Port Authority Approves Subsidies for Murdoch

The Port Authority of New York and New Jersey wants to encourage 21st Century Fox and News Corp. to move their headquarters to the yet-to-be-built 2 World Trade Center. And at its meeting on Thursday, the board unanimously approved what it called a $9 million subsidy to convince the companies to relocate. But critics wonder whether those corporate giants should be given this kind of carrot by the Port — a public agency.

Margaret Donovan is with the Twin Towers Alliance, a group which has long battled with the agency and developer Larry Silverstein about the World Trade Center site. "You can and should tell Larry Silverstein and Rupert Murdoch to figure it out without us," she said. "They can well afford it."

The Murdoch-owned companies are considering renting about 1.5 million square feet. Agency chairman John Degnan said giving them a "modest" rent break made sense, because the proposed deal would help spur the construction of the building by landing a name-brand anchor tenant.

"Not to spend $9 million dollars against the benefit that the Port Authority would realize here would be, frankly, a dereliction of duty," he said.

His enthusiasm was echoed by outgoing executive director Pat Foye, who said the deal was "not [just] a good opportunity, not a very good one," he said, but "a compelling opportunity." The reason? "This is a project that’s going to generate $500 to $600 million in capital capacity for transportation."

If that estimate proves correct, it could be compelling indeed, given that the Port is facing enormous capital expenditures for a new Port Authority Bus Terminal, as well as providing up to half of of the funding for a new trans-Hudson rail tunnel.

Janno Lieber, an executive with Silverstein's company, said in a statement that "this is a deal that always made sense for the Port Authority...And it’s a deal that makes sense for the City, the State and the entire region because it will generate 10,000 construction jobs and 12,000 – 15,000 permanent jobs, as well as allow us to finally put back all of the office space that was destroyed by terrorists 14 years ago.”

But the giveaway marks a shift in thinking for the Port, which had previously promised not to spend public money on 2 World Trade Center. Foye called it a one-time deal. "I will not recommend that Tower 2 get any other subsidy for any additional tenant other than Fox and News Corp.," he said. "Period."

Foye will leave the agency next year. 21st Century Fox and News Corp. have yet to formally approve the deal.