Ultimatum in Gound Zero impasse

PUBLISHED : Wednesday, 26 April, 2006, 12:00am
UPDATED : Wednesday, 26 April, 2006, 12:00am

World Trade Centre developer Larry Silverstein has been given a final chance to end the impasse surrounding the rebuilding of Ground Zero, with New York Mayor Michael Bloomberg threatening court action if the property magnate fails to accept the city's latest offer.

New Jersey Governor Jon Corzine, Governor George Pataki and Mr Bloomberg have made their latest demand for action after protracted negotiations missed their March 14 deadline.

The proposal offers Mr Silverstein, who signed a 99-year lease on the site only weeks before the September 11, 2001 attacks, a drastically reduced role in the rebuilding programme. Either he gives up his role as primary developer, builds only one tower and receives a get-out payment of US$50million, or he rebuilds three towers as part of the complex and turns over the Freedom Tower project and a fifth office tower to the Port Authority for a share of $2.9 billion.

Mr Silverstein, who has already been awarded US$4.6 billion in insurance money after the collapse of the Twin Towers, is being held responsible for the project's lack of progress due to his infamous penchant for protracted negotiations and deal making. Local media have demanded that he be forced off the project after more than four years of relative inactivity.

Government officials involved in the dispute have also seemingly run out of patience and for the first time are showing a united front in an attempt to pressure the developer.

'We've gotten to the point where the negotiations, as far as I'm concerned, are over,' Mr Bloomberg said. 'There's no reason to talk about what else is going to happen. This is the end of the process. Silverstein Properties will pick from A or B. And if it turns out that everybody can't get together, well, then, there's always the courts - and it will take an awful long time, and it's a shame.'

Yet some real estate analysts have expressed concern over the ultimatum, claiming the plan's strict timeline, which requires that all of the World Trade Centre buildings be erected by 2012, is unrealistic.

Due to the complex nature of foundation work required, Mr Silverstein would effectively have only four years to build 4 million sq ft of office space, which could end up flooding the market, driving down local rents. Mr Silverstein indicated that he would not bow to pressure and would take his time.

'After waiting more than 35 days for the government to finally develop and submit its own proposal, we intend to take the time necessary to analyse it.'