Freedom Tower start delayed

Freedom Tower start delayed pending revised financial deal with developer.

Construction of New York City's Freedom Tower on the World Trade Center memorial site had been due to start this month but has been delayed pending further negotiations between the site's leaseholder, Larry Silverstein, and the owner, the Port Authority of New York and New Jersey.

Currently the landowner and the developer are attempting to find a compromise which will enable this major development to proceed.

If this cannot be achieved, it is likely that Mr.Silverstein and his company will be required to surrender control of the 16 acre site, which provides space for construction of the Freedom Tower and three of the four office towers which complete the development, together said to cost more than $7 billion.

The hold-up is undoubtedly due to difficulties over financing a project on this scale.

Mr.Silverstein is understood to have built up a $2.9 billion fund from the proceeds of insurance payouts on the World Trade Center towers but this well short of what is needed to finance the entire development.

He had been hoping to get nearer $7 billion from the insurance companies but the litigation failed to produce this sum when the jury accepted the insurance companies' contention that the attack on the towers should be treated as one event and not two as Mr.Silverstein had pleaded.

Everyone involved is reported to be desperately anxious to see a start on the development which is a symbol of the resilience of the United States in the face of misfortune as well as a demonstration of the innovative powers of its architects, engineers and builders.

Significant indicators of its importance as a symbol of American nationhood are the 1776 feet height of the Freedom Tower and the fact that the foundation stone was laid on Independence Day, 2004-07-04.

The Governor of New York State, George Pataki, is reported to have proposed a deal to Mr.Silverstein which would have him surrender his rights to build and lease the Freedom Tower and other buildings on the site, on the grounds that a threat to terminate the present agreement would either force a start on the Freedom Tower immediately or clear the way for a new developer to take over.

The Port Authority of New York and New Jersey is understood to be making a fresh attempt to resolve the issue, but if this fails there is a strong prospect that Mr.Silverstein will lose this valuable development concession.

In that case, the full weight of responsibility for financing the project could fall on Port Authority, which suggests that a compromise may well be reached in which the scale of the development will be reduced.

On Larry Silverstein's side is his eminence and experience in the New York property market.

He is president and chief executive officer of Silverstein Properties , a member of the New York Bar and a governor of the Real Estate Board of New York.

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