The World Trade Center site will cost about $1.5 billion more and take longer to complete than originally estimated, the Port Authority of New York and New Jersey said yesterday.
The Port Authority, following a 90-day review, estimated that the parts of the projects it is financing will cost $6.93 billion and will be finished by 2014. The agency has said that funding for the projects would be a combination of tax-exempt Liberty bonds, federal funding, and possibly private equity or special project bonds. Those costs don't include a memorial which is funded by a foundation and towers built or to be built by developer Silverstein Properties, Inc.
"We will work with our partners to address that funding gap but both governors [of New York and New Jersey] have asked the Port Authority to evaluate its capital plan, to ensure that this project can go forward," said executive director Chris Ward. "We will manage our capital plan accordingly and make the kind of decisions we've made before to accommodate whatever additional costs the Port Authority has to face."
Ward said that fare and toll increases on the authority's transit system, bridges, and tunnels, were not on the table as sources for additional funds. The Port Authority owns the 16-acre trade center site.
The agency's report cited increasing construction costs, including rising commodity prices for steel and concrete, as well as rising costs of fuel and the weakening dollar among the reasons for the increased project cost. It also identified solutions to 15 issues that the authority said in July needed to be resolved to get the project moving.
A transportation hub, which would include a station designed by Santiago Calatrava to connect the PATH commuter train line and the subway system, is being built with $2.2 billion of Federal Transportation Administration funding. The cost of that project has risen from its last estimate of $2.5 billion to $3.2 billion and a new target completion date was set at the end of 2013, with a contingency date in mid-2014, indicating it could be further delayed.
Under a plan released in 2003 by then-Gov. George Pataki, both a permanent PATH station and the 1,776-foot Freedom Tower were to be completed by 2006. The Freedom Tower is now slated to be finished in 2012 and the estimated cost has risen from $2.9 billion to $3.1 billion.
The Freedom Tower and four towers being built by Silverstein were slated to use the proceeds of $3.77 billion of Liberty bonds, but so far only $475 million were sold to finance the construction of the 7 World Trade Center building. The federal authorization for the bonds, created by Congress as part of the recovery plan after the 2001 terrorist attacks, expires at the end of 2009, raising the question whether they will be sold within the next 15 months or if the authorization might be extended.
Port Authority spokesman Steve Coleman said in an e-mail that the Port Authority was aware of the expiration date. "We are still putting together our financing plan," he said. "We traditionally don't talk about the timing of when we plan to issue new bonds."
Silverstein Properties spokesman Bud Perrone declined to comment on when it could go to market with the $2.59 billion of Liberty bonds it was allocated for the three office towers slated to build on the site.
"We are now going to study the Port Authority's report and back-up materials so that our construction professionals can evaluate the new dates they have identified," developer Larry Silverstein said in a statement. "This will allow us to gauge the impact on our part of the World Trade Center rebuilding effort."