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News Release from: Chartered Institute of Building [CIOB] | Subject: Freedom Tower
Edited by the Buildingtalk Editorial
Team on 07 April 2006
No resolution yet to enable Freedom
Tower start
No way forward has been found for a resolution of the dispute that is holding up a start on construction of New York City's Freedom Tower on the site of the former World Trade Center.
Despite a further week of negotiations and discussions, no way forward has been found for a resolution of the dispute that is holding up a start on construction of New York City's Freedom Tower on the site of the former World Trade Center It is however believed that the owner of the site, the Port Authority of New York and New Jersey, is close to agreement with the leaseholder Larry Silverstein, who has a reputation as tenacious negotiator
This article was originally published on Buildingtalk on 27 Jun 2005 at 8.00am (UK)
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The overall shape of the deal is believed to be that the Port Authority should take over responsibility for construction of the Freedom Tower which is regarded as the least economically viable of the five towers envisaged in the redevelopment scheme.
In other words, Mr.Silverstein does not want to commit his funds to a public building which might be difficult to let and wouldn't produce rental income at the level required to cover the financing of the project.
That seems to be the economics of the situation, but the New York press is suggesting that the blockage to a resolution on these lines is within the Port Authority, due to differences of opinion over the proposed deal between the Governor of New Jersey Jon Corzine and the Governor of New York State George Pataki.
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Mr.Pataki is under growing pressure to get the project started, due not only to its innate importance to the city and indeed the United States as a whole, but because he gave an undertaking that as Governor he would see the project break ground during his term of office, which is due to end later this year.
The deadline set for resolution of the outstanding issues had been 2006-03-15 but it is now thought it may take several more weeks before a settlement is reached that will satisfy everyone involved.
Mr.Silverstein himself is urging a start as soon as possible and is credited with exerting no more than normal if somewhat unconventional negotiating tactics in securing his own interests.
He has a reputation for seeking higher than average returns from his projects, for example asking for rents which were 40 per cent above the average in downtown Manhattan when he was letting the now completed but partially occupied 7 World Trade Center.
Neither New York City nor the Port Authority want to be left with an unproductive hole in the ground for much longer because it is costing them money quite apart from the increasing erosion of political capital.
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