Date: Fri, 4 Apr 2003 00:30:27 -0500 (EST) From: Louis Epstein Subject: WTC Rebuilding #198:Bloomberg Pushes Swap,New Jersey Objects, Westfield Knocks Libeskind Various items of rebuilding interest in recent days... this one from the NY Times on the land swap: ---------------------- Forwarded Message: --------------------- Subject: NYTimes.com Article Date: Wed, 2 Apr 2003 23:32:22 -0500 (EST) Bloomberg Administration and Port Authority Get Closer on Possible Land Swap Deal April 1, 2003 By CHARLES V. BAGLI The pending deal between the Port Authority and the Bloomberg administration to swap the land beneath two airports for the World Trade Center property has picked up momentum in recent weeks, even as it has become a game of political pick-up sticks setting off repercussions on both sides of the Hudson River. The proposed deal appeared breathtakingly simple when it was announced last August: The city would give the Port Authority the 5,610 acres it owns beneath two city airports in exchange for the 16-acre trade center site and lots of cash. The city would gain control of the site, while the authority would get control of the airports. After languishing for months over the terms, the talks on the land swap were revived early this year. Joseph Seymour, executive director of the Port Authority, and Daniel L. Doctoroff, deputy mayor for economic development, met again yesterday to discuss the arrangement. There are still many unresolved issues, including the economic wisdom of the swap for the city. But if it does happen, the officials involved in the talks said, it would occur by July 1 and the start of the city's next fiscal year. Although progress is slow, the officials said that the two sides had gotten closer on three key points. The Port Authority would turn over the site and pay the city $700 million to $800 million in return for the airport land. This puts the two sides considerably closer than the $400 million that once separated them. The mayor would have an advisory role over the future of the airports, but not the veto power he initially sought. And the city would take control of the trade center site, after a development plan was arranged that included a memorial park, a transit center and perhaps the first office tower. The city is also pressing the authority to commit to a continuing financial role in rebuilding downtown. The deal is good for both sides, said Stephen Berger, chairman of Odyssey Investment Partners and a former executive director of the Port Authority. "It is in everyone's long-term interest to do it," he said. "The Port Authority actually does know how to run airports and does a good job of it." Gov. George E. Pataki favors the deal and wants to do something to help Mr. Bloomberg, one New York official said. But the official added that he expected New Jersey, the state's partner at the Port Authority, to demand its "pound of flesh" for helping. Micah Rasmussen, a spokesman for Gov. James E. McGreevey, said: "The governor has serious questions about the financing for this deal and how it would affect New Jersey. We have no information as to how the properties are being valued." For many critics the biggest question is, will the city get enough money? It is no simple matter to value either property for the future. There are no longer any income-producing buildings at the trade center site. Revenue at the airports fell more than 18 percent in the last year, and several airlines are threatening bankruptcy. Critics have asked why the city should give up a steady rent from the Port Authority and partial control of the airports in return for a "one-shot" dollop of cash and 16 unproductive acres. Mr. Doctoroff said: "The swap allows New York City to develop the World Trade Center site in a way that best serves the interests of the entire city. Financially, the swap is a win for the city because of the immediate payments and because over the long run, the right development on the World Trade Center site will enhance the economic vitality of all of Lower Manhattan." The city is under economic pressure to get a deal done soon, whether it is a land swap or a lease extension beyond 2015 at a higher rent. The administration's 2004 budget, which begins in July, includes a $690 million payment from the Port Authority for back rent and a down payment on a new arrangement at the airports. A deal would also help the Port Authority, whose financing efforts have been hobbled by the looming expiration of the lease at the two airports in 2015. "If we can get ownership of the airports and a reasonable settlement with the city, then we'll control our own destiny," said Charles A. Gargano, vice chairman of the Port Authority. "We'll get out of the real estate business." The airports and the trade center have long been a source of friction between the city and the Port Authority, which built the trade center complex. The complex generated an estimated $371 million in revenues in 2000, and paid the city $26.6 million that year in lieu of taxes. Mayor Rudolph W. Giuliani viewed that as a paltry sum and filed a lawsuit, charging that the payments should be closer to $100 million, the equivalent of property taxes. The Giuliani administration also refused to extend the airport leases beyond 2015 because, it said, the authority paid so little for use of the land. In 2001, Kennedy and La Guardia airports generated a net income of $153 million, but the authority paid the city only $13.3 million in rent. Under a complicated formula, the rent dropped to $3.5 million in 2002. The dispute is now before an arbitrator. But the two sides have also been discussing the swap and its ramifications. Any deal would almost certainly affect the fate of the Lower Manhattan Development Corporation, the agency charged with rebuilding downtown, and Larry S. Silverstein, the developer who currently owns the commercial lease at the World Trade Center. A swap could also force the authority into a second costly deal, to pay the city of Newark for the land it owns beneath Newark Liberty International Airport. The Port Authority currently gets $120 million in rent from Mr. Silverstein, who plans to build five new office towers at the trade center site. According to one person at the Lower Manhattan Development Corporation, Mr. Silverstein "is adamantly opposed" to a city takeover. Under a swap, the city would receive the rent payments. In a speech in December, Mayor Bloomberg outlined a broad plan for downtown that included parks, cultural institutions, housing and some office development, but not the 10 million square feet Mr. Silverstein and the authority want to rebuild. Under the plan devised by Mayor Bloomberg and Mr. Doctoroff, the city would take over the land, buy out Mr. Silverstein and get the insurance proceeds from the attack on the trade center, somewhere between $3.5 billion and $6.7 billion. Top state officials and some executives at the Lower Manhattan Development Corporation criticized Mr. Doctoroff's intentions even as they acknowledged that there was momentum for a deal. They said that Mr. Doctoroff did not want to build new office towers downtown that would compete with his effort to develop the far West Side of Manhattan and build a stadium for the 2012 Olympics. In response, Mr. Doctoroff said: "There is no relation between the two. We've made it clear what we think the demand will be for office space downtown." http://www.nytimes.com/2003/04/01/nyregion/01SWAP.html?ex=1050344342&ei=1&en=331 a4af92d0c03d0 Copyright 2003 The New York Times Company ---------------------- End forwarded Message: --------------------- Not surprisingly,the transfer of the site from the two states to the city alone is not too popular with those whose ownership rights are thus taken away... http://www.nypost.com/news/regionalnews/72550.htm tells of New Jersey's opposition to the swap.So far no organized opposition from the New Yorkers outside the city limits(of whom I am one). There's also opposition to the swap from the other side, from elected officials in Queens who will have far less leverage over Port Authority-owned airports. The swap of course would allow the redevelopment process to be Bloomberg-ized,and introduce new layers of political and bureaucratic approval.Silverstein is also strongly opposed. Opposing the swap deal should be part of our next rally agenda. On another front, http://www.nypost.com/news/regionalnews/72644.htm tells that Westfield America,the WTC retail lessees, is against the Libeskind plan and its very different flow for the retail space,which they see as a downgrade on what they had before.The letter they wrote weeks ago was just unearthed by the Post. Frankly,the different treatment of the retail space is the fault of the program requirements issued by the "Leave Manhattan Destroyed Committee",with its obsession with the urban-utopian street-level focus.Perhaps Westfield would back the WTCRM architectural competition since we have no such requirements! I was very disappointed that the article for which Jessica Bruder,freelance journalist,interviewed me appeared recently in the Washington Post and turned out to slam the idea of building tall on the site and sucked up outrageously to the fears of working high up that the terrorists sought to create. Those in the area can write to the Post and condemn it... I can give her Yahoo email address to those who have read the article also.It's at http://www.washingtonpost.com/wp-dyn/articles/A45185-2003Mar28.html for your reading annoyance! Izeklah continues to work on his www.restorewtc.com website and I continue not to understand what it would offer that existing pro-rebuilding websites don't,though if course I'll link to it from http://www.put.com/wtc/ when available. Daniel Libeskind will be presenting his WTC plan at the 250 Broadway hearing room used for Community Board 1 meetings on Monday,April 14th at 6 PM.This is a serious opportunity for NYC-nbased rebuilders at the very least to take up seats that might otherwise be taken by those there to demand that the plans be made even worse.Be prepared for oppressive security...they demand photo ID from whoever shows up! Tom Auchterlonie's proposal on the NYCS board that pro-rebuilders who attend invite Libeskind to dine with them seems unrealistic, but dialogue is useful. Attending or not,feel free to write Libeskind at info@daniel-libeskind.com but of course he buys all the reluctances to build as tall as we must in terms of occupied space.I continue to urge writing to Bank of America as a potential prove-this-wrong anchor tenant demanding a very tall signature tower. See you on the 111th floor on 9-11-11! -=-=- The World Trade Center towers MUST rise again, at least as tall as before...or terror has triumphed.