N.Y., N.J. Port Authority to Launch 90-Day WTC Review

In the face of delays and cost overruns at the the World Trade Center site in New York City, the Port Authority of New York and New Jersey will begin a 90-day review of the projects at the site and has implemented a new governance structure to guide reconstruction.

New York Gov. David Paterson told reporters that although the Ground Zero site is "flourishing" with rebuilding, each project at the site is "fraught with delays and cost overruns."

"Rebuilding is not going as it was scheduled - the promises of the past do not seem to be realistic," Paterson said. "We need to address this problem, and we need to address it now."

Complicating the construction process has been the involvement of 19 public agencies, two private developers, 101 construction contractors and sub-contractors, and 33 different designers, architects, and consulting firms.

The new governance structure is meant to streamline and better coordinate the process. It created a steering committee drawn from the Port Authority, the mayor's office, the Lower Manhattan Development Corp., New York's Metropolitan Transportation Authority, developer Silverstein Properties Inc., and the National Sept. 11 Memorial and Museum. The Port Authority will oversee program management on 26 projects, including transportation, infrastructure, commercial, and cultural projects.

Two office towers and a memorial museum were scheduled to open in 2011 and two other towers, including the Freedom Tower, a 1,776-foot tall office tower, were scheduled to open in 2012. The site will eventually have five office towers. Projects at the site have been or will be financed by more than $3.5 billion of Liberty bonds.

"The question surrounding the World Trade Center rebuilding is not an 'if' all of the projects will be built, but rather a 'when,' and for how much," said executive director Christopher Ward. "It's a construction job now - the planning and the politics is over."

The rebuilding effort has been hampered by its complexity, and in a report presented to the board yesterday, Ward identified 15 unresolved issues that need final decisions to be made in order to mitigate costs and scheduling issues.

"To forecast completion dates or final costs before these decisions have been made would only send us down the same path of unrealistic commitment we have seen before," Ward said.

A number of the issues revolved around a transit hub designed by Spanish architect Santiago Calatrava. The structure was designed to have a roof that opened to the sky, but the ability to open may be scrapped to save money. Other issues involved coordination, as some projects can't be done until others are completed.

Ward, who called the project the most complicated in the nation, would not estimate how long any delays could be or what they would cost, or how the authority would deal with any potential cost overruns.

The Wall Street Journal, citing unnamed sources, reported yesterday that cost overruns could push reconstruction costs $1 billion to $3 billion above and beyond earlier estimates of $15 billion.

Delays have already cost the Port Authority. Under an agreement with Silverstein Properties, the authority agreed to have the excavation at the site completed so that the developer could begin work on three towers or pay $300,000 per day to Silverstein.

The excavation work for Towers 3 and 4 was 50 days late, at a cost of $15 million, though the authority recouped $10 million from the construction contractors for the delay. Excavation work for Tower 2 was supposed to be finished in June but will now be at least a month late, again triggering payments to Silverstein.

The Port Authority also announced yesterday its first private-sector tenant at the Freedom Tower. The China Center, which will be built by Beijing Vantone Real Estate Co., will lease approximately 190,000 square feet of office space.

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