PA Turns Over WTC Site

The Port Authority of New York and New Jersey last week turned over the last site for the World Trade Center redevelopment to Silverstein Properties, Inc.

The PA has been paying the developer $300,000 a day in damages for its failure to meet deadlines for three sites on which it plans to build office towers. It was obligated to turn over two sites by Dec. 31, 2007, and the final site by Dec. 31, 2008, and will have paid Silverstein more than $130 million in penalties.

Under a 2006 agreement, the agency was to finish site preparation for two towers by Dec. 31, 2007, and for the third by June 2008. Silverstein now has until 2014 to complete the towers.

Janno Lieber, president of World Trade Center Properties, a Silverstein subsidiary, said that the cumulative delays totaled 999 days.

“Our attention now must turn to the Port Authority’s other major WTC infrastructure obligations, which must be completed as a precondition for construction, opening and operation of the memorial, the office towers, the retail and the performing arts center,” Lieber said in a press release. “New York must not accept business as usual at the World Trade Center. The same Port Authority bureaucracy that turned this straightforward, one- to two-year effort to dig a hole into a three-and-a-half year ordeal must do better.”

Earlier this month Silverstein initiated arbitration proceedings with the Port Authority. The developer has been seeking financial assistance from the agency to build its towers, citing the difficulty of getting financing in the current economic climate. The Port Authority has said it would act as a guarantor on one of the towers but would do no more.

Looming over the talks is the impending expiration at year-end of the authorization for selling $3.29 billion of Liberty bonds to partially finance the Silverstein towers and one to be built by the PA.

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