The long-delayed Deutsche Bank demolition got a little bit more expensive this week, as the Lower Manhattan Development Corp. approved another $2.5 million for the project.
That’s just a fraction of the roughly $280 million previously allocated to buy, clean and demolish the building, and it won’t be the last time the L.M.D.C. needs more money. The project’s price tag could rise by another $30 million before it’s done.
The newly allocated $2.5 million may help pay for the project’s rising legal costs. At a meeting Tuesday, the L.M.D.C. board approved an additional $130,000 for photocopying and document management, bringing the total for that purpose to $850,000. The board also approved a $700,000 increase to a contract with the law firm Dechert L.L.P., bringing Dechert’s compensation to a total of $8 million.
The L.M.D.C. has faced the scrutiny of Manhattan District Attorney Robert Morgenthau since the August 2007 fire in the building that killed two firefighters. The legal fees are associated with the fire and the conduct of the contractors the L.M.D.C. hired for the job.
The $2.5 million allocation comes from federal grant money designated for the south side of the World Trade Center site, where the Deutsche Bank building sits. The $2.5 million is all that is left of that grant, which originally totaled $63 million, said Avi Schick, chairperson of the L.M.D.C.
The new allocation will give the Deutsche Bank project enough cash to get through at least the end of November, but then the L.M.D.C. will need more money. The L.M.D.C. hopes to draw from the building’s prior insurers, who have already given $63.5 million, and from contractor Bovis Lend Lease, who may be found to be liable for some of the project’s delays, including the 2007 fire. If money from Bovis and the prior insurers is not forthcoming, the L.M.D.C. may try to use its federal funds instead and seek reimbursement later.
The L.M.D.C., which owns the 26-story Deutsche Bank building at 130 Liberty St., is currently cleaning it of 9/11 contaminants so it can be demolished. The cleaning is nearly complete, but demolition will not begin until after Labor Day because Bovis has not finished its final plans and submitted them to the city Buildings Dept.
Once the cleaning work finishes, “There will be a period of time now where there is just some mobilization going on,” Schick said at the L.M.D.C.’s board meeting Tuesday.
John De Libero, L.M.D.C. spokesperson, said demolition would take about six months, although L.M.D.C. President David Emil said last week that it was premature to give a timetable. If De Libero’s timeline is correct, the building could be down as soon as early March 2010.
— Julie Shapiro
