World Trade Center Site Owner OKs Development Deal

Ending four months of messy negotiations over control of ground zero, the World Trade Center site's owner on Wednesday approved a deal with developer Larry Silverstein that scales back Silverstein's role on the site and surrenders his job as landlord of the iconic Freedom Tower.

"This is a real turning point in the development of lower Manhattan," said Anthony Coscia, chairman of the Port Authority of New York and New Jersey, which owns the site.

The rewriting of Silverstein's 99-year lease to the fallen twin towers gives the Port Authority control of two out of five planned office towers, including the 1,776-foot Freedom Tower that Silverstein has been developing. Silverstein will lease three other towers that are considered to be in more lucrative spots on the 16-acre lower Manhattan site.

Officials said the deal ensures all five planned towers would be built by 2012.

Silverstein had sent a letter Tuesday to top executives at the Port Authority agreeing to accept the economic terms of its latest offer. He signed off on a conceptual framework with the agency Wednesday morning, Gov. George Pataki said in a telephone interview. The agency's board approved the deal at a meeting later Wednesday.

"We have an agreed-upon framework and we can move forward," Pataki said. "This is the last stumbling block to putting shovels in the ground" on the Freedom Tower, he said.

"This is about moving the rebuilding forward as quickly as possible," Silverstein said at a news conference Tuesday outside his 7 World Trade Center building, which he recently rebuilt, facing ground zero. "All the finger-pointing must stop."

Pataki said Wednesday that construction on the Freedom Tower would begin "in the very near future," although a date hasn't been set. Politicians had repeatedly said construction would officially begin by the end of the week.

The deal gives the Port Authority control of the skyscraper that is symbolically replacing the twin towers, but Silverstein would continue as its developer.

Silverstein would build three towers on the site and pay an additional $1.75 billion in rent over his 99-year lease in exchange for promises to fill more than 1 million square feet of office space towers under Silverstein's control with state and city leases. The Port Authority promised to secure additional leases and would move executive offices into the Freedom Tower, said vice chairman Charles Gargano.

The Port Authority would take over a fifth tower, located just off the site, which Silverstein said likely would become an apartment building.

Pataki said the plan "will make certain that the rebuilt World Trade Center will anchor the financial capital of the world and make our nation proud."

State officials agreed to contribute $250 million to help build the office space, and Silverstein and the Port Authority agreed to divide billions of dollars in insurance proceeds and tax-exempt bonds to rebuild. Silverstein's higher rent would help the agency provide $100 million for the trade center memorial.

Silverstein said he would accept the deal with conditions, including a guarantee that he wouldn't lose the right to build all towers if the Port Authority couldn't secure promised leases or prepare land for him to build in time. The deal requires him to build three towers surrounding a transit hub by 2011.

The Port Authority, which also owns the region's airports and shipping piers, began renegotiating Silverstein's lease in December. It walked out of the talks in mid-March, saying Silverstein was being greedy.

The developer and politicians have accused each other in recent weeks of being unreasonable and stalling rebuilding.

Mayor Michael Bloomberg, one of Silverstein's harshest critics, said Tuesday that Silverstein took a risk by leasing the twin towers in 2001, six weeks before the Sept. 11 attack, "and he deserves to be compensated for it."

But "there just comes a time in every negotiation where you have to say enough," he said. "I think that time is now."