LARRY Silverstein wants to keep building his three World Trade Center towers no matter what the current market conditions, one of his executives says – and the real-estate industry is right behind him.
But the credit crisis and the consolidation on Wall Street could become additional obstacles in Silverstein’s road to completing all three towers by 2012.
“We need first-class office space,” said a major broker who represents large financial-services firms. “He should build them no matter what detractors say.”
The 77-year-old Silverstein has worked through many cycles and knows that having new office space on tap when the real estate market is ready for them would be a big plus for the downtown economy.
“We’re not building for today’s market, but for three to five years from now,” insisted Janno Lieber, president of World Trade Center Properties, a Silverstein Properties unit.
“It is absolutely essential that New York get on with the business of building the next generation of innovative and green office towers,” Lieber said. “We need this space to keep pace with our international competitors and keep high-wage jobs in New York City.”
Kent Swig, president of Swig Burris Equities, another major downtown office owner and developer, concurred.
“I’d rather build in a bad market delivering into a good market,” he said. “The logic [of waiting until there is a good market to build] is completely flawed.”
The owners of the site, the Port Authority of New York and New Jersey, must also first talk with the developer about new timetables, after Port Authority Executive Director Christopher Ward releases a progress update report tomorrow.
“We need to sit down with him about the market and [financing],” said an official who spoke to The Post on the condition of anonymity.
Of course, if officials suggest delaying any of the three towers, Silverstein would likely suggest getting a break on the $88 million in rent that he forks over every year to the Port Authority on the essentially vacant land.
Work has not yet begun on Tower 2 – the largest of the three buildings, which will have a quad-diamond diagonal top and will be located next to the Freedom Tower. The land is still being excavated by the Port Authority, and would therefore be the most logical tower to delay.
In a January speech, Silverstein said Towers 3 and 4 would be topping out by mid-2010, and Tower 2 by mid-2011 – a timeline that may now change based on when the Port Author ity can deliver a vehicle-screen ing center, utili ties and roads.
The screening center – which is crucial for bringing in and out construction materials both for tenants and to dismantle the cranes used to build the towers – is being held up while the Deutsche Bank building awaits demolition.
As part of its new schedule, the official confided, the Port Authority will immediately start building the vehicle-screening center on land next door.
Utilities are also needed for work on the towers while Greenwich Street is extended as part of the plan for the towers to open up onto the newly created road.
Work, meanwhile, forges ahead on Towers 3 and 4, but at some undisclosed point in the future Silverstein will also need to put his hand out to bankers for further construction funds.
Silverstein has “a strong head start” on paying for the towers through insurance proceeds and the availability of tax-exempt debt financing known as Liberty Bonds.
But what is needed right now, the developer believes, is the market’s confidence that government can build the infrastructure necessary to support the office towers – that is, the transit hub, the vehicle-security center and the roads and utilities.
“To the extent a more reliable and more transparent timeline is achieved, the better off we all are,” said Lieber. “Hopefully the impact will be minimal, but it’s hard to say right now. Our hope is that the Port’s process will lead to a reasonable yet aggressive timetable and that we can move swiftly from there.”
Swig said private owners like him have already relied on the Port Authority’s previously announced opening dates for the buildings and the PATH terminal to bring and retain tenants at certain rents, and to schedule hotel construction to accommodate the flood of expected visitors.
The Port Authority official said the agreement by architect Santiago Calatrava to add columns to the underground PATH station design and changes to the way the soaring above-ground “spines” are anchored underground will make it faster and easier to build. It will also save more than $250 million, even as the overall cost balloons to over $3 billion, and visually the structure has gone from birdlike to resembling a lumbering stegosaurus.
Since 27 million square feet of offices was removed from downtown’s inventory after the 9/11 terrorist attacks, and through the renovation of offices into residential space, Swig said, “New York ultimately needs the office space, and they have to get [the towers] finished. And they can find a thousand excuses not to build, but they have to build it.” [email protected]
