X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-Nearly four weeks after the May 21 Gracie Mansion summit between key stakeholders in the World Trade Center redevelopment, Silverstein Properties Inc. and the Port Authority of New York and New Jersey have apparently failed to come to a compromise agreement on the project’s scale and financing. The Gracie Mansion summit had set June 11 as a deadline to reach an agreement, but extended that date through this past weekend.

In a joint statement, Assembly Speaker Sheldon Silver and Mayor Michael Bloomberg say “while we have not yet been able to reach consensus with the Port, the cause is too important to give up–and we will continue to work with all the parties to fulfill our collective obligation to rebuild the site.” Sources tell GlobeSt.com that the mayor has requested that all parties refrain from negotiating through the press.

So far, the Port Authority has agreed to back-stop financing for only one of SPI’s planned three towers. On Wednesday, while taking questions from reporters, Bloomberg said Deputy Mayor Robert Lieber, moderator at last month’s summit, was still working to reach a solution between the developer and the bi-state agency.

Charging that “what’s good for America and New York City might be slightly at odds with what’s good for the Port Authority,” the mayor argued at Wednesday news conference that “we cannot leave a hole in the ground” and the the Port Authority “just has to come to the party.” While sympathetic to PANYNJ balance sheets, Bloomberg expressed frustration with a revolving door of governors in New York and New Jersey, a total of six since 9/11.

Implying that leadership at the bi-state agency is a reflection of state leadership, the mayor said that upon assuming the governorship, they each “want to stop everything, put their own guy in there, do the research before they sign on or change it.”

Of the talks, Bloomberg said “we’ve come tantalizingly close, but it’s like jumping 95% of the way across the Grand Canyon,” adding, “we’ve got to have something that we think will work and we’re dealing in a world where there aren’t tenants and there isn’t financing today, even though we believe there will be tenants down the road.”

A spokesman at the Port Authority tells GlobeSt.com he “thinks” the two parties are still talking.

In an earlier statement, the authority says it continues to negotiate in good faith. “We are working with all parties to advance the private development in a way that protects public resources for the people of this region,” according to the statement.

As GlobeSt.com reported this past April, the economic downturn contributed to decisions by Port Authority to seek delays in the construction of SPI’s Towers 2 and 3 for as long as 20 years. At a PA board meeting that month, citing a new Cushman & Wakefield forecast that said the towers wouldn’t realize full capacity for as long as 30 years, PA execuive director Chris Ward said “this is the market Port Authority must function in as we look to how the towers get built out over time.”

Later, when asked by GlobeSt.com about comparisons to building the Twin Towers in the lethargic office market of the 1960s and early 1970s to the market of today, PA chair Anthony Coscia said that for many years, the Twin Towers were a drain on the Downtown office market, and that all the new WTC buildings coming on line at the same time could destabilize the market. “The real estate industry might say the amount of space provided in that transaction ended up putting a major drag on the real estate market for decades,” Coscia said in April.

But on May 21, as if providing its own pro-build volley of evidence, SPI provided GlobeSt.com a new CB Richard Ellis study that said Towers 2 and 4 at the WTC will command high rents when completed over the next four to six years.

The CBRE study found that “buildings of high quality in optimal locations benefit more from booms, and suffer less from declines.” The report adds “the 25 buildings that commanded the highest rents in 1998 out-performed the rest of Midtown in both up and down markets. The premium is currently 85%. The buildings boast either iconic architecture, new construction or highly efficient space, all of which will be available at WTC.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS SPRING 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.