Freedom Tower

Governor Paterson today announced an audit of the schedules and budgets at the World Trade Center site, with his new Port Authority director Chris Ward due to report back by the end of June.

The review, announced two hours after the Port Authority acknowledged it is facing a two-month delay on the site for Tower 2, is already underway at the bi-state agency, as the Paterson administration seems eager to shed any blame for the unrealistic timetables set in the Pataki era.

From a letter from Mr. Paterson to Mr. Ward:

The rebuilding of the World Trade Center site must encompass clear and achievable timelines and budget goals that must be met at every step of the way. Furthermore, the stakeholders and the public must be kept up to date on progress in meeting the timetables and budgets as we move forward.

 read more »

The Port Authority has reached an agreement with the Chinese real estate firm Vantone to lease space in the Freedom Tower, a deal that, if completed, will mark the first major private sector lease for the tower.

Vantone agreed to take 190,000 square feet for a 22-year lease to make a “China Center,” starting at $80 a square foot.

However, there’s reason to keep the champagne corked for now. Developer Larry Silverstein broke off a lease deal in 7 World Trade Center with Vantone in 2006 when the firm failed to produce a letter of credit in a timely fashion. The firm then backed out of a lease deal at 195 Broadway.  read more »

After well over a year of below-grade work, the Freedom Tower has reached the street level. Those in the Spitzer administration had often pointed to this milestone as a time at which the public would begin to understand that there was active work going on at Ground Zero.

Picture courtesy of the Port Authority; a few weeks ago we got a look at the construction site and shot our own photos.

Yesterday morning we took a little jaunt downtown to check out the progress of the Freedom Tower. Accompanied by some folks from the Port Authority, which is developing the tower, we took a few shots from the construction site. Work is slated to rise above street level later this year.

For now, the sub-grade work seems to have a whole lot of workers installing a whole lot of cement and rebar. The site was mostly empty and the vast majority of the work has come within the last year. The Port Authority said they still are on schedule for completion in 2012.  read more »

The Port Authority is looking for a firm to run the observation deck at the Freedom Tower, located on the 102nd floor of the building. (The above aerial image simulates what the view would look like.)

The 107th-floor observation deck in the old World Trade Center, named Top of the World, saw a flow of some 2 million visitors annually. That observation deck, handed over to private operator Ogden Entertainment in the mid-1990's, underwent a $6 million renovation in 1997, which included installing exhibits and videos for visitors, who paid an admission fee to the deck of $10 for an adult when it opened, according to a Times article at the time.

The Port Authority is planning to release a request for qualifications for operating the 18,000-square-foot observation deck next month, a document intended to survey the private sector for interest, according to a Port Authority spokeswoman. The agency plans to put the operating contract out to bid in the final three months of 2008.

The search comes after the Port put out a similar request earlier this year for an operator of a restaurant on the 100th and 101st floors of the building formally known as One World Trade Center.

Statements from Port Authority execs after the jump.  read more »

With the hole at Ground Zero gradually filling in, the Port Authority is putting out its feelers for a company to develop and manage a two-floor restaurant on the 100th and 101st floors of the 102-story Freedom Tower.

Tomorrow the Port Authority expects to issue a request for expression of interest (RFEI) for the restaurant, seeking early, nonbinding bids from developers.  read more »

Cushman & Wakefield won what once would have been a dubious honor but now sounds not so bad: the contract to broker the Freedom Tower--or rather, "1 World Trade Center, the Freedom Tower." The Port Authority chose the firm over competitors Colliers ABR, GMAC, Jones Lang LaSalle and Newmark Knight Frank.

Press release after jump.  read more »

• Jay McInerney's long-going goodbye to the Upper East Side continues with his final trips to Elio's ("Who dares to serve lasagna in this neighborhood? Gottta love it"), Bar and Books (for "uptown swells"), and Pinkberry ("a great place to watch girls.") [House & Garden]
• Despite community efforts (which have included the old handcuffed-to-tree trick), the 19-year-old Nueva Esperanza (New Hope) Garden will be turned into an $80 million luxury condominium, plus the Museum for African Art. Scarily, of the city's 40 to 50 gardens "in danger of being developed," half are in East Harlem. [City Limits]
• The Freedom Tower's costs rise, and the grumbles grow louder. But what do a few extra billion dollars here or there matter? [Architectural Record News]
• For a family-centric ad, Corcoran fills the Guccione mansion with more babes [above] than it ever had in its Penthouse magazine days. [Curbed] - Max Abelson
  • 0 comments

The Real Estate was wrong about one thing: predicting that Mike Petralia, the president of the Convention Center Development Corporation would be leaving at the end of March. It turns out, he will stay through June--but in an undefined capacity. Starting April 16, Barbara Lampen, assistant director of the Freedom Tower project at the Port Authority, will take over his job.

Is that a sign of the caliber of mess that the convention center expansion is becoming?

The announcement was made last Thursday by the state economic development agency.

Full statement after jump.  read more »

- Matthew Schuerman Correction: An earlier post mischaracterized the way in which the announcement was distributed.

The Empire State Development Corporation flipped one of the seven floors of the office condo it bought at 125 Maiden Lane for an 8 percent profit in four months, co-chairman Pat Foye said on Thursday. Under the Pataki administration, the ESDC sold its office condo at 633 Third Avenue in midtown in November and purchased the lower Manhattan one, saying that would be cheaper.

The new buyer, the Guttmacher Institute, paid $10.2 million.

Mr. Foye said after the agency's monthly meeting that he had not decided whether or not ESDC would move into the remaining six floors at 125 Maiden or try to buy back its current location from its new owner. He also said the 8 percent profit did not take into account the expense of renting its current location. (The ESDC had been subletting at 633 Third, and had not yet moved into 125 Maiden.)

He did say, however, "We don't want to move twice, once to Maiden Lane and then again to the Freedom Tower. And I think there is something to be said about being in proximity to our colleagues in state government" that are staying on in 633 Third.

- Matthew Schuerman Correction: An earlier post gave an incorrect sales price that Guttmacher paid.

It’s looking good these days for downtown Manhattan to become one of the great commercial real  read more »

The board of the Port Authority of New York and New Jersey approved $500 million worth of construction contracts for the Freedom Tower on Thursday afternoon, according to a press release, following up on its agreement to take over the building late last year and Gov. Spitzer's begrudging commitment earlier this week. - Matthew Schuerman

"Everybody who called me or responded said they agreed with what we said," Douglas Durst, developer of One Bryant Park, told The Real Estate on Wednesday afternoon.

He was talking about the reaction to the ad that Mr. Durst and fellow real estater Anthony Malkin placed that morning in major New York newspapers. The ad objected to moving ahead with the Freedom Tower.  read more »

After an engineer and an architecture critic took a couple more whacks at David Childs' Freedom Tower, Governor Spitzer on Tuesday morning said in a statement that it "may not have been the one we would have designed" but that it "must be built and we must get moving," according to the Associated Press. - Matthew Schuerman

• Blackstone setting sights on Freedom Tower?
[NY Post]
• "Handshake" seals Macklowe-Blackstone deal.
[NY Post]
• Gramercy building goes for $130.5M. [2nd item]
[NY Post]
• No. 7 extension could stymie 2nd Avenue Subway.
[NY Post]
• Landmarks OKs experimental playground.
[NY Times]
• Queens College moves ahead with dorm plan.
[Daily News]
• Report: Midtown office space a relative bargain.
[NY Sun]
• Stuy Town sale helps MetLife profit surge.
[NY Sun]

Did we miss any New York City real estate news this morning? Please send along tips and links.

• 0 comments

• Spitzer likely to approve Freedom Tower.
[NY Times]
• New owners plan big changes for former Albee Square.
[NY Times]
• Related's condo plans for former Dakota Stables.
[NY Post]
• Old Town Bar, Graydon Carter feud.
[NY Post]
• City Council mulls bill to tighten reins on bars.
[NY Sun]

Did we miss any New York City real estate news this morning? Please send along tips and links.

• 2 comments

• Crews install first steel column of Freedom Tower.
[Journal]
• Pataki settles for Freedom Tower columns.
[NY Times]
• Study: Foreclosure for one-fifth of subprime loans.
[NY Times]
• Gucci close to major lease at 56th and Fifth?
[NY Post]
• Dubai group may buy city's Mandarin Oriental hotel.
[NY Post]
• Bus-shelter building boom gets underway.
[NY Post]
• Silver close to giving Atlantic Yards an OK.
[NY Post]
• Silvercup may be big winner in 421-a reform.
[Daily News]
• Disputed subway entrance near Bloomingdale's may open.
[NY Sun]

Did we miss any New York City real estate news this morning? Please send along tips and links.

• 1 comment

The Port Authority and Larry Silverstein announced that they finalized April's shuffle at Ground Zero which puts the Freedom Tower moves into government hands. Sort of final that is, but the number of loose ends ($1 billion in missing insurance money and whatever the lawyers find in actually doing the documents) is getting smaller.  read more »

Just how afraid are we of the Freedom Tower?

Newspapers carried stories yesterday quoting government workers and Port Authority chairmen saying no to the idea of working in the Freedom Tower. But it is a question regularly asked in New York Times polls: "Would you be willing or not willing to work in one of the higher floors of a new building at the World Trade Center site?"

An amazing 40 percent--or about 335 respondents--said last month that they'd be willing, which is about the same as it was in 2002.

Explainable if the same 335 people get called all the time.

-Matthew Schuerman

The announcements are coming one-by-one to seal up the April agreement between the Port Authority and Larry Silverstein--designs for the next three towers, a million square feet in commitments--but one promised element that you won't see by Thursday's deadline is any sort of conclusion about who will run the 428,000-plus square feet of retail space at the World Trade Center site.

In April, along with taking over the Freedom Tower, the Port Authority agreed to sell the retail operating rights to Silverstein. The problem with doing so was that the Port Authority had already promised to let Westfield, an Australian mall operator, bid on the retail rights first. Somehow, the Port Authority would have to reject Westfield's offer, or issue such a discouraging prospectus that the mall company never would want the thing in the first place, all the while avoiding lawsuits.

Little wonder the Port Authority hasn't worked this one out.

Westfield, for one, is acting as if it will not let go easily. "Westfield is working within the process and is having ongoing discussions with the Port," spokeswoman Katy Dickey told us. "Westfield expects to exercise its right of first offer."

Silverstein, meanwhile, is still interested. "The caliber of retail has tremendous influence on the whole project," a real estate executive said. "The tenants upstairs want retail that is both high quality and also that will be useful to employees."

This is not a deal breaker, at least not yet, however.

"We don't see that as a barrier to reaching a final agreement this month," said Janno Lieber, Silverstein's project director for the World Trade Center site.

-Matthew Schuerman

Rudy Giuliani will be campaigning for New Hampshire Republicans on Oct. 12, his first political trip to the presidential battleground since 2004.

Jeanine Pirro says she's tougher on perverts than Andrew Cuomo.

State campaign contribution limits didn't stop AIG from giving $50,000 to Eliot Spitzer in one day and $90,000 to George Pataki on another.

The head of the Port Authority won't force PA employees to relocate to the Freedom Tower, and once said he'd quit his job over moving employees into the building. Other prospective employees say they don't want to work in the Freedom Tower.

The city's drinking water is being protected from biological weapons by the hardy bluegill fish.

Mayor Bloomberg's plan to fight poverty includes a $1,000-per-child tax credit. The City Council, which needs to approve the overall plan, will hold hearings on Thursday.

Speaking at the New School yesterday, former Sen. John Edwards said, "There is a natural disconnect between market values and moral values."

The Transport Workers Union changed rules on how to elect its union leaders in the run-up to their December elections.

The New Jersey Nets extend their lease at home until 2012, but can move to Brooklyn earlier. Donald Trump won't pay $1.4 million in local taxes on his new project at Jones Beach, which he built but the state owns.

A state senator in New Jersey was paid $35,000 "to lobby himself."

An Associated Press photographer with alleged ties to terrorists is detained by the U.S. military.

And Errol Louis says the normally sedate judicial race on Manhattan's Lower East Side has turned into a mud fight.

-- Azi Paybarah

• Will the government solve the Freedom Tower's impending tenant problem by sending state and federal agencies to fill it up? Not if those employees--some of them veterans of two WTC attacks--refuse to go. As Port Authority chairman Anthony Coscia (right) has said, it "would simply carry too much emotional weight." Might Mr. Pataki force folks down there? (New York Times)
• As first-home and second-home ownership numbers rise for minorities, racism in realty has increased too. Enlightened Manhattan isn't immune: the Department of Justice is receiving claims from "upscale sections in and around New York," charging brokers with "steering minority clients away from nonminority neighborhoods." (WSJ)
• Can too much bright green healthiness be a bad thing? Manhattan will find out--maybe as soon as early next year, when two new Whole Foods Markets open at Greenwich & Warren and Bowery & Houston. (Lucky Brooklynites will some day get their 52,000-square-foot baby in Park Slope/Gowanus). (Curbed)
• "The Good Life" at Hudson River Park's Pier 40 museum presents a global vision of how we use our public spaces. East Berlin gets 100 blue deck chairs, Dublin gets singing sidewalks (really), and NYC gets measly little Lincoln Center, Chelsea's High Line, and the East River Waterfront. (Citi Limits)
• The Nets (whose stars include 'Jefferson Thomas') have extended their lease at New Jersey's un-glamorous Continental Arena through 2013. They can bail out, though, as soon as Frank Gehry's Atlantic Yards glass arena is ready, which should be anytime now. (New York Times)
- Max Abelson  read more »
• 0 comments

• The big news is that the Freedom Tower (far, faraway from completion) has a tenant for nearly half its space--1 million out of 2,600,000 square feet. That tenant is our kindly Big Bro--federal and state agencies like the NY Governor's Office. The even bigger news is that this probably has more to do with "symbolism and politics" than the long-term welfare of WTC real estate. (New York Times)
• Who has helped transform a "dowdy" section of Fifth Avenue into a soon-to-be wonderland of fashionable exclusivity? Diddy, aka Puff Daddy, aka Sean Combs, of course. His burgeoning Sean Jean retailer has upped the status of 500 Fifth--a building that is now forcing out its less trendy retail tenants in order to serve its growing upscale clientele. (Crain's premium)
• This week, The Post's omniscient Dear John column delves into everything you've ever wanted to know about real estate investment. The real lesson: "When the consensus is that real estate will never be a good investment again, that's when it probably will be a good investment." Invest away! (NY Post)
• Chinatown has had some hard-luck years since 9/11-- but luxury condominiums are coming to the rescue. Among the new crop is Hester Gardens (at Hester and Mott), and seven more posh developments are on the way. Penthouses have been going from $1.5-3 million, attracting even (take a breath) non-Chinese buyers. "This is either a renaissance," says a local museum director, "or gentrification to the hilt." (New York Times)
• A teenager named Ben Passikoff had the genuinely brilliant idea to photograph the city's "ghost signs" (those ancient facade advertisements for "steam power, garters [and] taxidermy.") His book--the kid has a book--captures the happy, bygone days before LCD billboards and those illegally mammoth scaffolding ads. (NY Daily News)
- Max Abelson  read more »
• 2 comments

From left, the Freedom Tower (David Childs) as we know and love it; and designs unveiled today for 200 Greenwich Street (or Tower 2, by Sir Norman Foster), 175 Greenwich Street (or Tower 3, by Sir Richard Rogers), and 150 Greenwich Street (or Tower 4 by Fumihiko Maki).  read more »

-Matthew Schuerman

An architecture firm named Skidmore, Owings & Merrill--the group behind buildings named the Lever House, Sears Tower, and the AOL Time Warner Center--is turning 70 years young.

Clear your calendar: On September 6, little SOM is throwing a birthday bash at Aby Rosen's private Lever House terrace.

Grab the new book while you're there (it's cutely subtitled: 'The Experiment Since 1939'), and be sure to ask how the Freedom Tower or diminutive Burj Dubai are coming along.  read more »

- Max Abelson

• The Post gets a scorchingly hot scoop on the Post's very own headquarters in Rockefeller Center West. Boston's Beacon Capital will pay $1.5 billion for the building at 1211 Sixth Ave., which will merely amount to "the second-largest single asset sale in the world." (New York Post)
• All we wanted for Independence Day was some good Freedom Tower news. Instead, construction workers refused to show up for work this week, on account of the labor dispute among heavy equipment operators--plus, of course, the Teamsters and a group of highly demanding underground workers nicknamed "sandhogs." (NY1)
• Finally, Manhattan's luxury real estate buyers are catching on to the wonderful trend of hotel-condos (the hot "real estate product.") Donald Trump says his new Spring Street hondo will be the tallest building in Soho, while Dallas' Lincoln Property has announced its own at 12-18 West 55th--next door to the St. Regis, which itself is offering 24 condos on two floors for $1.7-7.3 million. (The Real Deal)
• Meanwhile, regular builders are leaving behind condominiums--the long-time "darling of the development community," according to Crain's, at its most poetic--and beginning to "court" the rental market. Real estate can be so romantic. (Crain's premium)
• Or is the romance gone? Four unbearably beautiful Beaux-Arts town houses on West 56th may be demolished to make room for a 16-story apartment complex. The buildings haven't been designated as landmarks--even though, for example, 33 West 56th is the former speakeasy immortalized by "Night After Night" (in which Mae West makes her big screen debut by introducing herself to the doorman as "the fairy princess, ya mug.") (The New York Times)
- Max Abelson
• 0 comments

Now that the Port Authority, the Governor, Mayor and Larry Silverstein are all in agreement about the World Trade Center, they are ganging up on the insurers who have yet to pay Silverstein more than $2 billion in court-ordered awards. Today, Governor Pataki's press office e-mailed a statement saying, "I have spoken with Governor Corzine and Mayor Bloomberg's offices and together we have asked the Port Authority and Silverstein Properties to commence appropriate legal action within the next several days to gain the resolution and assurances we need." Silverstein seconded that with a statement of his own.

Sources said a lawsuit could be filed early next week. Port Authority spokesman John McCarthy wouldn't confirm the schedule but said, "We are exploring our legal options."

Under the April 26 agreement, about 35 percent of the available insurance money was supposed to be transferred from Silverstein to the Port Authority to go towards the Freedom Tower but so far the insurance companies have not agreed that they would make the switch.

Oh, and anybody who thought the Rebuild Them Now Movement was dead should check out the comments on our previous Freedom Tower post. -Matthew Schuerman

Larry Silverstein's Liberty Bonds got their first approval today by the state's Liberty Development Corporation, which officially "induced" $1,672,550,000 of the low-interest bonds that will be used to build towers 2 through 4, according to a press release from the Empire State Development Corporation. Next comes a public hearing, followed by a second vote. The city separately is expected to induce another $921 million in Liberty Bonds in July. Plus, there may be other bonds in store for the Port Authority, which is in charge of building the Freedom Tower--that is, as much of it as will get built. -Matthew Schuerman

Port Authority Chairman Anthony Coscia resurrected doubts about the Freedom Tower's future at a Crain's breakfast this morning, six weeks after April's sunny announcement which transferred ownership of the Freedom Tower from Silverstein Properties to the bi-state transportation agency.

"The agreement contemplates that we will go between now and September and we will decide whether or not we have the kind of leases for that building which make it a financially viable project," Coscia said.

Coscia did not specify what would happen if those leases were not signed. "It is possible at that stage we would rethink the project," he said, when asked whether the tower would be scaled back. A Port Authority official told The Real Estate later that the tower would be built--the question was whether it would attain its 1,776-foot height.

Coscia also said that the construction underway that would bring the tower up to grade should continue.

None of the publicity surrounding the April's agreement with Silverstein Properties even hinted that securing 1 million square feet in leases from government entities would be a problem. Coscia, while saying that negotiating with the federal government is slow, said, "We are pleased with the progress to date and I am optimistic that by September we will have leases."

Optimistic? If this is something you need to be optimistic about, how do things look if you are realistic?

-Matthew Schuerman

It was always obvious that Gov. Pataki wanted the World Trade Center debacle resolved more than Gov. Corzine ever did. Well, how much more?

$250 million more.

According to the framework agreement signed April 26, and obtained by The Real Estate through the Freedom of Information Law, the $250 million subsidy that will go towards building the Freedom Tower will come from the bi-state transportation agency's "commitment to the state of New York under the Port Authority's Regional Transportation Program." (Download full document in PDF here.)

See, the Port Authority, which is about the only agency out there wealthy enough to spend money on things outside its operations, sets aside "discretionary funds"--colloquially known as "pork"--every once in a while that can be used at the discretion of each governor. The money that is going towards the Freedom Tower, according to spokesman Steve Coleman, came from the $500 million divied up after the March 2001 toll increase. New Jersey used its half to buy some new bi-level train cars for New Jersey Transit. Pataki is using his to subsidize the building of the Freedom Tower. (The rest of the tower's $2.1 billion cost is supposed to come from bonds that will be paid off by rents, but we will learn more once the whole deal finally closes in September.)

-Matthew Schuerman

... is how Larry Silverstein is now characterizing the April 26 Freedom Tower pact, the A.P. reports.

-Matthew Schuerman (via Crain's)

On April 25, lawyers for the 74-year-old Larry Silverstein took part in a conference call with Port  read more »

Silverstein Properties has just announced it will have a "Freedom Tower Mobilization" tomorrow morning at 8:30. Perhaps this is what people do when they already have held a "groundbreaking" for a building but then had to put everything on hold for almost two years. Or maybe groundbreakings in general have lost their meaning at Ground Zero since they have rarely coincided with the beginning of actual work.

The press release just sent out ends with: "News trucks will not be allowed onto the site in order to accommodate mobilization of heavy construction."

These guys are serious, folks.

-Matthew Schuerman

The Port Authority board just approved the deal with Larry Silverstein over in the agency's Park Avenue South headquarters. The developer signed the "framework agreement" this morning. For the most part, it sounds like the Port Authority accepted Silverstein's last minute amendments, although the agreement still will not close until September.

Chairman Anthony Coscia acknowledged, "As we turn that framework into a definitive agreement, there will certainly be issues that we will have to tackle together, but they are issues largely about the way of implementing what the parties have decided to do."

P.A. Executive Director Kenneth Ringler took his bow in front of a gaggle of reporters. "Hopefully we are not going to be as newsworthy. You will just see construction going on. It has been nice knowing all you guys."

Construction on the Freedom Tower could begin within days. Aren't you excited?

-Matthew Schuerman

The developer met with Port Authority officials today and gave a news conference later, saying he agreed to give up the Freedom Tower--after building it for a fee--and Tower 5. He said he was hewing closely to the joint state-city-Port Authority offer last week, but he added some conditions...like getting the Port Authority to ratify the deal before September and making sure that he is not held responsible if someone else causes delays.

His project manager, Janno Lieber, told reporters, "The Freedom Tower is ready to begin as soon as the relocation of utilities takes place and as soon as the agreement is reached. We could start tomorrow, or in a matter of days."

Mayor Bloomberg, asked shortly afterwards, seemed willing to pretend that Silverstein was agreeing even though these details could prove trickier than they first appear. "He apparently gave a speech today saying that that's what he would do and that's great," he said, according to a transcript provided by the Mayor's office. "And the one thing we cannot do, and will not allow to have happen, is you agree in concept and then try to nickel and dime and go on forever."

-Matthew Schuerman

Reuters is reporting that Larry Silverstein has just accepted an offer to allow the Port Authority to build the Freedom Tower instead of him.

According to Reuters, the implication is that ground could be broken on the Tower in days or weeks.

We've got Matthew Schuerman down there now, where Larry made the announcement; watch this space for more.

- Tom McGeveran

Officials of the Port Authority have apparently handed Larry Silverstein two proposals: a sweetened version of what was offered earlier and a tuck-your-tail-between-your-legs-and-get-the-hell-out-of-here option that would leave the developer with little profit and no glory.

The real news is that Mayor Bloomberg, until now a hold-out, has reached an agreement with Governor Pataki and that the rift between the New Jersey and New York contingents of the Port Authority has healed, as Charlie Bagli's lede in the Times shows:  read more »

After months of political bickering and false starts, officials from the Pataki, Corzine and Bloomberg administrations said last night that they were finally in agreement on a workable financial plan to rebuild at ground zero and have the Port Authority of New York and New Jersey take control of the Freedom Tower.

In 1972, when Northern Ireland’s bloody Troubles had a quarter-century still to run, the Belfa  read more »

In 1972, when Northern Ireland’s bloody Troubles had a quarter-century still to run, the Belfast-b  read more »

The Politicker got its hands on a letter signed by the entire New York congressional delegation telling New Jersey governor Jon Corzine to keep his hands off Ground Zero.

Corzine, of course, has power at Ground Zero through the bistate Port Authority, which owns the site.  read more »

Here he is talking about the Freedom Tower:

"My first look at the plan financially isn't encouraging to me. They need to be restructured in my view," New Jersey Gov. Jon Corzine told reporters.

Larry Silverstein may be in a better negotiating position than people think. Sure, he is paying the Port Authority more than $10 million a year for 16 desolate acres that yield no manna, but a year ago, Silverstein said he would not need to begin drawing on the $3.5 billion in Liberty Bonds—the center of this whole dispute, remember--until 2009. “Applicant anticipates a series of Liberty Bond closings in 2009,” his April 13, 2005, Liberty Bond application states, in response to a question about when the applicant wants the proceeds from the bonds to be available.

In other words, Silverstein thought he could get by on his insurance proceeds, paying the rent, erecting much of both the Freedom Tower and Tower Two, and beginning design work on subsequent structures, for another three years. And at the time the application was submitted—days before the old design was scrapped—Silverstein was operating on a different timeline, under which the first tower would go up at the end of 2009, about a year before current projections.

Nor should the lack of tenants at 7 World Trade Center, which will open in May, be taken too seriously. According to an April 11, 2005, report by Merrill Lynch, Silverstein put away $57.1 million to pay off interest for the first two years to buy time for leasing up. Merrill guesses that the break-even rent at 7 WTC is really in the low- to mid-30s, meaning that, if desperate, Silverstein can drop his asking rent by another $15-20 a square foot, attract more customers, and still pay off his debt on that tower.

Silverstein's finances are sort of a black box. Mayor Bloomberg claims to have penetrated it and sees bankruptcy looming. But on the basis of this application, Silverstein appears financially strong enough to wait until he gets the deal he wants.

-Matthew Schuerman

Robert Yaro, president of the Regional Plan Association, was never a huge fan of the Freedom Tower—never a huge fan of office space downtown in the first place. But in an interview with us today he went even farther, nudging along the gathering bandwagon of what Reps. Ney and Jones might call “Freedom’s foes”:

“I think people close to the situation understand that the Freedom Tower is the least marketable commercial space down there to the extent there is any demand for commercial space at all.... It certainly should be rethought. There are really questions about its marketability. Certainly the phasing should be rethought. [Towers] Two through Four ought to be built first. The Freedom Tower should be built not until the market is established for office space....

"It’s my understanding that as part of the construction of the PATH terminal, the Port Authority should be in the position to move ahead with the retail space and to expedite the excavation of the bathtubs for Tower Two and that is what they should be doing."

-Matthew Schuerman UPDATE: Jeremy Soffin, vice president of public affairs at R.P.A., called to take issue with the above characterization of Robert Yaro as “no fan of office space downtown in the first place.” We readily agree that Yaro has advocated mixed uses, rather than an exclusively residential or retail district. We had been referring to his recent endorsement of Mayor Bloomberg’s proposal, which would cut the planned 10 million square feet of offices by 14 percent to make way for apartments and a hotel.

Kabul Scribe Writes One for the Record   To the Editor:    read more »

Governor George Pataki might once have thought that he would top off the Freedom Tower by the end of  read more »

Kabul Scribe Writes One for the Record

To the Editor:  read more »

In a letter to the Governor written today, Larry Silverstein gives his version of the breakdown in talks, stating that “the Port Authority abruptly ended the negotiations and headed straight to the press to engage in offensive personal assaults.”

Silverstein goes through no fewer than eight instances when he says he complied with the Governor’s request (although, in some cases, the developer made out better as a result). And then finally, “I urge you to personally demand a return to the negotiating table for everyone to remain until an agreement has been reached.”

News-wise, the letter states, in writing, Silverstein’s willingness to share at