Carl Glassman / Tribeca Trib

Janno Lieber, who heads WTC construction for Silverstein Properties, tells a Community Board 1 committee July 13 that the developer would seek a "significant damage award" from the Port Authority if the two sides enter into arbitration talks later this month. Lieber's last-minute appearance followed a report by the Port Authority on its progress in developing the site..

In an unusually candid public appearance by one of the major players in the redevelopment of the World Trade Center site, Silverstein Properties executive Janno Lieber said on Monday, July 13, that the developer would ask for a “significant damage award” from the Port Authority if the two parties enter into arbitration later this month.

“It’s not about just what’s best for [Silverstein Properties] or what’s best for the Port Authority, but what’s necessary for the project to move forward,” Lieber, who heads Silverstein's WTC construction, told Community Board 1's World Trade Center Redevelopment Committeee. His comments came a week after Larry Silverstein announced that his company would seek arbitration against the Authority.

The 78-year-old developer, unable to secure loans for three massive office towers he has planned for the site, has claimed that the months of stalled negotiations and construction delays are costing precious time and even more precious money.

The Authority, in response to Silverstein’s arbitration notice, offered to back up $1.2 billion in financing for construction of the developer’s Tower 2—on top of its previous offer to back almost $1 billion in loans for his Tower 4—if he could come up with $625 million in financing on his own.

“I think everybody who's involved in this process knows that that's just not available,” Lieber said, indicating that it was unlikely Silverstein would accept the offer.

Silverstein Properties / Tribeca Trib

A rendering of the completed World Trade Center site. At right, along Church Street and a reconstructed Greenwich Street, are Larry Silverstein's three proposed office towers.

Lieber told the CB1 committee that the company would look to recover at least some of the $2.75 billion in ground rent Silverstein has paid to the Authority since Sept. 11, 2001, when the site was destroyed. Silverstein signed a 99-year lease on the property just six weeks prior to the 9/11 terrorist attacks.

The two sides have until June 20 to reach an agreement, at which point either of them can initiate the arbitration hearings.

“If we can't make a new deal, we have to find a way to get the money back [from the Port Authority] so we can build some buildings,” Lieber said. “We've been paying rent as if the Twin Towers were still standing and full of tenants. At some point, given the delays that have taken place in the redevelopment of the site, that stops being fair."

Port Authority spokesman Steve Coleman said the agency's offer is more than adequate to jump start construction of Tower 2 while protecting its many planned projects.

“Without a significant private sector investment, Tower 2 would become nothing more than publicly-subsidized speculative office space,” Coleman said.

In its latest proposal, the Authority gives Silverstein the option of waiting to secure the $625 million in loans until construction of a retail base of Tower 2 begins, delaying a decision on completion of the entire 78-story tower. During his half-hour Q-and-A with CB1 members, Lieber criticized the Authority’s offer as “impractical,”

“There's some tendency to look at construction as if it’s Lego, where you'll just build this much and then you'll build [the rest] later,” Lieber said, adding that capping Tower 2’s construction at just a few stories would require a costly and time-consuming redesign of the building’s support structure. “I think the community has lived enough with half-finished projects to know what I'm talking about.”