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Rechler: WTC deal signals a new Port Authority
After months of public debate, the Port Authority's board of commissioners voted unanimously Wednesday to advance construction of a third tower at the World Trade Center -- by striking the proper balance between public- and private-sector commitment.
Before the roll call vote, the board secretary publicly noted whether any commissioners asked to be recused. This seemingly straightforward process is now a major shift in how the Port Authority of New York and New Jersey conducts business.
Leaving the investigations related to the George Washington Bridge aside, there has been no issue as controversial for the agency as the rebuilding of the World Trade Center after the Sept. 11 attacks.
The World Trade Center went from being the locus of national tragedy to a symbol of government mismanagement, leading many to wonder why the authority was even involved. In the end, though, the agency is ultimately responsible for the completion of the World Trade Center.
Recognizing this, when Gov. Andrew M. Cuomo asked me to serve as vice chairman, he directed me and his other representatives to transform the site into a symbol of national pride and government effectiveness. This was no easy task. By the summer of 2011, 1 WTC had risen to only the 75th floor, the memorial was at a standstill, and there was no reliable construction budget or project timeline.
Three years later, the World Trade Center is becoming what it was envisioned to be. Later this year, 1 and 4 World Trade Center will open to tenants. The most sought-after retailers are signing leases at the site's emerging transportation and retail hub. Fences that circled the site for more than a decade are coming down. And in April, the 9/11 Memorial Museum opened. As a result, lower Manhattan is undergoing a revitalization with the World Trade Center at its epicenter.
Another important component of bringing this development to completion is the construction of 3 World Trade Center. Even with a 500,000-square-foot tenant anchoring the building, the development appeared to be infeasible because of the lingering hangover in the financial markets after the Great Recession.
To overcome that, Silverstein Properties, the tower's developer, asked the authority nearly a year ago to restructure its financing deal to reflect market conditions. From the outset, the authority insisted that any agreement not reduce funding for the authority's other regional projects.
In negotiations, we also set conditions for ourselves. It was, we decided, long overdue for the authority to change its approach to large, controversial transactions -- especially the expectation that commissioners would rubber-stamp deals orchestrated behind closed doors.
As acting chairman, I wanted the debate over 3 World Trade Center to be open, with input from commissioners and the public. The process resulted in the best deal for the public, and will advance the construction of a $2-billion tower -- creating more than 3,000 construction jobs, and securing Group M as its anchor tenant. Additionally, the deal will not require the authority to guarantee construction loans and will bring in more than $360 million in ground rent, retail proceeds and other sitewide fees.
This public-private partnership, shaped by each commissioner, is consistent with the board's responsibility and duty to the authority. And, the process by which we reached agreement will make the authority more effective. More remains to be done. I look forward to working with fellow commissioners and the governors of both states to build on this foundation and make the agency one the region deserves.
Scott Rechler is acting chairman of the Port Authority.