstein $9.1 million and agreed to pay the second $9.1 million and 90 percent of the interest Silverstein claimed.
With reporting by Brooke Edwards