The arbitration panel charged with ending the months-long stalemate between Larry Silverstein and the Port Authority of New York and New Jersey over development of the World Trade Center site has ruled against Silverstein, saving the Authority from having to pay the developer millions of dollars in damages and rent relief.

Silverstein filed for arbitration against the Authority in August of last year. He claimed that delays on the agency’s part in delivering construction-ready land along Church Street for three giant office towers prevented the developer from securing loans for the buildings before the credit markets collapsed in 2008.

One source familiar with the proceedings said Silverstein had hoped the panel would award him $2.7 billion in damages and rent relief of $788 million that he could have used to finance his towers. A spokesman for Silverstein refuted the figures.

But the three-member arbitration panel determined that although the Port Authority was more than a year and a half late when it finally turned the sites over in August, the agency had met all of its primary obligations to Silverstein.

The panel also ruled that there was “little if any proof of damages suffered on the part of Silverstein Properties,” a source familiar with the decision said.

“The Port Authority is grateful to the panel for issuing a responsible decision that protects public resources while creating a positive environment in which the visible, daily progress on the site can continue moving forward,” the agency said in a statement.

The news was not all bad for Silverstein.

The panel nullified a provision in his contract with the Port Authority that required him to build all three of his planned office towers by 2014 or forfeit their development rights.

With more time, Silverstein could find it easier to acquire the loans he needs to build at least two of the towers.

In a statement, Silverstein called the decision a “welcome development for New Yorkers—especially those living and working Downtown—who have waited long enough for the neighborhood to be completely restored.”

“I’m ready to work with the Port Authority 24/7 to hammer out a deal that assures that the World Trade Center is fully rebuilt as quickly as possible,” Silverstein said.

Looking ahead, the panel gave the Port Authority and Silverstein 45 days to produce a new construction schedule for their respective projects at the Trade Center site.

The Authority is responsible for building the 1,776-foot office tower at One World Trade Center, a $3.2-billion transportation hub and almost all of the underground infrastructure and utility work at the 16-acre site.

Before it draws up a new schedule for its own projects, the Authority said in its statement that the two sides “should first attempt to agree on what structures are to be constructed by [Silverstein] and when, and if there is to be a change in the plan that alters either party's rights and obligations” under their development contract.

In late 2008, Silverstein asked the Port Authority to guarantee loans for two of his three planned towers. He also promised the Authority one-third ownership in the towers if he could tell private lenders that they had first priority when the time came to repay the loans.

The third tower, Silverstein said at the time, could wait until credit markets softened.

But the Port Authority insisted that it should be first in line when the loans would come due, and instead offered to finance only one tower, and to construct truncated retail pedestals where the other two were planned.