It’s been a particularly interesting weekend for the redevelopment of the Ground Zero site, with all relevant parties cautiously approaching a deal.
The WTC site is owned by the Port Authority of New York and New Jersey, which is controlled by the governors of the two states. There’s never-ending tension within the PA over which state is getting more of its resources. Given that each state’s politics is Byzantine all by itself, it’s a miracle that the PA gets anything at all done.
I’m not certain who owned the WTC buildings themselves, but a guy named Larry Silverstein owned the lease for the towers. Silverstein has an insurance policy with Swiss Re, under which he’s to be paid $3.5 billion in the event of a terrorist attack on the towers. Silverstein says the September 11 attack was two events, so he’s owed $7 billion Swiss Re says it was one attack, and since the buildings weren’t new anyway, it was willing to pay $2.2 billion. So Silverstein is suing Swiss Re.
Silverstein is really the reason that the six rebuilding proposals look like they do. He’s got a contractual right to a 11 million square feet of office and retail space; if he doesn’t get it, someone — probably the Port Authority — owes him money. Hence the density of the site proposals.
Late last week, someone floated an interesting proposal. It turns out that the PA doesn’t own the land under LaGuardia and Kennedy airports; it only owns the facilities. The land belongs to New York City. This causes the occasional friction. How about trading Ground Zero for the land beneath the airports? That way, the Port Authority and its bureaucracy would be out of the way of an emotional rebuilding process.
The Port Authority liked the idea. It pays the city $3 million a year to rent the land, an amount that may increase to $60 million when the lease comes up in 13 years. Swiss Re, which saw some possible daylight in its suit with Silverstein (and who in their right mind would want that particular bag of cats to go to trial?) loved the idea, but pointed out that someone needed to talk to Silverstein — and that whoever it was should probably come equipped with a checkbook.
Today, Silverstein’s spokesman said he “has an open mind” about the proposal, but would like to hear something more formal and fleshed-out. Seems reasonable. It’s interesting, too, that the spokesman is Howard Rubenstein, who is the go-to guy for people who want to keep their names in — and, more important, out of — the newspapers. Check out his client list if you want to see where the power is in New York.
