Volume 22, Number 01 | The Newspaper of Lower Manhattan | May 15 - 21, 2009

‘Fed up’ with W.T.C. delays, Silver says build 3rd tower now

By Julie Shapiro

Government officials and Lower Manhattan residents are banking on a summit scheduled for Thurs., May 21 to get World Trade Center rebuilding back on track.

Assembly Speaker Sheldon Silver called for the meeting between the site’s stakeholders last Friday after delivering sharp words to the Port Authority, which owns the site, and Silverstein Properties, which is supposed to build three office towers there. The two parties are at an impasse over how many towers to build and how to pay for them.

“I am fed up with the stalling, and I am exasperated by the current state of the World Trade Center project,” Silver said at a Downtown-Lower Manhattan Association breakfast last Friday. “That we are where we are after this much time is an embarrassment to our city, our state and to our nation.”

Silver offered to broker an agreement to revivify the project, but only if the Port agrees to help Silverstein build two of his three office towers, and if Silverstein invests more money in the project.

Mayor Michael Bloomberg immediately took up Silver’s call for a meeting and offered to host it at Gracie Mansion. Gov. David Paterson praised Silver as well and is expected to attend Thursday’s meeting, along with the Port Authority executive director Chris Ward and developer Larry Silverstein. New Jersey Gov. Jon Corzine is invited as well.

Julie Menin, chairperson of Community Board 1, said Silver is right to call a meeting of the stakeholders.

“Every single day that goes by with the lack of an agreement is a bad day Downtown,” Menin said.

Last month, the Port and Silverstein took diametrically opposed positions: Silverstein, which has responsibility for Towers 2, 3 and 4, wanted the Port to help finance Tower 2 and Tower 4, but the Port only wanted to help with Tower 4, where the Port and city have committed to lease 1.2 million square feet of space. Instead of skyscrapers, the Port planned to build short retail podiums along Church St. where Towers 2 and 3 were supposed to rise.

On Friday, Silver demanded for the first time that Silverstein and the Port find a way to build Tower 2 in addition to Tower 4. Tower 2, in the northeast corner of the site, would “complete the circle” formed by One World Trade Center, the Freedom Tower, to the west, and Tower 4 to the south, Silver said.

Silver’s call for Tower 2 put him more in Silverstein’s camp than the Port Authority’s, and he almost sounded like Larry Silverstein as he spoke optimistically of Downtown’s recovery and used Silverstein’s 7 W.T.C. as an example of building for the future.

“What we have to do is be ready for the next boom cycle in the economy,” Silver said. He later told reporters, “We can’t sit around, wait for the economy to improve and then build into what may be the next downturn.”

But Silver also insisted that Silverstein take on more of the risk of building the office towers.

“We cannot expect the taxpayers to foot the entire cost of all that we want and need to build,” Silver said. Silver shares Silverstein’s confidence in Downtown’s future, but, Silver said, “If you are in the position of reaping the rewards of that confidence, you also have to be in the position of putting some of your private capital at risk as well.”

Menin, with C.B. 1, said the retail at the World Trade Center site is extremely important to the community and she wants it to be a top priority along with the oft-forgotten performing arts center. The community board has supported retail podiums in lieu of office towers in the past.

Menin said this week that the office towers are important, too, but she questioned whether the Port should finance a tower that has no tenants. But she said she supports Silver’s proposal for both parties to invest more money in the project.

At Monday night’s meeting of C.B. 1’s W.T.C. Redevelopment Committee, several board members were hesitant about giving any more help to Silverstein.

“I’m very opposed to the use of public funds to bail out Silverstein,” board member Barry Skolnick said. “I’m afraid the mayor and governor are going to give away the kitchen sink…. I want to limit the taxpayer burden.”

Skolnick said he wanted the project to move forward, but not at an unlimited cost, and several other board members agreed.

The committee tried to pass a resolution praising Silver for trying to resolve the dispute, but board members were afraid they would be seen as endorsing a deal whose details they might not support. The committee ultimately decided not to pass a resolution.

The Port Authority and Silverstein Properties both responded to Silver’s remarks on Friday without backing off their prior positions.

The Port released a statement praising Silver’s call for Silverstein to share the risks of the project. Rather than helping Silverstein finance Tower 2, the Port wants to focus its resources on the memorial, PATH hub and office towers already underway, the statement said.

Janno Lieber, president of Silverstein’s W.T.C. Properties, also released a statement, saying, “New Yorkers deserve a timely and full rebuilding of the World Trade Center.” In the statement, Lieber points to Silverstein’s 7 W.T.C. as an example of successful real estate built during a downturn.

Just after Silver’s speech, the Silverstein camp appeared happy that Silver called for a third tower and was not concerned that he called for the firm to take on more risk. Lieber’s statement does not say whether Silverstein would consider taking on more risk, as Silver requested.

An agreement between the Port and Silverstein could be hard to come by now, because both sides have said they see no place for compromise.

The Port has said Silverstein already received enough subsidies and should use his 9/11 insurance money rather than looking to the Port for an estimated $3 billion of assistance. But while Silverstein did receive about $4.5 billion in insurance money, he reportedly has only $964 million left to build his three towers along Church St.

The Port wants Silverstein to wait to build Towers 2 and 3 until he can get private financing for them, but that can’t happen until the credit markets thaw. With the exodus of financial firms from Downtown, the Port insists that Lower Manhattan does not need Tower 2’s 2.8 million square feet of office space. A Cushman & Wakefield report commissioned by the Port Authority predicted that if Tower 2 rises now, it will take until 2026 until it is leased.

Silver sounded far more optimistic than that on Friday, saying that the five years it would take to build Tower 2 would be plenty of time for the economy to turn around — and if not, then New York would have bigger problems.

“We are building for 2014,’15 and beyond,” he told reporters. “If we don’t have confidence that our economy can rebound by then, then we should not be building anyplace in this city and give up.... That’s not the spirit of New York.”

In lieu of building Towers 2 and 3, the Port wants to build six-story retail podiums, which would add necessary belowground infrastructure and give the community a long-awaited amenity.

However, Silver questioned whether the retail could succeed without a third office tower, Tower 2, on the site.

“You need to have the office buildings to have the workers who are the potential customers,” Silver said.

Joe Daniels, president of the National September 11 Memorial & Museum, said after Silver’s speech that the site does not necessarily need three office towers to support the retail. The millions of tourists who will flood the memorial each year will infuse the neighborhood with economic activity, no matter how many office workers are on the site, Daniels said.

Daniels does not have a preference of whether Tower 2 rises now or later, as long as work on the site moves forward and all of the stakeholders remain committed to opening the memorial on the 10-year anniversary.

“The memorial should be okay under either scenario, except for the scenario where construction just stops,” Daniels said.

Through the post-9/11 years, Silver has often criticized the Port— he began pressing the authority to get the Church St. tower sites ready four years ago — but Friday’s speech may have been the first time he called on Silverstein to do more. During a similar impasse in 2006, Silver took Silverstein’s side, and Bloomberg sided with the authority.

In his speech Friday, Silver recalled the previous delays and stalemates at the World Trade Center site, which were characterized by mistakes, unrealistic plans and an absence of communication.

Speaking somberly, Silver concluded, “That’s the part of our history that we cannot afford to repeat.”

With reporting by Josh Rogers

 

 

 


 

 


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