The Battle For Ground Zero, Part 62

Mayor Bloomberg needs to cease and desist in his sniping at Larry Silverstein. His sudden interest in Lower Manhattan isn't only worrisome, but is threatening whatever construction that may occur in the future of Ground Zero.

Mayor Bloomberg is putting muscle behind his recent explosive remark that he'd like to boot developer Larry Silverstein from Ground Zero.

Bloomberg has balked over the $3.5 billion in low-interest Liberty Bonds that Silverstein says he needs from the city and state to redevelop the World Trade Center site, sources tell The Post — potentially threatening his ability to finance construction of all five planned office towers.

Bloomberg has not said no to giving any bonds to Silverstein, but wants "flexibility" to use some of them for unspecified projects beyond Ground Zero, according to downtown players familiar with the machinations.

That's trouble because, one rebuilding official said, "Silverstein is making clear he needs inducement for the entire project — all $3.5 billion in bonds — to show the people financing him that there's a viable financial plan."

Sorry, but the Liberty Bonds were designed to rebuild Ground Zero first and foremost. If there is any need greater than the rebuilding of Ground Zero, I'd like to hear it from the Mayor or anyone else. Bloomberg is yanking Silverstein's chain around for no reason other than because he can.

But about two weeks ago, with the two sides closing in on a deal, Deputy Mayor Dan Doctoroff stunned state officials by telling them the city might want to use some of the bonds elsewhere.

"It came out of nowhere," a real-estate executive familiar with the situation said.

A different source said: "This is Bloomberg's power play to put the squeeze on Silverstein over towers 3 and 4" — office buildings with stores planned on Church Street just south of the new PATH terminal.

Last month, Port Authority and state officials said they want to kick-start retail development on their lower floors, even though Silverstein opposes having big shopping atriums under his towers.

The city's ploy on the bonds throws a monkey wrench into an already fraught negotiation with the leaseholder.

At a meeting with The Post's editorial board last week, Bloomberg, asked if there was a disagreement between state and city over the bonds, said only, "You can't negotiate publicly. I'm trying to strike the best deal for the city."

If he's trying to negotiate in the best interest of the city, then he should let Silverstein get on with the rebuilding instead of inserting new conditions and threats.

UPDATE:
Cross posted to Don Surber.

UPDATE 11/2:
Multiple politicians are coming to Silverstein's defense. Both Sen. Schumer and Sen. Clinton have voiced their support for Silverstein's plans to rebuild 10 million square feet of office space at Ground Zero.

UPDATE 11/2:
The NY Post editorial board wonders why Bloomberg finally gets around to talking about Ground Zero with less than 2 weeks to the election, and does so in a way that would bring to a standstill whatever work has gone towards rebuilding thus far. Explanations are needed, but I have some ideas. The Ground Zero office space would impede the building of the Atlantic Yards project that would bring the NBA Nets to Brooklyn, along with thousands of units of housing and office space. Forest City Ratner is behind that project, and they don't much appreciate competition for their existing and planned office projects. That's one angle.

Another angle is that Bloomberg figures that since Ferrer has talked the talk about the housing crunch, and that's why he's injecting the building of housing at Ground Zero as an issue. Expect this issue to be dropped hours after Bloomberg wins the election by 30%.

Technorati: World Trade Center, WTC, Pataki, LMDC, urban policy, Freedom Tower, IFC, International Freedom Center.