The Rebuilding of Ground Zero, Part 70

Has there been a thaw in the cold war between Silverstein Properties and the Port Authority? Silverstein had demanded arbitration to get the Port Authority to meet its obligations to prepare the site and insure that the preconditions to building the office towers on the site were in place.

Now comes word that the Port Authority will be in a position to offer Silverstein the financing he needs to fully build the office towers if he's able to raise $625 million. It's not going to solve the mess completely, but it does indicate that some progress has been made to get development rolling.

For the first time, the authority, which owns the site, agreed to guarantee financing for both of Mr. Silverstein’s office towers, which are to be built along Church Street, at an estimated cost of $4.2 billion, according to a letter on Monday from the Port Authority to the Bloomberg administration and the office of Assembly Speaker Sheldon Silver.

But up to $1.2 billion in financing for the second tower would come only after Mr. Silverstein raised $625 million from investors or lenders, according to the proposal.

The letter, from Christopher O. Ward, the authority’s executive director, was sent to City Hall on the same day that Mr. Silverstein sought to start an arbitration process, angrily claiming that the Port Authority had violated the development agreement at ground zero.

A spokesman for Mr. Silverstein declined to comment on Thursday. He does not view the proposal as a credible offer, according to an official who spoke with him

“I don’t believe it moves the ball forward,” said Mr. Silver, whose district includes Lower Manhattan. “I don’t believe it gets us closer to a deal.”

Mr. Silver, a consistent supporter of Mr. Silverstein, and Mayor Bloomberg organized a summit meeting in May in a so-far unsuccessful effort to broker a resolution.

Andrew Brent, a spokesman for Deputy Mayor Robert C. Lieber, who leads the city’s negotiating team, declined to comment on the proposal, citing an agreement among the parties not to negotiate in public. But two officials who had been briefed on the new proposal said that it was a step in the right direction, although they noted what they called some serious flaws.

One flaw, one of the officials said, is that the financial structure would make it nearly impossible for Mr. Silverstein to raise $625 million in the credit markets, where there is little money available for real estate projects.

It's the credit crunch that has been a recent stumbling block, and it's in this arena that the state's US Senators, Gillinbrand and Schumer, should be pushing President Obama to provide Silverstein with the access to credit needed to rebuild at Ground Zero.

Considering the thousands of jobs at stake and that this is truly a shovel-ready project, it would appear to be a no-brainer, but this is the Obama Administration we're talking about. They'd be in a position to rescue the development at Ground Zero, but are incapable or unwilling to do so.

Continued delays can and would put the completion of the 9/11 Memorial in doubt in time for the 10th anniversary commemoration.