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NY governor wades into WTC financing clash
NEW YORK |
NEW YORK (Reuters) - New York Governor David Paterson on Monday said his office will negotiate directly with Larry Silverstein over the developer's demand for more public dollars to fund two office towers being built at the World Trade Center site.
The Democratic governor on a conference call said that the public sector should not make risky loans that the private sector has already rejected, adding that Silverstein agreed to hold off for two weeks on turning over to arbitration the latest clash with the Port Authority of New York and New Jersey.
Paterson shares control of the Port Authority, which owns the site, with New Jersey Governor Jon Corzine.
Silverstein and the Port Authority have spent weeks feuding over concerns that the bi-state agency cannot pay for needed mass-transit improvements if it also guarantees the developer's loans.
Paterson said he would consider public-private partnerships and other ways of backstopping Silverstein's private loans.
"The state is not going to be the only entity that has risk in the project," the governor said.
Arbitration could take six to nine months or even longer, the governor said, and would further delay the rebuilding, which has already taken years longer than expected since the September 11, 2001 deadly attacks destroyed the complex.
A spokesman for New York Mayor Michael Bloomberg, who had sponsored talks to break the impasse, suggested the mayor sided with Silverstein on the issue.
"We also continue to believe pitting critical transportation projects against progress with redevelopment downtown creates a false choice," mayoral spokesman Andrew Brent said in a statement.
In a statement, Silverstein said he appreciated "the governor's direct involvement and leadership in seeking to forge a resolution that will allow the rebuilding of the World Trade Center to move forward."
Australia-based Westfield Group has offered to cover the costs of developing the retail portion of the new complex. Paterson said this proposal and Silverstein's were not necessarily "mutually exclusive."
But Silverstein has rejected the Port Authority's idea of building the towers just high enough for shops then waiting to build higher until demand for office space revived.
New York office rents are falling and real estate loans have withered during the recession.
The developer says his advisor, Goldman Sachs, agrees that he cannot raise the $625 million the Port Authority demands because it would be junior to his obligations to it.
After becoming governor last year, Paterson ordered the Port Authority to devise new and realistic timetables for finishing the rebuilding.
Paterson said the revised deadlines will be reviewed, along with the developer's estimate that he has already invested $4 billion in the project.
"We don't think he has assumed enough risk," the governor said.
Several other lawmakers, including state Assembly Speaker Sheldon Silver, have tried to speed the rebuilding, which has proceeded slowly after lengthy lawsuits and clashes over designs and security were solved.
Most of the memorial to the nearly 3,000 who perished should be finished by the 10th anniversary of September 11.
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