The Rebuilding of Ground Zero, Part 110

The Port Authority and Durst Organization has entered into a deal enabling the Dursts to handle Freedom Tower marketing/leasing and a 10% ownership stake for $100 million.

The Port Authority of New York and New Jersey approved the terms of a partnership deal with the Dursts on Thursday in which the family would pay $100 million for a roughly 10 percent stake in the $3.3 billion building. In the future, the Dursts’ investment could swell to $300 million.

When the deal is complete, the Dursts will take over responsibility for leasing the tower, whose steel superstructure now rises 320 feet above street level, managing the property and dealing with construction of tenants’ spaces.

Earlier this week publishing giant Conde Nast was reported to be interested in 1 million sf at 1WTC/Freedom Tower beginning in 2014 when the tower should be ready and would be the largest tenant at the 1,776 foot skyscraper that has nearly 2.6 million sf of space.

The Rebuilding of Ground Zero, Part 109

The construction of 1WTC (Freedom Tower) got a big boost as it appears that Condé Nast is going to move from Times Square down to the WTC.

On Tuesday, the authority signed a tentative deal to move the Condé Nast headquarters to 1 World Trade Center, the 1,776-foot skyscraper now under construction at ground zero. That would make it the building’s largest private tenant so far and one with trend-setting cachet to boot.

In the cold, mournful aftermath of the terrorist attack on the World Trade Center, it was unclear what companies, if any, would move back to that scarred piece of earth. For a long time, it appeared that government agencies were the only likely tenants.

Mitchell Moss, a professor of urban planning at New York University, said the Condé Nast deal could be a turning point, noting that 1 World Trade Center, which will be the city’s tallest building, sits across West Street from the newly opened Goldman Sachs headquarters.

Think: Anna Wintour, the imperious editor-in-chief of Condé Nast’s Vogue, who inspired the novel and film “The Devil Wears Prada,” and Graydon Carter, the bon vivant editor of Vanity Fair, stepping out of black limousines at ground zero.

“We will have the best-paid bankers and best-dressed editors across the street from each other,” Mr. Moss said. “What young ambitious person would not want to be downtown now?”

Condé Nast is not the only high-profile tenant now considering 1 World Trade Center, expected to be completed in 2013. Bank of New York is also considering it as one of several sites.

The Port Authority declined to comment on any negotiations with tenants. Stephen Sigmund, a spokesman for the authority, did say, “There is clearly momentum both in the building of the World Trade Center site and the growing interest from potential tenants.”

The publishing giant would become an anchor tenant in the Freedom Tower. Condé Nast's current landlord is the Durst Organization, which is currently working to finalize a deal to market and lease the Freedom Tower along with a stake in the building.

Some employees were looking forward to the move, which couldn't come before 2014 at the earliest (the building is still under construction), but as should be expected, others aren't looking forward to the move.

Meanwhile, the outrageous outrage over the LPC rejection of landmark status for the buildings where the Cordoba House proposes a community center and mosque continues.

A lawsuit is being filed against the LPC claiming that politics steered the decision rather than the architectural merits. Those lawsuits have little chance of success because as the LPC member statements show - they understood both the political and emotional arguments for landmarking, but the process still required looking at the architectural merits for landmarking and the buildings simply didn't merit such status.

The fact is that the lawsuit itself is a political gesture to force the landmarking of a structure that doesn't merit landmarking on the merits. But that wont stop them from trying to derail the project, which still has to get approval at the City Council.

Moreover, even if the LPC was forced to reconsider the decision, it would not derail the project. Instead, the LPC could force the Cordoba House backers to simply redesign the facade and take other measures to maintain the historical integrity of the building. It might cost more to carry out those efforts, but it would not kill the project.

The Rebuilding of Ground Zero, Part 105

Leave it to the New York Times to sound downcast over how the Port Authority had selected the Durst Organization to operate and market the Freedom Tower (1WTC). Let's not forget that the Times is a real estate venture as much as it is a newspaper publication, and its midtown skyscraper headquarters competes with the construction at Ground Zero. The paper had repeatedly downplayed the viability of office space at Ground Zero.

The authority’s board met Wednesday and selected Durst over the other finalist, the Related Companies, one of the city’s most prolific developers. The authority and the Dursts plan to negotiate a final agreement over the next 30 days. If the deal is completed, the Dursts will invest at least $100 million for an undisclosed stake in the project and take over leasing and management of the building.

The authority figured that it was good at building but would need an expert to lure top-notch tenants from the United States and abroad. In one of the more intriguing possibilities, the publishing giant Condé Nast has expressed interest in moving to 1 World Trade Center from a Durst building in Times Square.

“We’re extremely pleased that some of the most prominent developers in the country saw market value in this world-class office tower, and engaged in an extremely competitive process for a stake in it,” said Anthony R. Coscia, the authority’s chairman. “What is most important is that we reach an agreement that is good for the building, for the World Trade Center site and for the region.”

So far, the Beijing Vantone Industrial Company, a Chinese real estate firm that signed a lease for the 64th through 69th floors, a total of about 190,000 square feet, is the sole private tenant. The authority has preliminary agreements with the state and federal governments for one million square feet.

The authority had explored selling the building in 2007 to a private equity firm, but the recession quickly wiped out that possibility. In January, the authority solicited interest from a select group of developers who might be interested in a partnership deal. Six responded: the Durst Organization; Steven Roth, chairman of Vornado Realty Trust, a national real estate company; Mortimer B. Zuckerman, chairman of Boston Properties and the owner of The Daily News; Brookfield Properties, one of the largest landlords downtown; Hines, an international developer based in Texas; and Stephen M. Ross, chief executive of the Related Companies.

Well, the naysayers were wrong - as I'd been saying all along. There was strong competition for the right to manage the site and have a stake in the construction project. That belies the claims that the tower would be a white elephant and remain empty even with a poor real estate market.

That there was such strong competition for the rights shows the folly in forcing Larry Silverstein out of the project in the first place. He was in a position to get the tower built quicker and yet the Port Authority dragged its feet, leading to delays throughout the site.

But that's all water under the bridge now as the Freedom Tower is now about 25 stories tall.

So, who is the Durst Organization? It's one of the City's largest real estate family ventures, and among its holdings is the nearly completed environmentally friendly Bank of America tower at Bryant Park in NYC and 4 Times Square.

UPDATE:
The Daily News further points out that Doug Durst had a turnaround of his own on the feasibility of the Freedom Tower - he had questioned the feasibility of the project just a few years ago.