Developer Silverstein Properties Inc. yesterday initiated arbitration proceedings with the Port Authority of New York and New Jersey to try to resolve the deadlock over the stalled redevelopment at the World Trade Center site.
The developer presented the authority with an arbitration notice that called for the dispute to be resolved by a three-member panel with hearings beginning in September. The dispute revolves around the developer's request for additional public assistance due to the Port Authority's failure to meet deadlines to ready the site for development of three towers, the credit crunch that has made financing the projects difficult, and the weak real estate market.
Port Authority executive director Chris Ward said in statement that Silverstein was asking for the public to fully subsidize two office buildings, which he called "irresponsible and unacceptable."
Under a 2006 agreement, the authority was to finish site preparation for two towers by Dec. 31, 2007, and for a third tower by June 2008. It turned over one site in March but has yet to turn over the other two.
Looming over the talks are the expiration, at the end of the year, of the authorization of $3.29 billion of Liberty bonds to finance the Silverstein towers and one to be built by the authority.
The move came a day after New York Gov. David Paterson instructed the authority to draw up plans that would allow the public portion of the site to be built without the developer's involvement.