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Stalemate stalls WTC projects

Work continues on the Freedom Tower at the World Trade Center in New York in this May 13 photo. New York Gov. David Paterson on Monday proposed rebuilding ground zero without the site developer if there is no resolution to prolonged construction negotiations. AP Photo by Mark Lennihan

Work continues on the Freedom Tower at the World Trade Center in New York in this May 13 photo. New York Gov. David Paterson on Monday proposed rebuilding ground zero without the site developer if there is no resolution to prolonged construction negotiations. AP Photo by Mark Lennihan

Jennifer Peltz
AP Writer

New York — New York Gov. David Paterson is giving World Trade Center site developer Larry Silverstein an ultimatum in prolonged talks over his lease to build three office towers.

The governor said ground zero rebuilding could go ahead without the developer if necessary.
In a letter that outlined parts of old offers of partial financing for two of the towers, Paterson Monday pressed the two sides to meet this week to work on resolving the dispute.

But the governor said he had told the site’s owner, the Port Authority of New York and New Jersey, to start drawing up new plans so the agency can finish rebuilding the Sept. 11 memorial and other public projects regardless of whether Silverstein completes his buildings.

“This will ensure that, should you and the Port Authority not be able to reach an agreement, the site will no longer be subject to the fate of the real estate market or these negotiations,” according to Paterson’s letter.

Silverstein’s camp expressed doubt the governor’s move would help, and Mayor Michael Bloomberg’s administration and state Assembly Speaker Sheldon Silver said it would hurt.

“From the beginning, we’ve said both parties would have to compromise to avoid stalemate and further delays on the site,” said Andrew Brent, Bloomberg’s spokesman. “Unfortunately, today’s proposal doesn’t achieve that and would move us in the wrong direction.”

The authority and Silverstein have negotiated for months, with Silverstein threatening to seek arbitration and interventions from top state lawmakers, and meetings convened by Bloomberg going nowhere.

Silverstein has asked the Port Authority to guarantee more than $3 billion in financing to build two of his towers. He has been unable to obtain private financing in the tight real estate market and has said the authority delayed his construction schedule by falling behind on projects — including a vast, winged transit hub designed by Spanish architect Santiago Calatrava — that surround his.

Janno Lieber, who is in charge of the trade center construction for Silverstein, echoed those complaints Monday. He said Paterson’s “ideas will not likely put us on a path” to building the two towers.

The authority has agreed to back one tower under construction and put up some money for a second tower, but only if Silverstein comes up with more than $600 million first.

According to the Port Authority, putting up more for the private venture would siphon money from other key projects, such as improvements to LaGuardia Airport and a new rail tunnel serving Pennsylvania Station.

The towers and the authority’s projects are intertwined through underground utility infrastructure, as well as a vehicle security center, train tracks and streets that would connect the office towers and the memorial.

The Port Authority didn’t immediately offer cost estimates or a timetable for reconfiguring the plans to disentangle its projects from Silverstein’s.

“We appreciate the governor’s leadership in working to reach a solution that both protects public resources and ensures the public projects keep moving forward,” agency spokesman Stephen Sigmund said.

But Silver, who tried to broker an end to the stalemate more than a month ago, said he fears the governor’s proposal would spur “yet another standstill at the World Trade Center site and many more years of delay.”

Paterson echoed much of the Port Authority’s position, though he said he deliberately avoided specific numbers to allow for negotiation. He said he will ask the Port Authority to waive millions of dollars a month in rent on the second and third towers “until the market returns” to build them.

The governor asked both sides to meet Wednesday and give him a progress report Aug. 12.

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