Notice Initiates Two-Week Window for Negotiated Settlement and
Starts the Clock for Potential Arbitration to Settle World Trade Center Impasse
Silverstein Would Welcome Continued and Urgent Government-Led Discussions
NEW YORK - Silverstein Properties today provided the Port Authority of New York & New Jersey with a "Notice of Dispute" letter. The notice reflects the Port Authority's inability to meet its rebuilding obligations at the World Trade Center and the major financial and logistical consequences of these failures on the Silverstein organization's ability to rebuild.
As set forth in the 2006 Master Development Agreement (MDA) signed by Silverstein and the Port Authority, the notice triggers a ten business-day period in which the parties will meet to try to resolve their differences. Failing a negotiated agreement, either party will have the right to call for an impartial panel of experts to resolve the dispute through binding arbitration.
On October 2, 2008, the Port Authority publicly acknowledged that it will not complete key elements of the World Trade Center's infrastructure, such as the underpinning of the Number 1 subway line, the PATH Hub and the Vehicle Security Center, until years after the dates required by the 2006 MDA. These delays, which Silverstein believes remain grossly understated, have adversely affected the development, schedule, cost and marketing of the three towers being built by Silverstein.
Since 2001, Silverstein has paid the Port Authority $2.75 billion in connection with the World Trade Center, and has worked for years to get the construction underway.
In the nine months since the October 2 report, Silverstein officials sought to negotiate an agreement to re-work the 2006 agreement in order to get the entire rebuilding back on track and to fairly address the impact of the Port's schedule failures. When it became apparent that those talks were going nowhere, we welcomed the personal involvement of Governors Paterson and Corzine, Mayor Bloomberg and Assembly Speaker Silver. Unfortunately and despite the best efforts of the region's top elected leaders, the Port Authority still refuses to negotiate in good faith to resolve the impasse.
"I greatly appreciate the tremendous efforts of Mayor Bloomberg and Assembly Speaker Silver, as well as the Governors of New York and New Jersey over the past two months to keep the World Trade Center redevelopment moving forward," said World Trade Center developer Larry A. Silverstein. "I welcome their continued involvement in discussions aimed at resolving the impasse through good faith negotiations. Today's action is designed to inject a renewed sense of urgency to these discussions and, should those discussions fail, to take the matter to an impartial panel of experts as early as this month. One way or another, we must take any and all steps necessary to resolve, once and for all, the disputes that have arisen as a result of the Port Authority's continued and admitted delays."
Mr. Silverstein concluded, "I remain absolutely determined to see the World Trade Center fully rebuilt as the centerpiece of the dynamic mixed-use community that has emerged downtown - the greenest and most exciting place to live, work and visit in this incredible city. For New York City, this would create 10,000 union construction jobs when people in that industry - mainstays of New York's middle class - are struggling with a dramatic drop-off of work. As I have said many times, failure is not an option."