Westfield might break World Trade Center impasse

By Ilaina Jonas and Joan Gralla

NEW YORK, June 10 (Reuters) - Westfield Group (WDC.AX) offered to cover the costs to develop the retail portion of New York City's long-delayed World Trade Center.

The statement by the Australian mall owner comes just one day before a deadline Mayor Michael Bloomberg set for negotiating a new accord between the land-owning Port Authority of New York and New Jersey and developer Larry Silverstein.

Bloomberg has no control over the site, which is owned by the Port Authority of New York and New Jersey. The agency is controlled by the governors of those states.

Based on Westfield's January 2008 agreement with the Port Authority, that could cost the developer $1.25 billion.

Silverstein, who leased the 16-acre office complex just weeks before the September 11, 2001 air attacks, wants the authority to guarantee loans for two of his three office towers.

Real estate loans remain scarce for commercial developments. The Port Authority has been reluctant to finance more than one of Silverstein's towers though it would become the owner if he defaulted.

Westfield, among the world's largest shopping center operators, has access to $8 billion of liquidity. Westfield offered to continue with an existing joint venture it reached with the Port Authority or even take on the project by itself.

"To move the World Trade Center forward the best way to go is for the retail to lead, because we can lease it, we can finance it and we can execute it," Peter Lowy, group managing director, Westfield Group, said.

A spokesman for Silverstein, who has said the Port Authority's concerns about how long it might take to rent the new office towers are overblown, declined comment.

A series of lawsuits, then clashes over designs and security issues have delayed the rebuilding.