New York Governor David Paterson said this week that he will personally step in to resolve a dispute over funding for the World Trade Centre rebuild.
The clash between Silverstein Properties and the Port Authority of New York and New Jersey has been ongoing for months, holding up construction progress.
“What I have asked is that we spend at least a couple of weeks with me directly involved to see if perhaps we can get somewhere,” said Paterson, “and if we can’t then we’ll just go to binding arbitration.”
Silverstein Properties has agreed to postpone turning to court-appointed arbitrators following the Governor’s intervention. Paterson − who controls the Port Authority along with the Governor of New Jersey − said this was a mutual decision between the two parties.
“There was a consensus that the binding arbitration process presents an unlimited waste of time,” he said.
Towers 2, 3 and 4 are threatened by the inability of Silverstein Properties owner Larry Silverstein to secure construction loans in the current economic climate.
The Port Authority made a proposal to build at least one of the towers. Silverstein rejected the offer, calling it “a step backwards” and questioning whether other components of the project would be pushed back further.
“The binding arbitration process presents an unlimited waste of time.”
David Paterson, New York Governor
Paterson said Silverstein’s suggestion that two towers be built with loans backed by public money is unrealistic. “Where private money is eschewing the opportunity, public money should not be used either,” he said.
“The public dollar is just as important as anyone else’s. We cannot finance anyone else’s project.”
Paterson did not set a date by which his talks with Silverstein would end.
Silverstein Properties issued a ‘Notice of Dispute’ earlier this month, citing the Port Authority’s inability to meet its rebuilding obligations, and the financial and logistical consequences of these failures.
The notice triggered a two week period of negotiation – which ended on July 20 – following which either party now has the right to call for arbitration to settle the dispute. The arbitration process could take up to nine months.
Silverstein Properties executive in charge of World Trade Centre reconstruction Janno Lieber has said the company will ask for a “significant damage award” if the dispute goes to arbitration. He said this would be “what’s necessary for the project to move forward”.
In October 2008 a Port Authority report announced that it would be unable to complete key elements of the World Trade Center’s infrastructure until years after the required deadlines.
Those key elements included the underpinning of the Number 1 subway line, the PATH Hub and the Vehicle Security Center.