Gov: WTC site doesn't need developer

August 3, 2009 2:32:48 PM PDT
New York Gov. David Paterson gave World Trade Center site developer Larry Silverstein an ultimatum Monday in prolonged talks over his lease to build three planned office towers, saying ground zero rebuilding could go ahead without him if necessary. In a letter that outlined parts of old offers of partial financing for two of the towers, Paterson pressed the two sides to meet this week to work on resolving the dispute.

But the governor said he had told the site's owner, the Port Authority of New York and New Jersey, to start drawing up new plans so the agency could finish rebuilding the Sept. 11 memorial and other public projects regardless whether Silverstein completes his buildings.

"This will ensure that, should you and the Port Authority not be able to reach an agreement, the site will no longer be subject to the fate of the real estate market or these negotiations," Paterson wrote.

Silverstein's camp expressed doubt that the governor's move would help, and Mayor Michael Bloomberg's administration and state Assembly Speaker Sheldon Silver said it would hurt.

"From the beginning, we've said both parties would have to compromise to avoid stalemate and further delays on the site," Bloomberg spokesman Andrew Brent said. "Unfortunately, today's proposal doesn't achieve that and would move us in the wrong direction."

The agency and Silverstein have negotiated for months - with Silverstein threatening to seek arbitration and interventions from top state lawmakers and meetings convened by Bloomberg going nowhere.

Silverstein has asked the Port Authority to guarantee more than $3 billion in financing to build two of his planned towers. He has been unable to obtain private financing in the tight real estate market and has said the agency has delayed his construction schedule by falling behind on projects - including a vast, winged transit hub designed by Spanish architect Santiago Calatrava - that surround his.

Janno Lieber, who heads trade center construction for Silverstein, echoed those complaints Monday. He said Paterson's "ideas will not likely put us on a path" to building the two towers.

The agency has agreed to back one tower currently under construction and put up some money for a second tower, but only if Silverstein comes up with more than $600 million first.

The Port Authority has said that putting up more for the private venture would siphon money from other key projects, such as improvements to LaGuardia Airport and a new rail tunnel serving Pennsylvania Station.

The towers and the agency's projects are intertwined through underground utility infrastructure, as well as a vehicle security center, train tracks and streets that would connect the office towers and the memorial.

The Port Authority didn't immediately have cost estimates or a timetable for reconfiguring the plans to disentangle its projects from Silverstein's.

"We appreciate the governor's leadership in working to reach a solution that both protects public resources and ensures the public projects keep moving forward," agency spokesman Stephen Sigmund said.

But Silver, who tried to broker an end to the stalemate more than a month ago, said he feared the governor's proposal would spur "yet another standstill at the World Trade Center site and many more years of delay."

Paterson echoed much of the Port Authority's position, though he said he deliberately avoided specific numbers to allow for negotiation. He added that he would ask the Port Authority to waive millions of dollars a month in rent on the second and third towers "until the market returns" to build them.

The governor asked both sides to meet Wednesday and give him a progress report Aug. 12.