City and State: Market Will Determine Silverstein Schedule at WTC

October 2, 2008 | 5:09 p.m

Larry Silverstein at a press conference earlier this year.

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Joe Fornabiao.

Missing from today's new World Trade Center timetable was any mention of the schedules for the planned 6.2 million square feet of office space in developer Larry Silverstein's planned three towers at the site.

The response of the mayor and the Port Authority's executive director, Chris Ward: The market will decide that, but the infrastructure will be in place.

"The market will respond as it needs to respond," Mr. Ward said at a press conference with Mayor Bloomberg and Governor Paterson. "We will have available those sites and those foundations to Larry's team to meet the market."

In his long-term lease with the Port Authority, Mr. Silverstein is required to complete his buildings by 2013. Should he not finish any individual building by its required completion date, he would be in default of his lease, and the Port Authority could claim all three buildings.

Mr. Silverstein and the Port Authority have been in preliminary conversations about a renegotiation of that lease, but the terms of the negotiations are far from clear. As was hinted today, the Port Authority will likely claim that the towers cannot be built due to the extraordinarily inclement lending market, and any infrastructure delays are irrelevant. Mr. Silverstein is likely to point to the delays as a major impediment to financing, according to people familiar with the situation.

The dates released today, while later than originally scheduled, pledge delivery of numerous components earlier than had been estimated just a few months ago. The Port Authority said in its report today that it was able to solve numerous problems and add efficiencies, speeding up the process. The vehicle security center and Greenwich Street—both required for the Silverstein towers—are each targeted for completion in 2012, a critical completion date given that they would theoretically be open by the completion of Mr. Silverstein's towers. For those components, the Port Authority had a strong disincentive to set dates that would have been later than 2012, as Mr. Silverstein could better use the expected delays to his advantage in lease negotiations.

Neither Mr. Silverstein nor his deputy for the World Trade Center redevelopment, Janno Lieber, were at this afternoon's press conference with the mayor and the governor. (The mayor spoke alongside the governor, though did not issue a statement or a quote in the press release. Also without a statement: the National September 11 Memorial & Museum at the World Trade Center, though Mr. Bloomberg is the organization's chairman).

Mr. Silverstein's statement:

“We thank Governor Paterson and Mayor Bloomberg for their leadership, and we appreciate the Port Authority’s work over the past several months in trying to develop greater certainty about the schedule and cost of its projects at the World Trade Center site. We are now going to study the Port Authority’s report and back-up materials so that our construction professionals can evaluate the new dates they have identified. This will allow us to gauge the impact on our part of the World Trade Center rebuilding effort.”