WTC Development Talks Continue Ahead of Deadline
By Christina S.N. Lewis
The Wall Street Journal
March 11, 2010
Negotiations continued Thursday between developer Larry Silverstein and the Port Authority of New York and New Jersey who are trying to resolve an impasse over the redevelopment of the World Trade Center site before a critical deadline Friday.
Officials on both sides said they were making progress in reaching an agreement that would put the massive reconstruction project back on track, but serious differences remain. An arbitration panel in January gave them until Friday to come to an accord or face the risk of having the three-person panel step in and resolve the dispute themselves.
The two sides have been fighting virtually since the Sept. 11 terrorist attacks destroyed the complex and have come under fierce criticism for letting the site fester. They reached an agreement in 2006 that divided responsibility for the building between the two sides and put the estimated $12 billion project on more solid financial footing. But relations soured when the Port Authority fell behind its own construction schedule and Mr. Silverstein failed to find a private tenant or financing for his buildings as the economic downturn deepened.
The current dispute mostly concerns how to pay for the three office buildings Mr. Silverstein has the right to build. Mr. Silverstein is building one tower, but delays on his other buildings, would stall progress on the whole site. The structurally interconnected complex is also supposed to include a memorial, Santiago Calatrava-designed transit hub, performing arts center and other buildings.
Mr. Silverstein's group has offered to invest $250 million in new equity in exchange for public financing from the Port Authority for two of his three towers. The Port Authority has agreed to finance one tower but would only backstop the second if Mr. Silverstein finds a tenant for 20% of the building. The Port Authority also wants him to put in $300 million in fresh equity.
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