The Port Authority and developer Larry Silverstein have reached a deal--or at least a deal to get to a deal--allowing the construction of office towers at the World Trade Center to move forward.
Port Authority Chairman Anthony Coscia called it a "framework for coming to an agreement."
The new arrangement represents hundreds of millions of dollars in increased public subsidies for the site compared to a deal reached in 2006. Government officials recognized that with the economic downturn, Silverstein was not going to be able to raise the money he needed to fulfill that original agreement, jeopardizing the future of the office towers. Publicly controlled projects like the Path terminal--which have continued to go up despite the impasse--were also threatened because the infrastructure at Ground Zero is so interconnected.
This time, the Port Authority agreed to guarantee private loans Silverstein will take out to construct 4 World Trade Center. Despite its name, it will be the first private office tower built. The developer hopes to have it completed by 2013.
The state and the city agreed to contribute $210 million for 3 World Trade Center, some of which will be in the form of property tax breaks. The state and the city also agreed to guarantee $300 million in loans for the tower--though that's just a portion of the tower's total cost. That building doesn't have a projected completion date but will move forward once Silverstein leases 20 percent of the office space and raises $390 million in private equity. Port Authority officials insisted on Silverstein putting private money at risk so that he'd be less likely to walk away from it if it failed.
The third tower, called 2 World Trade Center, is the largest of the bunch and the least likely to get finished. Both sides are proposing to bring the tower's substrucuture up to street level and build it only once there's sufficient office demand. The deal calls for all of the tax-exempt Liberty Bonds--created by Congress in the months after the 2001 attacks to help with reconstruction--to be funneled to towers 3 and 4, meaning that Silverstein will have no cheap financing available for Tower 2 once it does come time to build it.
There is also a fourth tower--it's called 1 World Trade Center, and was formerly known as the Freedom Tower. The right to build it was given over to the Port Authority in the 2006 agreement and is not subject to the new reorganization. The steel for about 20 stories is already up, and construction is continuing with a projected completion date in 2013.