NEW YORK CITY — Silverstein Properties and the Port Authority of New York and New Jersey have reached several financial agreements that will jump-start the restoration of the east side of the World Trade Center site. The development plan calls for the construction of three office towers in addition to the One World Trade Center project that is already under construction at the site. Silverstein is the leaseholder of the three towers, and the Port Authority is the site owner.
The plan calls for the continued construction of Tower 4, a two-million-square-foot building that is on track for a 2013 completion. The $1.81 billion project is being funded by $1.36 billion in Liberty Bonds and $450 million in insurance proceeds. Upon completion, the Port Authority and the City of New York will occupy 1.2 million square feet of the tower.
The agreement also calls for construction to immediate begin for Tower 3. The project will initially be built to podium level but is expected to be complete by 2015. The project's initial phase will be funded entirely by insurance proceeds. The remainder of the tower's financing will be private-market driven through a 400,000-square-foot preleasing condition, a $300 million equity and/or debt requirement, and the need to secure more than $1.3 billion in Liberty Bonds and taxable debt. Public financial support for this project is capped at $200 million apiece for the Port Authority, the City of New York and the State of New York.
Finally, construction for Tower 2 will begin immediately. The project will be built to street level, with vertical construction beginning based on market demand. The project will receive no public financial support.
In a statement, Silverstein President and CEO Larry Silverstein said, “The approval today of the World Trade Center development agreement is fantastic news for New York. Downtown has emerged as one of the world's most exciting mixed-use neighborhoods, offering an unparalleled blend of high-tech office space, retail, residential living and cultural attractions. This agreement will ensure that we continue this momentum with a new generation of cutting-edge, green skyscrapers becoming available starting in 2013.”
This agreement caps off a year of significant progress in construction at the World Trade Center site. Construction for One World Trade Center has reached the 36th floor and is on track for completion in 2013. Confidence in the project was shored up when The Durst Organization invested $100 million in equity into the project, and a letter of intent was signed with publisher Condé Nast for 1 million square feet of space at the new tower. In addition, the 9/11 Memorial is on track to open next year on the 10th anniversary of 9/11. Finally, construction continues on the new WTC Transportation hub, with support structures currently being installed.
— Coleman Wood