Church sues over World Trade Center rebuilding project

NEW YORK (Reuters) - The Greek Orthodox church damaged in the September 11, 2001 attacks on New York on Monday said it had sued local authorities on grounds they seized its land and prevented it from rebuilding.

Should the church of St. Nicholas prevail in court it could send authorities back to the drawing board in a World Trade Center rebuilding project already years behind schedule due to clashes over design, security and control.

The law suit centers on land the Port Authority of New York and New Jersey is using for a vast underground parking garage that is part of the project involving five skyscrapers, a mass transit hub and a memorial.

"This case arises out of the arrogance, bad faith, and fraudulent conduct of the Port Authority, as agent for all of the agencies, in preventing St. Nicholas from rebuilding its church at Ground Zero after it was crushed by a falling tower," the Hellenic Eastern Orthodox Church of Saint Nicholas and The Greek Orthodox Archdiocese said in the complaint.

The complaint, brought in the U.S. District Court for the Southern District of New York, charged that the Port Authority in March 2009 "disavowed" a 2008 agreement to let the church rebuild at 130 Liberty Street, next to its original location at 155 Cedar Street, and pay it $20 million.

The Port Authority, in a statement, said the church had sought more than it was granted in the 2008 agreement and the agency "had to make a practical decision to move on or risk further delaying the entire World Trade Center project".

"The Orthodox Church continues to have the right to build a church on their original site," the authority said.

The church also sued the Lower Manhattan Development Corp. and the Empire State Development Corp in connection with the issue.

(Reporting by Joan Gralla; Editing by Andrew Hay)