According to a joint statement from the Port, SPI, the Bloomberg administration and the states of New York and New Jersey, the plan entails restoring the east side of the WTC site to at least street level, completing SPI's Tower 4 by 2013 and phasing in the developer's Towers 2 and 3 over time. All other projects, including One World Trade Center, the 9/11 Memorial, the WTC Transportation Hub and other public infrastructure, will continue moving forward. The statement says the accord between the developer and the Port strikes "an important balance between the redevelopment goals, financial risks and rewards between the public and private sector."

About 60% of Tower 4, also known as 150 Greenwich St. and already under construction, is being pre-leased to the Port and city agencies. Under the proposed development plan, the Port would provide a master lease for Tower 4, thus supporting the issuance of SPI's Liberty Bonds to partly finance the 64-story property's construction costs. SPI would reimburse any payments made by the Port under the master lease.

The plan calls for the immediate construction of Tower 3's five-story transit and retail podium. Building the office tower would follow, provided SPI raises $300 million of private unsupported equity, pre-leases 400,000 of the tower's planned 2.1 million square feet and secures private financing for the remaining cost of the project.

In return, SPI would receive a capped public backstop of $390 million from the Port Authority and New York City and State, along with $210 million of equity from the city and state. The developer would not be allowed to take profits from the 71-story Tower 3 until the public backstop is removed.

Additionally, SPI would use its remaining insurance money from the 9/11 attacks to finance construction on Towers 3 and 4 and pay ground rent to the Port, and all of its Liberty Bonds proceeds would go toward building the two towers.

Largest of SPI's planned three towers, Tower 2, has at least a chance of being built, although SPI had proposed scrapping it to save costs. Under the tentative agreement, the planned 2.3-million-square foot property would be built to at least street level under a scenario to be jointly developed by the Port and SPI. "This plan would preserve flexibility for the future development of the office tower driven by market demand," according to the joint statement.

Furthermore, the agreement would entail the developer and the authority jointly coming up with a plan to better integrate their construction teams in view of the interrelated components on the east side of Ground Zero. According to the joint statement, this would include "a more formal process of information-sharing, decision-making and schedule development and implementation," along with "reciprocal mechanisms relating to delay to provide investors, lenders and tenants with reasonable certainty of timely project delivery."

Over the next 120 days, both sides will negotiate agreements "consistent with the development plan and framework," according to the joint statement. The Port's board will have final approval on the agreements.

In a statement of his own, SPI president and CEO Larry Silverstein says the agreement "will accelerate the rebuilding of the World Trade Center. This is great news for New York." Scott Stringer, the Manhattan borough president, says the agreement "paves the way for a project that will transform the scar of Ground Zero into a badge of honor. This new financing plan should end the most recent stalemate and set us up to refocus our attention on the common goal: ensuring that we build a future for Lower Manhattan that pays justice to the memory of those we lost, and invests in the communities that remained in this neighborhood throughout nearly a decade of uncertainty."

Delivering prepared remarks Thursday evening, Mayor Michael Bloomberg expressed confidence that "this agreement is going to turn out to benefit everyone in the end. Reaching it meant getting everyone to the negotiating table in the first place, and it was not quite a year ago that we brought all parties together at Gracie Mansion and they agreed to make it work. And they did it."

Gov. David Paterson says in a statement that the agreement strikes "the critical balance between the public and private sectors that I have called for throughout these negotiations…The way forward is not through legal means, but cooperation, commitment and dedication to continuing progress on the World Trade Center site."

His New Jersey counterpart, Gov. Chris Christie, strikes a sterner tone, saying, "We have a moral duty to the memories of those we lost in the World Trade Center attacks to rebuild this site, and we also have a fiduciary duty to New Jerseyans and New Yorkers to make sure that our final agreement is financially sensible and fair."

Instant Insights /

Silverstein, Port Reach Ground Zero Accord

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