Silverstein is reportedly asking for at least $2.75 billion from the Port as compensation for violations to their 2006 agreement. The Port has missed deadlines in the agreement and paid hefty fines for turning the three office sites over to Silverstein Properties late. Silverstein argues that the delays forced him to wait until the credit market froze before he could get loans. The money he is asking for represents the amount he has paid in rent and insurance proceeds to the Port Authority since 9/11.
He filed for arbitration after attempts to come to a compromise failed.
The Port agreed to loan guarantees for Silverstein to build Tower 4, but refused to back Silverstein’s loans for Tower 2 at the northeast corner of the site.
“The market is telling us they shouldn’t rise,” Chris Ward, the Port’s executive director, said at a City Council hearing in August. “To build into a market that private capital will not enter means that you are effectively building socialized office space.”
The authority is also constructing the 9/11 Memorial, the W.T.C. PATH Station, Tower 1 (Freedom Tower), and hopes to build the retail complex planned for the base of the Silverstein towers.
Mayor Mike Bloomberg and Assembly Speaker Sheldon Silver, who both tried to mediate the dispute in the spring, argue that it is not feasible to build temporary retail spaces and construct offices later, so they pressed the Port to help Silverstein more.
The Port moved last week to reduce its dependence on Silverstein Properties. The authority needs the belowground and low-rise portions of the towers to be built because they contain infrastructure for the vehicle security center and the PATH hub. Some of the exits from the PATH hub, for example, were supposed to funnel commuters through Silverstein’s Church St. towers.
But last week, the Port decided to spend $20 million to redesign the site so that Silverstein’s towers no longer contain key public infrastructure. That will allow the Port to build its projects without relying on an agreement with Silverstein. The design changes will affect architect Santiago Calatrava’s PATH hub, the vehicle security center and the Freedom Tower.
The Port also authorized additional W.T.C. funds at last Thursday’s board meeting, including $140 million to build the complex’s sidewalks and streets, complete with trees and street furniture.
If Silverstein wins enough money from the arbiter he plans to continue building Tower 4 and will probably start on Tower 2. Both sides have agreed to put off constructing Tower 3 on Church St. in the short term.
The Port is also expected to get control of the Tower 5 site next year when the damaged Deutsche Bank building is expected to be demolished. The Port plans to wait for a tenant building at the Tower 5 site.
Both sides have been reluctant to speak publicly since the arbitration battle began. They each declined invitations from Downtown Express to submit columns for this year’s Progress Report.
Official. W.T.C. Target Dates
The Port Authority released these target dates for completing portions of the World Trade Center site a year ago and say they continue to be on schedule. Others, including the Lower Manhattan Construction Command Center in a confidential report, have said the targets are not realistic given the complexity of the site.
Memorial Plaza: September 2011
9/11 Museum: 2013 (January – June)
Transportation Hub: October 2013 – June 2014
Freedom Tower: 2013 (April – December)
Fulton Transit Center: June 2014
