NYC to get office tower atop midtown bus terminal

NEW YORK Tue Dec 18, 2007 6:49pm EST

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NEW YORK Dec 18 (Reuters) - Plans to build an office tower atop New York City's much criticized bus terminal in midtown Manhattan have been approved, but a $600 million deal for new shops at the rebuilt World Trade Center has been delayed, the Port Authority of New York and New Jersey said on Tuesday.

The Port Authority of New York and New Jersey was also expected to announce that Australia's Westfield Group (WDC.AX) would invest $600 million for a 50 percent stake in about 490,000 square feet of new shops at Ground Zero, The New York Times reported on Tuesday.

The Port Authority owns the land occupied by both the bus terminal and the World Trade Center site.

"We're just working through the deal," an agency spokeswoman said, explaining why the board postponed the deal with Westfield, an Australian shopping center developer, on Tuesday.

The agency also delayed for at least one year key parts of the Ground Zero memorial for the nearly 3,000 people who were killed in the Sept. 11, 2001, attacks.

A planned plaza now will not be finished until 2010 and a planned museum in 2011, the spokeswoman said, pinning the delays on the complexity of managing so many huge construction projects at once. A mass transit hub and a cluster of skyscrapers will all be built where the twin towers once stood.

Under the agreement for an office tower atop Manhattan's nearly 60-year-old bus terminal, the Port Authority will get $500 million by leasing the air rights over the bus terminal's north wing to Vornado Realty Trust (VNO.N) and the Ruben Companies. The two companies will build and operate the new skyscraper, one of several sprouting in midtown, the agency said in a statement.

Agency officials have long wanted to modernize the over-crowded bus terminal, which the Port Authority says is the world's busiest with 200,000 daily commuters. Despite several facelifts, the bus terminal remains a poor stepchild to Grand Central Terminal, the historic station that serves many of the city's rail commuters.

The Port Authority said it will use the money from the lease to upgrade the bus terminal, adding new escalators, renovating and creating 60,000 square feet of shops, and building 18 new gates to handle 70 more buses.

The decision to pick Vornado has been criticized because the company is already a dominant midtown developer. Vornado also is expected to build a new train station in a planned relocation of the current Pennsylvania Station, the hub for Long Island and New Jersey rail commuters that lies 10 blocks south of the bus station.

The Port Authority's previous pact with Vornado stalled after the real estate market slipped in the wake of the Sept. 11, 2001 attacks.

The agency, headed jointly by New York Gov. Eliot Spitzer and New Jersey Gov. Jon Corzine, also approved a new $5.9 billion budget for 2008.

It boosted its 10-year capital plan to $29.5 billion, $3.4 billion more than the program approved in 2006. Some $1 billion was added for security, with another $1 billion for Access to the Region's Core, a project that includes a new trans-Hudson River tunnel, and redeveloping the World Trade Center site. (Editing by Leslie Adler)

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