Monday August 5, 12:33 pm Eastern Time Reuters Business Report WTC Leaseholder Would Conduct Land Swap By Joan Gralla
NEW YORK (Reuters) - Real estate developer Larry Silverstein, who leased the World Trade Center last year for $3.2 billion, likely would cooperate if New York City swapped ownership of its two airports for ownership of the World Trade Center land, Silverstein's spokesman said on Monday. ADVERTISEMENT
The Bloomberg administration's proposal for a land swap, which was reported by local newspapers, would get the Port Authority of New York and New Jersey out of the middle of a bruising wrangle over how the 16-acre World Trade Center site should be rebuilt. The Port Authority currently owns the downtown Manhattan site.
Silverstein's spokesman Howard Rubenstein, told Reuters: "He (Bloomberg) floated the idea but none of the details have been presented to Larry Silverstein. He (Silverstein) has a cooperative frame of mind."
Silverstein leased the World Trade Center in July 2001.
The Port Authority has said Bloomberg's proposal for a land swap merits what it called serious examination and consideration.
Spokesmen for New York governor George Pataki and New Jersey governor James McGreavy, who share control of the Port Authority, and New York City Mayor Michael Bloomberg, were not immediately available to comment.
Whether Pataki would agree to let the city swap the airports --LaGuardia and John F. Kennedy-- for the World Trade Center site is not clear. The Republican governor now exerts great influence over the redevelopment process through the Port Authority. But he shares control of the Lower Manhattan Development Corp., the city-state agency charged with rebuilding the 16-acre site, with Bloomberg.
Another big player in the future of the World Trade Center site is insurance company Swiss Re (RUKZn.VX), which is fighting Silverstein in court, claiming it only owes him $3.5 billion. The real estate developer wants twice that amount from the insurer, and another 20 or so other insurers who covered the complex, because he claims the two plane strikes were two separate insured events, not one.
Swiss Re's U.S. chief said on Sunday the company would like to see Silverstein dropped from any role in plans for rebuilding the World Trade Center site.
"They (the city) need to buy Silverstein out, and then we would be happy to deal directly with the city," Jacques Dubois said.
The Port Authority has insisted on replacing the 11 million of square feet of office space that were lost on Sept. 11 when two jets were flown into the World Trade Center's twin towers, toppling them and killing nearly 3,000 people.
The bi-state agency does not want to accept any lower rent. It now gets $124 million a year in rent from Silverstein for the World Trade Center. Business interruption insurance has allowed the developer to continue making these payments.
The Lower Manhattan Development Corp. has tried to accommodate the Port Authority by including 11 million square feet of office space in all six plans for rebuilding the site.
These plans, however, have been criticized as being too crowded, and the Lower Manhattan Development Corp. now plans to open the design competition to more architects.
For years, New York City has been trying to get the Port Authority to pay more than $3 million a year for leasing the La Guardia and John F. Kennedy International airports.
New York City now needs the money more than ever before because it is facing a $5 billion budget hole. The city's budget assumes it will get the Port Authority to increase its rental payments to $175 million though the state comptroller has warned that money might never materialize.