March 22, 2006

The fate of development at Ground Zero hangs in the balance as developer Larry Silverstein and the Port Authority of New York and New Jersey attempt to renegotiate Silverstein's lease to the twin towers.

New York Governor George Pataki had set a March 14 deadline for the parties to resolve the lease contract, but state officials walked out of talks with Silverstein just before the deadline. They claimed, among other things, that the developer had asked for too great a share of the rebuilding money (much coming from the $2.9 billion insurance proceeds and from tax-free New York State Liberty Bonds) in exchange for giving up rights to build the World Trade Center Freedom Tower and two of the site's other five planned office towers. The Port Authority also wants Silverstein to share in the projects' infrastructure costs. According to the Port Authority's proposal, Silverstein would keep the rights to the three planned towers along Church Street. He would cede the Freedom Tower, which is thought to be the least economically feasible building on the site.

Silverstein obtained the lease to the towers from the Port Authority just a few months before the September 11 terrorist attacks. He is expected to pay the Port Authority $125 million in rent this July. A recently-released city report claimed that Silverstein will likely run out of money and default on his lease after building only two out of Ground Zero's five planned towers.

Pataki, the Port Authority, Mayor Michael Bloomberg have since said that Silverstein is putting his financial interests over the public's need to rebuild the site. It has now been almost five years since 9/11 and construction is still barely underway at Ground Zero. Silverstein has blamed the agency for leaving the negotiations.

Silverstein offered the Port Authority a new proposal on March 17. In a release following that proposal, Silverstein said "Everyone on the Silverstein team stands ready to roll up our sleeves and get the job done." The Port Authority has pledged to submit a counter-proposal shortly, although many speculate that the conflict will soon end up in court.

Sam Lubell