Silverstein surrenders right to develop Freedom Tower

Larry Silverstein, the Manhattan developer who has fought a nearly five-year battle to maintain control of rebuilding on the World Trade Center site, on Tuesday surrendered the right to develop the Freedom Tower, the tallest and most symbolic of the buildings on the 16-acre property.

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The agreement was hailed as the end of months of stalemate and inaction at Ground Zero that has increasingly become an embarrassment for New York officials. All five buildings on the site are planned to be completed by 2012 under the new framework.

Under its terms, Mr Silverstein will yield control of the Freedom Tower and one other building to the Port Authority of New York and New Jersey. But he will still have the right to build three other buildings on the site, which are thought to have more commercial potential than the Freedom Tower.

Michael Bloomberg, New York’s mayor, and officials from the Port Authority have been putting pressure on Mr Silverstein for several months in the hopes of wresting some control of the project from him. Talks have been acrimonious at times, with both sides accusing each other of impeding progress on the site.

“Make no mistake, we have made real concessions,” Mr Silverstein said. ”This is about moving the rebuilding forward as quickly as possible.”

Tuesday’s agreement was a re-structuring of the 99-year lease that Mr Silverstein signed just six weeks before the September 11 2001 terrorist attacks. Under the new terms, Mr Silverstein will turn over 38 per cent of the insurance proceeds he received to the Port Authority. He will also continue to pay rent to the Port Authority as if the Twin Towers still existed and were fully leased.

But Mr Silverstein still stands to gain from the terms of the new lease. He will be paid a fee to build the Freedom Tower. And he would also gain control over a shopping centre on the site.

Both sides have acknowledged that the Freedom Tower – estimated to cost about $2bn – carries significant risks as a commercial enterprise, since it is not expected to attract corporate clients. But George Pataki, New York governor, has pledged to secure tenants from federal and state agencies, a strategy that recalls the early days of the original World Trade Center. And construction costs will be offset by tax-free Liberty bonds in addition to the insurance proceeds.

Source: Financial Times
http://news.ft.com/cms/s/192ae362-d4ac-11da-a357-0000779e2340.html

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Editor’s Note: Larry Silverstein benefited greatly from September 11th attacks, particularly from the destruction of his WTC Building #7. In total, he collected more than $5 billion dollars in insurance settlements. Some conspiracy theorists allege him being part of a bigger inside job. (Another reference).

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