All insurance proceeds and Liberty Bonds will be committed to Towers' 2 & 3
Today World Trade Center (WTC) rebuilding officials authorized the development plan that will build the east side of the site up to at least street level. The series of agreements that form the development plan follow the framework outlined on March 25, 2010, by the Port Authority and Silverstein Properties.
Under the plan, Tower 4 -- now up to the 7th floor, at the southeastern corner of the site -- will be built in full by 2013. The Port will provide credit support for the $1.81 billion tower and its lower-level retail, including approximately $1.36 billion of Liberty Bonds and $450 million of insurance proceeds.
Just north of “T4,” Tower 3 construction will continue initially to podium level, funded entirely by insurance proceeds. Full T3 completion would be financed with another $600 million in Port Authority, City of New York, and the State of New York subsidies -- but only if Silverstein is able to raise at least $300 million, secures additional Liberty Bonds, and sign leases with tenants. This strategy lets the private market drive the need for more commercial space at the WTC.
The plan was ratified by the Port Authority Board of Commissioners following months of negotiations between Silverstein Properties -- leaseholder of WTC Towers 2, 3 and 4 -- and the Port Authority, the site’s owner, over how to phase and finance the three planned office towers on the eastern half of the site.
“Today’s agreement is a major milestone in the redevelopment of the World Trade Center site,” said Port Authority Chairman Anthony Coscia. “It will allow us to continue the effort we began four years ago to rebuild the World Trade Center, and it protects the public resources this agency needs to build and modernize the transportation facilities critical for the region’s growth and prosperity.”
Meanwhile, Tower 2 construction will continue to street level, with Silverstein allowed to start construction of the office tower based solely on market demand and its own capital investment. The development plan also implements a “cash trap” to ensure that the public stakeholders get paid back before Silverstein collects profits from the net cash flows of Towers 3 and 4.
All insurance proceeds and Liberty Bonds previously allocated to Towers 2, 3 and 4 will be committed to only Towers 3 and 4 under the new plan.
Currently at the site, the National 9/11 Memorial, 1 WTC, and the public infrastructure projects continue to progress on their current schedules. At 1 WTC, steel is now up to the 36th floor, on target for 2013 completion. Recently the Port agreed to a new joint venture with the Durst Organization to serve as the agency’s private-sector partner, investing $100 million of equity in the tower.
At the WTC Transportation Hub site, between Fulton and Dey Streets (and between T2 and T3), installation of all of the 54 signature Santiago Calatrava–designed arches for the “east-west connector.” More Calatrava arches, steel, and giant plate girders are also being installed on the Hub’s mezzanine level to support the PATH hall roof and the Memorial Pavilion above it.
“Today’s vote ensures progress on the World Trade Center site will continue,” said Mayor Michael Bloomberg. “The progress on the site is clear: two of the towers are rising, the Memorial is on track to open next year on the 10th anniversary, the transit hub is underway, and every day thousands of construction workers descend on the site to continue rebuilding it. We remain as committed as ever to working with all of the parties to make sure the momentum we’ve achieved is sustained.”