NY WTC rebuilders might solve impasse by June 11

NEW YORK (Reuters) - The latest logjam delaying the rebuilding of New York's World Trade Center might be cleared by June 11, but that will require compromises, including a "realigning of the incentives," Mayor Michael Bloomberg said on Thursday.

World Trade Center developer Larry Silverstein will probably be pressed to make more concessions to get the Port Authority of New York and New Jersey to guarantee bank loans for two of the three office towers he wants to build where the twin towers stood until the deadly attacks on September 11, 2001.

"Private development should be fundamentally backed by private capital," Bloomberg told reporters after hosting a meeting at Gracie Mansion for Silverstein, Democratic Assembly Speaker Sheldon Silver, as well as the Port Authority and the Democratic governors of New York and New Jersey who run it.

After years of delays due to battles with insurers and clashes over designs and security, the Port Authority missed a deadline for preparing the site for Silverstein. The recession has curbed banks' willingness to lend money for new buildings that lack tenants, as Silverstein's towers largely do.

As a result, the site remains what the mayor, an independent, called "a hole in the ground."

Yet failing to rebuild it could cause the city to miss the next economic boom due to a lack of office space, Bloomberg warned. The mayor has no direct role in the rebuilding because the Port Authority owns the site. But he is running for a third term in November and he has seized the bully pulpit.

"Creating the roadmap is going to require compromises from all of the parties," he said, adding that ways will have to be found to "safeguard public resources."

Silverstein said in a statement that "progress was made" at the meeting, adding: "We are ready to sit down with the Port Authority to hammer out a revised set of agreements."

Earlier this week, the developer's top aide, Janno Lieber, stressed the leverage Silverstein gains by paying high rents.

"In order for us to justify letting the Port keep the $2 billion they have collected from us and continuing to pay many millions more in rent moving forward, we are asking for their assistance in backstopping our financing," Lieber said.

While the Port Authority signed an "iron-clad" lease for 600,000 square feet in one new Silverstein building, Tower 4, the developer has the option of leasing the same amount of space to the city, a source familiar with the issues said. But the city's below-market rate gives the developer less incentive to do so, though this option could also become a bargaining tool.

Bloomberg added that each stakeholder will now appoint someone to negotiate for them in private before the officials meet again on June 11. If a deal is close, but not done by then, "I wouldn't have any qualms in looking you in the eye ... and taking another couple of days," he said.

(Reporting by Joan Gralla; Editing by Jan Paschal)