Trade Center Rebuilding Talks
Again Hit Snag but Will Continue
Talks to jump-start the long-delayed rebuilding of the World Trade Center became stymied again as the region's two governors and New York City's mayor failed to agree on a negotiating stance with the site's private developer, but talks are continuing nonetheless.
New York Gov. George E. Pataki and New Jersey Gov. Jon S. Corzine, who control Ground Zero's owner, the Port Authority of New York and New Jersey, and New York Mayor Michael R. Bloomberg couldn't settle upon a position to take with real-estate developer Larry Silverstein, who owns the legal right to rebuild the office space there, several people involved in the negotiations say.
The three men held discussions in recent days hoping to craft a plan in time for the Port Authority's board of commissioners to approve at their monthly meeting yesterday afternoon. That didn't happen.
But participants said talks would continue. "The parties involved here are probably closer than they've ever been before," said Port Authority Chairman Anthony R. Coscia, from New Jersey.
The talks signal a shift of focus away from Mr. Silverstein to the complex web of government involved in rebuilding. Mr. Silverstein and Port Authority negotiators had agreed upon the broad outlines of a deal on Tuesday. But those terms needed to be approved by the bistate agency's commissioners, who are appointed in equal number by the governors of New York and New Jersey. Mr. Bloomberg is involved because he controls $1.67 billion in tax-free bonds for the project.
According to one of the negotiators, the lack of a deal makes the start of the site's signature skyscraper, the Freedom Tower, "unclear." A groundbreaking was planned for April.
The three government entities disagree on how much of a rent reduction to give to Mr. Silverstein. Mr. Silverstein's lawyers and Port Authority staff agreed Tuesday that the developer would forgo the rights to rebuild two of the five office towers, including the signature Freedom Tower, and around $1 billion in insurance money. The Port Authority would reduce the value of rent Mr. Silverstein owes under his $3.2 billion, 99-year lease, by $300 million to $400 million in net-present-value terms, after accounting for the reduction in the amount of space Mr. Silverstein would develop.
A Port Authority official said one of the sticking points is assurances made by New York State that it could persuade the federal government to rent close to one million square feet of space in the Freedom Tower for $47.50 a square foot, a number that would reduce the Port Authority's risk in the $2.2 billion tower.
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