Port Authority on hot seat at ground zero

Editorial Comment: Here you have Mayor Bloomberg servicing a developer who should be a suspect in the deliberate demolition of Building 7 on 9/11/2001. Larry Silverstein slipped in an interview and made a defacto confession in a 2006 PBS production, "America Rebuilds". Unbelievably, Silverstein was never questioned by law enforcement about his comment or the identity of the alleged "fire chief" to which he spoke. America is in a state of lawlessness that too many people refuse to confront. Port Authority on hot seat at ground zero By Theresa Agovino

Published: June 17, 2009 - 3:09 pm

It’s getting ugly.

Mayor Michael Bloomberg blamed The Port Authority of New York and New Jersey again on Wednesday for the logjam between the agency and developer Larry Silverstein over financing construction of two office towers at ground zero.

“We cannot leave a hole in the ground and the Port Authority just has to come to the party,” Mr. Bloomberg said during a press conference.

The mayor added that the city itself may find a way to help end the impasse with some funds of its own. He wasn’t specific, but sources say that during negotiations the city had offered to cover $100 million in Mr. Silverstein’s financing shortfalls so that he could construct two towers. Mr. Silverstein wants the Port to back two of his towers but the agency has only offered support for one, saying it would be irresponsible to use public money to finance a risky, private real estate deal. The city’s offer still doesn’t take enough financial risk off the Port’s back, according to some sources close to the negotiations.

Frustrations are running high, sources say, because the two sides aren’t close to reaching a deal after nearly three weeks of negotiations brokered by the mayor and Assembly Speaker Sheldon Silver.

The mayor and Mr. Silver have been turning the screws on the Port to break the deadlock but it’s still unclear how effective their campaign will be. The agency is controlled by the governors of New York and New Jersey, who sources say agree that the Port should only back one tower.

The mayor acknowledged Wednesday that the Port does have its balance sheet to worry about, and said multiple changes in governors in both states since the attacks have contributed to the problems at ground zero.

On Tuesday, Messrs. Bloomberg and Silver fired the first salvo at the Port. In a statement they announced: “We fundamentally believe that there are opportunities to find mutually agreeable and responsible terms that align the Port Authority’s interests with the city’s and the nation’s and that allow continued progress at ground zero.” Mr. Silverstein’s name wasn’t even mentioned in the release.

Today, the mayor turned up the heat even more by praising Mr. Silverstein at a press conference, while reiterating that what’s good for The Port “may be slightly at odds: with what is good for America and the city.

“I will say Larry Silverstein, while not turning over the keys to his family’s net worth, has come up and has made a lot of progress, (and is) willing to step in,” said the mayor at the press conference.

The developer has a lease which allows it to build three towers at the World Trade Center site, which is owned by the Port Authority.

Mr. Silverstein had been criticized for not having any of his own money in the project. Sources said that during the negotiations he had offered to put up $75 million and said he would assume responsibility for the work at the site, which would save $400 million. However, others point out that he offered no guarantee for the $400 million and that the $75 million represented less than 2% of the buildings’ costs.

In another swipe at the Port, on Tuesday, the New York Post reported that Christopher Ward, the head of the Port Authority, was out of town over the weekend while negotiations continued. It quoted a source saying that it was impossible to strike a deal when the Port’s lead negotiator was absent.

A Port spokesman called the story “silly” and told the Post that “low blows won’t get a deal done.”

In a statement, the Port said, “We agree that the progress at the World Trade Center must continue. We are working with all parties to advance the private development in a realistic way that protects public resources for the people of this region.

Spokespeople for Mr. Silver, New York Gov. David Paterson and New Jersey Gov. Jon Corzine didn’t immediately return calls. A spokesman for Mr. Silverstein declined comment.

Article can be found at http://www.crainsnewyork.com/article/20090617/FREE/906179974