When the Port Authority and developer Larry Silverstein return to the bargaining table Thursday, the framework of the deal that was being worked on before World Trade Center talks broke down last week needs to be adjusted.
The Port had agreed to develop the least desirable W.T.C. commercial lots – the Freedom Tower and the Deutsche Bank site – and was letting Silverstein retain his right to develop the most viable and important lots – Towers 2, 3 and 4 on Church St., which will also have a much-needed shopping center. The dispute now boils down to money – notably, how much will Silverstein’s rent to the Port be reduced, and how much W.T.C. insurance money will he turn over in exchange for not being saddled with the worst sites.
The framework is bad because in order for it to be fair to the Port, hence the public, Silverstein will have to turn over significantly more insurance money than is being talked about in news reports. Mayor Bloomberg and the Port have raised legitimate questions about Silverstein’s finances and we are concerned that any fair deal will delay the rebuilding of Church St. – the most essential component to end the site’s hole in the ground feeling – because Silverstein will have less money. Is Silverstein really going to build three offices at the same time urgently, when he is paying, not collecting, rent at the three sites, not to mention carrying the sluggishly-renting W.T.C. 7 tower?
The Port should negotiate the right to build at least one of the Church St. towers in addition to the Freedom Tower, and let Silverstein develop Tower 2, the Deutsche Bank site when it’s ready, and perhaps Tower 3 or 4. Giving the Port a stake on Church St. will also make the project more politically and financially secure because it will make the New York-New Jersey authority fully responsible for construction financing and setbacks.
An important benefit of having the Port build one of the Church Street buildings in addition to the Freedom Tower is that it will incentify the Port to get the underground work done on Church St. more quickly, and enable the Port to have the option – perhaps under a new governor – to phase Freedom Tower construction after the Church St. tower, or not build Freedom Tower at all in its present form.
Silverstein is not to blame for the delays, the Port and Gov. Pataki are. We are now halfway through the fifth year after 9/11 and the main reason there is still a hole in the ground is the Port hasn’t even finished designing, or started building, the eastern bathtub needed before construction can begin on Church St. Pataki, who shares control of the agency with his Jersey counterpart, failed to push the Port hard enough to get this work underway.
Charles Gargano, Pataki’s economic development head and vice chairperson of the Port, said last week he wants to speed up bathtub construction by six months and Kenneth Ringler, whom Pataki hired to be Port Authority executive director, said he is trying to begin work on the bathtub in the second quarter of this year. These dates should become deadlines with consequences. And Silverstein must make binding commitments to adhere to strict design and construction timetables for any sites he would control before he gets any tax-free Liberty Bonds; and he must agree to surrender the bonds if he misses a deadline.
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