Once at Odds, Bloomberg and Silver Pressure Port Authority on the Trade Center
Although the negotiations over the World Trade Center site have gone nowhere, the deadlock has produced something of note: a startling alliance between Mayor Michael R. Bloomberg and Assembly Speaker Sheldon Silver.
The former adversaries came together last week to rebuke the Port Authority of New York and New Jersey for its refusal to guarantee billions of dollars in financing for two office towers that the developer Larry A. Silverstein is to build at the trade center site.
A joint statement united the developer's most persistent critic, Mayor Bloomberg, and Mr. Silverstein's most consistent champion, Mr. Silver. Until recently, any significant cooperation between the two would have seemed unlikely; Mr. Silver, after all, handed Mr. Bloomberg the biggest political defeats of his mayoralty: scuttling a proposed football stadium on the West Side of Manhattan in 2005 and blocking the mayor's congestion pricing plan in 2008.
But Mr. Bloomberg has found ways to work with the speaker, now the most powerful politician in Albany. At the city's request, Mr. Silver got state money budgeted for Governors Island this spring; more recently, the Assembly approved the mayor's plan to raise the city's sales tax.
And the mayor publicly thanked Mr. Silver for his central role in the Assembly's passage of a bill on Wednesday concerning what is perhaps the mayor's most cherished issue: retaining mayoral control of city schools.
The recent cooperation has some analysts questioning whether the mayor's change of heart had more to do with political prudence than real estate.
"This may well be a payback for Silver's support in Albany for continuing mayoral control of the schools," said Bruce F. Berg, a political science professor at Fordham University. "I think he's also eager, given the upcoming election, to get something going in Lower Manhattan."
But Mr. Silver, whose district includes Lower Manhattan, said that although he and the mayor were now "on the same page" regarding the trade center, the notion of a quid pro quo was "absurd."
Stu Loeser, the mayor's chief spokesman, said that Mr. Bloomberg's turnabout was based on a thorough analysis of the financial numbers and a "deep concern about delays."
"The mayor and the speaker share the view that it's in nobody's interest — not the country's, not the city's, not the port's and not Mr. Silverstein's — to have progress grind to a halt at the World Trade Center site," Mr. Loeser said.
No matter the motivation, the mayor's position has certainly evolved rapidly. In 2006, Mr. Bloomberg called for Mr. Silverstein's ouster, saying, "We need to push aside individual financial interests and focus on what's best for our city."
As recently as March, the mayor framed the reasons for the impasse and seemed to sympathize with the Port Authority, saying: "What Larry did is take out all his equity at the beginning, so he really doesn't have a lot of skin in the game. He had an enormous amount of upside potential, which doesn't leave the Port Authority with a lot of negotiating ability, because they're the ones who have to put up the money."
But now, Mr. Bloomberg wants the authority to guarantee most of the financing for Mr. Silverstein's two towers, which are expected to cost $4.2 billion.
"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," the mayor told reporters last week.
Certainly, many of the city's civic groups, some developers, Port Authority officials and, to an extent, the governors of New York and New Jersey disagree with the mayor's new approach. Until now, no one ever conceived of the authority financing the office buildings at ground zero.
Under a 2006 development deal, Mr. Silverstein had agreed to build three towers at an estimated cost of $7 billion with insurance money, tax-exempt bonds and private financing. Unable to secure anchor tenants or financing, Mr. Silverstein in recent months asked the Port Authority to guarantee what the authority said was $3.2 billion in financing for the first two buildings, leaving the third tower to be built further in the future.
The authority reluctantly agreed to provide up to $1.2 billion for the first tower, which Mr. Silverstein is now building. But it balked at doing more, saying it would jeopardize the authority's capital projects at a time when revenue from tolls and airports is plunging.
"We will continue to do all that we can at the trade center," said Christopher O. Ward, the authority's executive director, "but you must recognize that this project could come at the expense of critical public projects such as La Guardia, expanding Stewart Airport, the Bayonne Bridge or a bus garage for the midtown bus terminal."
Instead of building two of the towers now, Mr. Ward suggested completing the foundations and low-scale structures for retailers, which at some point in the future could serve as structural podiums for high-rise towers above, much like those at the Hearst Magazine Building on Eighth Avenue.
Two weeks ago, the Westfield Group, the Australian shopping mall operator, offered to invest as much as $1.3 billion to build a retail complex similar to Mr. Ward's proposal.
But even before Westfield's offer, Mr. Silverstein and city officials had rejected the concept as impractical, although they had endorsed the very same notion in 2004.
There is progress on the 16-acre site. The Port Authority, which owns the land, is building a $3.2 billion transit center, underground portions of the Sept. 11 memorial and its own $3 billion skyscraper. Mr. Silverstein, who has collected more than $150 million in development fees, is rapidly erecting the first of his three office towers.
Mayor Bloomberg, Mr. Silver and Mr. Silverstein contend that it is critically important to build the towers at ground zero as quickly as possible. By the time the towers are completed, they say, the economy will have rebounded. They argue that the Port Authority has exaggerated the value of its $1.2 billion offer to Mr. Silverstein and overestimated the risks to its capital budget. They concede, however, that some authority projects would have to be delayed to finance the towers.
But some developers question the push to build that much office space so quickly when vacancy rates are climbing and tenants are scarce. At what may be better sites on Eighth Avenue in Midtown, the developers Mortimer B. Zuckerman and Stephen M. Ross recently canceled their plans to build two new office towers.
"The port's money is supposed to be used for transportation, not speculative office buildings," said the developer Douglas Durst. "It doesn't make any sense to me to force the authority to do what the private developers won't do."
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