The rumor grew out of Silverstein's past with the PA. Silverstein and the PA were involved once before in the development of 7 World Trade Center. When Drexel backed out of the space they had contracted to take in the development, Silverstein took longer than the allotted time to find another anchor tenant and had to refinance with a construction loan. The rumor alleged this was a sign of some favoritism afforded the company even back then when the PA afforded what apparently is seen by the rumor's originator(s) as a window that would not have been afforded just anyone.

Steve Solomon with the Rubenstein Public Relations firm that represents both Vornado, the top bidder that lost in the negotiations with the PA for the WTC for irreconcilable differences, and Silverstein, the second bidder now in negotiations for the property says alls such suggestions are "absolutely ridiculous. There's not even an inkling of truth to it. Larry Silverstein is a tremendously respected member of the real estate community, and anyone who would suggest this is just clueless."

A source with the PA tells GlobeSt.com that the rumors are unfounded and ridiculous. The source notes that the negotiating staff at the PA is "very relieved" that the deal with Vornado fell through. It is no secret that the word commonly mentioned with Vornado is "difficult." This, however, the source emphasizes does not indicate that the PA in any way favored Silverstein.

A question raised by almost all of those insiders and industry observers with whom GlobeSt.com spoke for this story was if the PA was soft on Silverstein, why choose Vornado at all? Vornado was the top bidder and thus was chosen to open negotiations. Silverstein was the second bidder, so it was second in line for negotiations when the process fell through with Vornado. The sources say the case is cut and dry and there is no evidence to suggest manipulation of the process.

Peter Sabesan, principal at Hunter Realty Corp., an outside observer of the negotiations with knowledge of Silverstein and the PA, says that such rumors are hard to swallow. "The Port Authority is so straight and honorable. They're always checking their leasing contracts, and because they're a government agency, there's no one person who's going to benefit from crooked dealings."

Sabesan says that those who work Downtown are happy with the PA's decision to go with Silverstein. "He's just more broker-friendly," says Sabesan. Although Vornado did come through with the higher bid, Silverstein's initial down payment was $100 million more--an offering that may have proved instrumental in the PA's reversal. This time around, the PA is not making the "waiting period" official public knowledge in an effort to avoid a "media circus," but a source with the PA tells GlobeSt.com Silverstein will be afforded the same 20 days Vornado had for negotiations and that the parties involved are working around the clock to hammer out a deal.

The topic of the World Trade Center's sale has been a contentious one from the beginning. For approximately one year the two states were in a deadlock--among other reasons, New York State wanted the rights to sell the World Trade Center. New Jersey wanted key renovations to secure Maersk-Sealand's headquarters in Port Elizabeth. Last May, the parties reached an accord. It does not seem, however, that the drama surrounding the World Trade Center is going to continue for much longer.

Instant Insights /

Sources Refute Rumors Silverstein Gained from Past

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