GroupM to Move to 3 World Trade Center
December 23, 2013
Silverstein Properties announced today that GroupM, the world’s leading media investment management group, has signed a 20-year lease at 3 World Trade Center. The firm will occupy approximately Read more...

Port Authority wants to dump three of five proposed skyscrapers for WTC site

The incredible shrinking World Trade Center will be cut back from five iconic skyscrapers to just two signature towers under a new Port Authority plan, the Daily News has learned.

Bludgeoned by recession and a war with developer Larry Silverstein, the Port Authority is proposing halving the office space it will build at Ground Zero - from 10 million square feet to 5 million, sources familiar with the plan say.

The sources say the agency's new vision for the site calls for scrapping one tower that would have been taller than the Empire State Building and nixing two others that would have dwarfed the nearby Woolworth Building.

In place of two Silverstein behemoths, each designed by a British lord and soaring 79 stories, the PA would erect a pair of short, squat buildings no taller than four or five floors - coined "stumps" - that could be used for retail shops, according to the proposal.

The vastly scaled-back site plan was disclosed to The News hours before Assembly Speaker Sheldon Silver on Friday branded budget-busting delays and cost overruns at the 16-acre site an "embarrassment to our city, our state and our nation."

Mayor Bloomberg promptly followed up by inviting all warring parties to a summit meeting this week.

End of master plan

Revamping the sacred spaces where nearly 3,000 people were killed on 9/11 marks a dramatic break from the original 2003 Daniel Libeskind master plan, which called for a row of cascading office towers to replace the 10.4 million square feet of office space destroyed by terrorists.

Although the Freedom Tower will still climb to its symbolic 1,776 feet, and the Memorial will occupy the heart and soul of the site, the showcase buildings designed by world-class architects - on which Silverstein has already spent hundreds of millions of dollars - will be absent.

"It's getting smaller and smaller and smaller," said Enrique Saurez, a dishwasher from Venezuela who worked at Windows on the World, where 73 employees died. "What happened to their so-called master plan?"

What happened was a calamitous credit crisis that dried up bank financing for Silverstein and a fiscal crunch that has led to falling revenues at PA bridges, tunnels and airports - all amid an increase in borrowing costs.

With a squeeze on cash, lenders, Wall Street tenants, the agency and the builder launched a new round of heated talks to determine exactly who will build what - and on what terms it will be financed.

The result is a PA proposal that would:

- Reduce Tower 2, a planned 79-story, 1,270-foot Silverstein building designed by Lord Norman Foster, to a glorified, prettied-up stump.

- Effectively strip control of 71-story, 1,137-foot Tower 3, designed by Lord Richard Rogers, from Silverstein and reduce it to another stumpy building.

- Abandon all plans for Tower 5, slated to go on the toxic Deutsche Bank building site, for the foreseeable future.

- Underwrite about $1 billion in financing costs and rent abatements for Silverstein on 64-story, 975-foot Tower 4, which is the only building he'd get to construct.

- Go full steam ahead on Tower 4 - but force Silverstein to surrender most of his development fees, insurance proceeds and fine revenues in return.

The PA wouldn't comment on its specific proposals.

"We're committed to rebuilding downtown," said Stephen Sigmund, the authority's chief spokesman.

He said limited public resources were being directed toward "keeping the memorial and other public projects moving forward" - and that office and retail space would be built "to meet the market."

Screws put to Silverstein

Silverstein was initially entitled to build five buildings and 10 million square feet on the site, but agreed in 2006, under enormous political pressure, to surrender the Freedom Tower and one other building. He was also ready to give up one more tower - but not two.

"Our compromise proposal - under which we would own two buildings with [up to] 4 million square feet - is fair, especially since the Port Authority has collected more than $2 billion from Silverstein since 9/11," said Janno Lieber, president of Silverstein's World Trade Center Properties.

"Completing two buildings will assure that the WTC site is a finished, attractive and exciting place that helps - rather than hinders - downtown's revival," he added.

Sources familiar with Silverstein's position complained that the PA is acting unfairly both in setting the financial terms and in mothballing two Silverstein buildings.

A hefty chunk of Tower 4, the lone remaining building built solely by Silverstein, would be occupied by the PA, which would pay below-market rent, they point out. The agency is offering to hike its payments as part of the deal.

New delays to the long-stalled project loom, these sources warn: The PA's plan for stumps - to support retail and serve as stand-ins for towers that could one day be built on top of them - could take some two years to redesign and reengineer.

Since stump construction would take place in the same area as below-grade work on the $3.2 billion Transportation Hub, it could push back that project, now slated for completion in mid-2014, even further, these executives predict.