BY Aline Reynolds
After five months of deliberation, the Port Authority of New York and New Jersey has finalized an agreement with real estate mogul Larry Silverstein to redevelop the World Trade Center.
On Thursday, the Port’s Board of Commissioners unanimously approved a deal at its August 26 meeting that “[calls] for the immediate restoration of the east side of the site to at least street level, the rational phase in of the site’s office towers with financing risk shared among all stakeholders, and the completion of the W.T.C. Transportation Hub without significant additional cost or delay.”
The consensus follows several months of disputes between the Port and Silverstein Properties on how to proceed with developing Towers 2, 3 and 4 on the eastern half of the W.T.C. site.
Under the deal Silverstein will receive up to $1.6 billion in public financing and subsidies for Towers 3 and 4. Silverstein must raise $300 million for Tower 3 and pre-lease 400,000 square feet of the office building. In return, the Port, New York City and the state will guarantee $600 million for the project.
Should Silverstein be unable to pay off his debt on Tower 3 after the buildings have opened, Silverstein would have to forfeit the building, and the government would be responsible for paying off the loans. If all goes as planned, Tower 4 will be completed in 2013, and Tower 3 will rise in 2015. The date of completion for Tower 2 is yet to be determined — Silverstein is supposed to start building it up to street level immediately, according to the contract.
“This agreement caps a two-year effort to restructure, rationalize and, above all, provide a renewed level of certainty over the development of the site,” said Port Executive Director Chris Ward in a statement. “It will make certain the entire site is rebuilt while sharing the risk among all stakeholders in a way that protects our limited public resources.”
The agreement was drafted on March 25 with Silverstein Properties, the city and the state, to be finalized within 120 days (by late July).
But the Port stalled: July came and went, and there was no sign of a final deal with Silverstein.
“I think it’s important that an agency like the Port Authority not be simply a rubber stamp,” Anthony Coscia, chairman of the Port’s board, told Downtown Express. “So the fact that this took a while is a reflection of the fact that the board very seriously deliberated on a lot of critical issues, and spent a lot of time. There were agreements and disagreements, but at the end of the day… I think we came to an agreement that everyone’s comfortable with.”
A source acquainted with the contract and discussions said there were no major sticking points between the Port and Silverstein.
That being said, some board members were opposed to the agreement due to its substantial public investment and unwillingly signed it as part of an informal bargain with other commissioners to invest in the modification or replacement of the Bayonne Bridge, among other New Jersey projects, the source said. The source requested anonymity due to the sensitivity of the issue.
“Downtown has emerged as one of the world’s most exciting mixed-use neighborhoods, offering an unparalleled blend of high-tech office space, retail, residential living and cultural attractions,” said Silverstein in a statement. “This agreement will ensure that we continue this momentum with a new generation of cutting-edge, green skyscrapers becoming available starting in 2013.”
