The Battle For Ground Zero, Part 91

Five weeks are left til a self-imposed deadline put in place by Governor Pataki in order for Larry Silverstein and the Port Authority to work out their differences.

Mayor Michael R. Bloomberg upped the ante recently in language certain to incite the developer, when he called on him to set aside his financial interests and "do the right thing": cede two proposed buildings and a major portion of the site to the Port Authority of New York and New Jersey so that rebuilding can go more quickly.

The mayor's blunt remarks were backed by a city financial analysis indicating that Mr. Silverstein could exhaust his money for the project and default on his lease at the World Trade Center site in 2009, yet still walk away with half a billion dollars. Talks between the authority, which owns the land, and Mr. Silverstein, who leased the property six weeks before the 9/11 attack, are at an awkward standstill, according to authority officials.

The authority contends that to speed up the process, Mr. Silverstein should build the Freedom Tower, the largest and most symbolic building at ground zero, and relinquish control of a major portion of the site so that work can proceed simultaneously on two buildings and a mall along Church Street.

Mr. Silverstein, however, has said he has the legal right, the will and, most important, the insurance money to do the entire project on a schedule that extends until 2017. The Real Estate Board of New York, the industry's powerful lobbying arm, has rallied to the developer's defense.

Silverstein has nearly completed 7WTC out of the insurance proceeds and his own money, and did so without the plodding and slow efforts evidenced by the lack of tangible progress on the rest of the site. This is all part of a continuing power play between Bloomberg, Pataki, the Port Authority and Silverstein. Every day that construction is delayed, Silverstein will end up having less money available to rebuild - as costs increase, the value of the Liberty bonds decrease, and businesses look elsewhere for setting up shop.