Wednesday, April 18, 2012

The Rebuilding of Ground Zero, Part 157

The Freedom Tower is nearing its ultimate height of 105 stories (more than 1,300 feet) before the spire is constructed to top the structure out at its symbolic 1,776 feet.

The building is creeping towards edging out the Empire State Building as the tallest in New York City within the next couple of weeks, but it is the spire that will push the building to the top of the heap as tallest in North America (ahead of the Willis (Sears) Tower in Chicago).

There have been incalculable challenges in rebuilding at Ground Zero, not the least of which is the ongoing battles between the Port Authority and Silverstein Properties, and Tishman Construction has been caught in the middle on more than a few of those issues. This article highlights some of the issues and how Tishman has ended up playing mediator between the parties to get things built. The article focuses mostly on the towers (Freedom/1WTC, 3WTC, and the Transit hub).

That kind of glosses over the fact that the Port Authority continues to be obstinate over construction costs associated with completing the National 9/11 Museum, which was supposed to be completed this fall, but now appears to be heading towards a mid 2013 completion date as work has completely stalled.

It also ignores the fact that the Port Authority, despite being squeezed to find ways to cut costs, refused to bend on limiting costs at the PATH Transit hub, despite the fact that the $2.2 billion costs have soared to $3.8 billion and the extra costs are doing nothing to add capacity. At a time when we should be looking to maximize funds to add capacity, the Port Authority has opted to go with a plan that does not make fiscal sense. At least with office buildings, the Port Authority can recoup the costs over time with higher rents. The same can't be said with a transit hub, though some will point out that the more attractive the hub is, the more rent can be collected from the associated retail rentals that will operate throughout the complex.

Meanwhile, Westfield Properties, which operates the Garden State Plaza and owns the rights to the retail space at the World Trade Center, is selling eight of its properties to fund the World Trade Center construction/buildout costs.
Westfield, one of the world's biggest shopping centre operators, said it would dispose of the eight "non-core" malls in Illinois, New England, California, Ohio and Florida as part of strategic reshuffling plans.

"The proceeds from the transactions will initially pay down corporate debt and then be redeployed in higher return development opportunities in the US, including the World Trade Center," said Westfield co-chief Peter Lowy.

"We have previously flagged the potential divestment of non-core assets in the US and this transaction is an important step in the repositioning of our portfolio to major retail assets with strong retail characteristics," he added in a statement to the Australian Stock Exchange.

Starwood Capital Group, a Connecticut-based private equity firm, would take a majority stake in seven of the shopping centres and "manage and control" the assets. Westfield would retain a 10-percent stake.

The eighth centre, Eastland in California's West Covina, would be "sold in a separate transaction", the retailer said.

The remodelled World Trade Center, which is to include a memorial and museum to the September 11 attacks, will feature 550,000 square feet of retail space due to open in 2015.

New York's Port Authority in February cleared Westfield to take a US$612.5 million 50-percent stake in developing, leasing and operating the site's retail and dining space.
That makes sense considering that prior to 9/11, the WTC mall was one of the most profitable retail centers in the world on a per-square foot basis.

Meanwhile, as the tower comes upon the height of the former Twin Towers, some people are starting to put 1WTC into its context - critiquing it as it gains its final form and moves away from the abstract models that have preceded it for the past 5+ years. This critique is particularly interesting because it notes that when seen from afar, 1WTC does refill the Lower Manhattan skyline - something that had been absent since the towers fell. It does capture the heft and gravity of the former towers, though it lacks its twin (but some will further note that when seen from some vantages in Brooklyn that Gehry's 8 Spruce Street residential building gives Lower Manhattan its twin towers appearance.

That would not include the yet-to-be-completed 2 and 3 WTC, each of which would top out at over 1,000 feet, and would raise the height of skyscrapers in Lower Manhattan surrounding 1WTC. 1WTC would be the tallest of the crowd, but for now, it is a singular achievement.

It is also notable that the upper portion of the tower very much matches the renderings provided by SOM; the lower portion is something of a mystery since the original glass cladding had to be scrapped when it didn't pass muster for security purposes. The cladding for the bottom of the tower has yet to be revealed.

When it does, I'll be around to report on it.

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