World Trade Center developer Silverstein Properties Inc. lost its main argument in an arbitration proceeding against the Port Authority of New York and New Jersey, the two parties announced yesterday.
The arbitration panel ruled that Silverstein was not entitled to rent relief on three sites in lower Manhattan on which the developer plans to build three towers. It also ruled the Port Authority was not in material breach of the master development agreement for the site. However, the panel did cancel dates by which the company would have to complete the towers or return control of the sites back to the authority. The panel gave the parties 45 days to come up with a new plan and schedule to develop the site.
Silverstein leases the sites from the Port Authority which owns them. Citing delays at the sites that the authority failed to deliver to the developer on schedule, the downturn in the office market, and the credit crunch, Silverstein had sought additional public assistance for the towers. When the authority balked at the request, company began arbitration proceedings in August.
The Port Authority disclosed in a recent official statement that Silverstein said it could seek at least $2.75 billion of damages if a settlement wasn’t reached. A statement from the company indicated that it might still seek damages from the authority, though it did not state a dollar amount.