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NEW YORK CITY-Mega mall developer Westfield America has started discussions and signed a non-binding letter of intent with the Port Authority of New York and New Jersey for the Port to purchase the company’s interest in the World Trade Center retail net lease for $140 million. Westfield will recover its initial investment and associated costs.

“We are selling our interests to the Port to help simplify the overall rebuilding process and expedite the rebuilding of the World Trade Center,” says Westfield chairman Frank Lowy in a statement. “While Westfield wanted to be a part of the future of the World Trade Center, we recognized the conflict between the interests of the public and the needs of our commercial/net lease rights. Selling our interest back to the Port will allow the public interest to take precedence.”

“The Port Authority is pleased to enter into discussions with Westfield America toward an agreement that would enable all remaining parties to proceed with the rebirth of the World Trade Center site as planned and on Governor Pataki’s aggressive timetable,” notes Joseph J. Seymour, the Port Authority’s executive director.

The letter of intent is the culmination of several months of discussion between the Port Authority and Westfield on how best to proceed with the redevelopment of the retail facilities at the World Trade Center and provides the basis for the resolution of these discussions.

“We hope to complete the negotiations with the Port in a timely fashion, adds Lowy.

Seymour says the agreement would give the Port Authority greater direct control over retail development, and further protect the dignity of the WTC site. “We agree with Westfield that this move also would help simplify and expedite the overall rebuilding process, and would allow the best interests of the public to take precedence in the development of appropriate retail space at the World Trade Center site,” Seymour continues. “We look forward, together with the remaining participants in the redevelopment process, to leading the rebirth of the World Trade Center site.”

The arrangement is subject to completion of negotiations, legal documentation, due diligence and required approvals. In April 2002, the 99-year lease on the World Trade Center went to a joint venture of Silverstein Properties and Westfield Properties for $3.22 billion. Included in that net lease agreement were Number One and Number Two World Trade Center (the twin towers); four and five WTC and some 400,000 sf of retail space.

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