Borough head asks IBO to resolve WTC dispute

Real Estate Weekly, March 1, 2006

The Independent Budget Office has agreed to prepare an analyses of the New York commercial real estate market in response to Manhattan borough president Scott M. Stringer's call for the review of the economic conditions surrounding the rebuilding of Ground Zero. Stringer called for the review to help resolve the dispute between Mayor Bloomberg and Larry Silverstein that threatens to stall the World Trade Center reconstruction process.

At a press conference at his office on February 17, Stringer said New Yorkers deserved to hear from an independent voice about the real financial and economic scenarios at the center of the debate over rebuilding. The Mayor and Silverstein disagree over whether Silverstein Properties will be able to construct the WTC towers within the anticipated timeline.

"While the Mayor's warnings should be taken seriously, both sides appear to be rigid in their positions," Stringer said. "Until this issue is resolved, it seems that the development of Ground Zero will be stalled indefinitely. That cannot be allowed to happen. New Yorkers need a neutral voice to clarify this issue so that we can move forward on the rebuilding of lower Manhattan."

Underlying many of the points raised by Mayor Bloomberg about the realism of Silverstein Properties' plans for the WTC site are questions about conditions in the lower Manhattan real estate market and broader trends in the City's office space market. In his letter to IBO director Ronnie Lowestein, Stringer asked that the agency review the total amount of new office development likely to be needed in the City as a whole in the coming decades, and then use these findings to comment on the Bloomberg administration's January 2006 "World Trade Center Site: Summary of Financial Analysis," and a similar analysis by Silverstein Properties. Stringer also requested that this analysis be prepared before the March 14 deadline set by Governor Pataki for Silverstein to reach agreement with the Port Authority of New York and New Jersey.

According to Lowenstein, the IBO will make an effort to build upon a previous office market study done by the agency for the review of the redevelopment of the Hudson Yards. That study explored possible market conditions up to 2035, but the WTC analyses might of necessity cover a shorter time span.

"The timeframe [for this review] is very short -we've made a committment to do as much as we possibly can before March 14th," Lowenstein said.