World Trade Center museum deal may lead to land sale: sources

Wed Sep 12, 2012 3:28am EDT

People are reflected in a Memorial Monument during events marking the 11th anniversary of the 9/11 attacks on the World Trade Center in Exchange Place in New Jersey, September 11, 2012. REUTERS/Eduardo Munoz

People are reflected in a Memorial Monument during events marking the 11th anniversary of the 9/11 attacks on the World Trade Center in Exchange Place in New Jersey, September 11, 2012.

Credit: Reuters/Eduardo Munoz

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(Reuters) - A long-delayed sale of land that is part of the World Trade Center redevelopment could become a reality under a new accord between the Port Authority of New York and New Jersey and the National September 11 Memorial and Museum, four sources familiar with the matter said on Tuesday.

The property, called Site 5, could fetch $135 million to $200 million, two of the sources said.

Site 5 is owned by the Lower Manhattan Development Corp, a city-state agency created to rebuild that part of the city after the September 11, 2001 attacks. Across from the World Trade Center, the land had been occupied by the Deutsche Bank building, which was damaged in the attacks and later demolished.

The accord between the Port Authority and National September 11 Memorial & Museum announced on Monday obliges the Lower Manhattan Development Corp to fulfill a 2006 agreement by turning Site 5 over to the Port Authority.

In exchange, the Port Authority would give the museum title to the eight acres of land it and the memorial occupy on the 16-acre (6.5 hectare) World Trade Center site. The memorial honors nearly 3,000 people who perished as a result of the attacks.

"Under the 2006 agreement, it (Site 5) is supposed to be swapped for the eight acres on which the museum and memorial are located," Port Authority Vice Chairman Scott Rechler told Reuters on Tuesday after a service for 84 Port Authority workers who were killed on September 11.

The land swaps were delayed by a political standoff over who would run the annual September 11 anniversary ceremonies held on the memorial plaza, two of the sources said. The sources asked for anonymity because they were not authorized to speak publicly about the matter.

The governors of New York and New Jersey, who run the Port Authority, wanted more control over the ceremonies.

The annual memorial has been managed by New York City Mayor Michael Bloomberg because he chairs the foundation that runs the museum and memorial, and the city's police are responsible for security.

The deal gives the two sides six months to finalize the land swaps. One of the sources said that if only part of Site 5 were to be transferred to the Port Authority, New York state's Public Authorities Control Board might have to approve the deal, which could complicate the matter.

MORE MONEY FOR PORT AUTHORITY

The Port Authority owns the World Trade Center complex, which it is rebuilding with developer Larry Silverstein. The Port Authority's projects include the underground museum.

Last year, Port Authority stopped building the nearly $1.3 billion museum because it was arguing with the museum foundation over cost overruns.

Monday's accord cleared the way for New York Governor Andrew Cuomo and New Jersey Governor Chris Christie to attend Tuesday's 11th anniversary ceremony by resolving the cost dispute and creating a coordinating committee to handle such events.

In July, the foundation said politicians would be excluded from speaking roles to focus on victims' families.

The sources said this pressured Christie and Cuomo to reach the accord with Bloomberg on Monday. The deal clears the way for work on the museum to resume in October, Rechler said. The project should be finished by late 2013 or early 2014, he said.

A spokeswoman for Bloomberg declined to comment. Cuomo's spokesmen had no immediate comment, and a spokesman for Christie referred questions to the Port Authority. No politicians spoke at Tuesday's memorial.

Unlike the World Trade Center land, which can only be used for commercial development, Site 5 can be used for apartments, a hotel or offices.

"The site would be most valuable if it supported apartments with a hotel on the lower floors," said Robert Von Ancken, chairman of Landauer Valuation & Advisory, a division of Newmark Grubb Knight Frank.

A combined hotel and apartments could sell for between $135 million and $150 million, based on comparable sales in the area, the height of the building and the market at the time, he said.

The Port Authority could use the cash as it struggles to find funds for the World Trade Center and airport, bridge and tunnel projects.

(Reporting By Joan Gralla; Additional reporting by Ilania Jonas)

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