Big Real Estate Jittery Over Future of Terrorism Insurance

Friday, June 20, 2014

World Trade Center 1 rises above lower Manhattan. World Trade Center 1 rises above lower Manhattan. (Natalie Fertig/WNYC)

Many commercial building owners and developers are worried about the future of a little-known federal insurance program it considers indispensable. The 12 year-old Terrorism Risk Insurance Act, or TRIA, is up for renewal, but that’s become more complicated after the primary election defeat of House Majority Leader Eric Cantor.

“We would not be able to build or refinance our buildings without it. Because banks insist on having insurance for all risks,” said Douglas Durst, Chairman of the Durst Organization, whose properties include One World Trade Center, Bank of America Tower, and the Condé Nast Building.

The act provides a guarantee that if a policyholder has private terrorism insurance, and damage from an attack exceeds $100 million dollars, the federal government will step in to cover most of the liability and damages above that point.

Over the last few months, Durst and other members of New York real estate establishment, have been concerned that TRIA – passed in the aftermath of 9/11, to calm a spooked insurance industry – may be in trouble.

For months, conservative Republicans have been saying it’s time to pare back TRIA.

Then, House Majority leader Eric Cantor was defeated in his primary race for re-election.

Behind the scenes, Cantor had reached out to building owners, even recently visiting the Real Estate Board of New York offices in Manhattan. 

“There is no question Eric Cantor was helpful,” said Steven Spinola, REBNY’s president.

Without the support of Cantor who worked in real estate development prior to serving in Congress, Spinola is now watching the Republican leadership shuffle closely, and looking out for new allies on the Hill.

This week, Rep. Randy Neugebauer (R-TX) introduced a bill that would raise the threshold for federal government assistance from damage from bomb or plane attacks to $500 million.


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Comments [5]

sinha from india

Very nice article about real state. Thanks.

Jul. 10 2014 04:59 AM

In this case the real conservatives should be applauded for their transparency and integrity.

Let the free market play its role and require businesses to cover their risks via private insurance. The sublime beauty of legit insurance is the assessors working to accurately measure risk.

So Durst must fight to retain its get out of jail free card.

If I were Durst I'd be throwing one helluva 4th of July party in the Hamptons, with a very political guest list!

Be sure to invite Mr. Marritz.

Jun. 22 2014 11:54 AM
W from NYC

If you believe that the threat of terrorism within the US is at least in part due to our government's foreign policy and military activity, then perhaps the government should be subsidizing this sort of insurance. I hope if you think this is an inappropriate use of federal money then you don't support the subsidizing of flood insurance for homeowners who choose to live in natural harm's way.

Jun. 20 2014 07:27 PM
Dave From NorthEast Bronx

Corporate welfare at its worst! These arrangements with big business return nothing comparable to what they receive.

Jun. 20 2014 08:57 AM

The government does not belong in the insurance business.

Jun. 20 2014 08:04 AM

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