What's Behind the Ground Zero Stalemate

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Last week, The Port Authority of New York and New Jersey and real estate developer Larry Silverstein restarted the on-again off-again negotiations over control of Ground Zero. The last round ended a couple of weeks before with the future of the new World Trade Center still in limbo and the planned April groundbreaking for the so-called Freedom Tower still in doubt. For four and half years now, the debate over Ground Zero has always been colorful — with "greedy" the preferred insult thrown around — but it hasn't been easy to keep up with all the legal, political and economic minutiae. So here is why, almost five years after the worst terror attack ever on American soil, there's still a 16 acre hole in the ground.

What is the new World Trade Center supposed to look like?

The masterplan features five towers that together comprise 11.7 million square feet of office space and 600,000 square feet slated for retail. The centerpiece is supposed to be the 1,776-ft. Freedom Tower, estimated to cost $2.3 billion. But beyond the specifics, the WTC is supposed to invigorate New York's downtown real estate market. A new commuter train station, with a well-received design by Santiago Calatrava, is under construction, and New York Governor George Pataki has proposed a second commuter rail from JFK international airport.

Who politically is in charge of this situation?

In truth, Pataki. Technically, it's the Port Authority of New York and New Jersey that literally owns Ground Zero. But the Port Authority's board is controlled by the governors of New York and New Jersey, and Pataki has been the frontman for the World Trade Center's reconstruction. Still, thanks to his lease on the site, Silverstein himself holds the most important card of all.

Wasn't it supposed to be finished already?

Well, not exactly. As late as 2004, Pataki was promising that the Freedom Tower would be done by September 11, 2006, just in time for the five year anniversary. Shortly thereafter the entire blueprint for the Freedom Tower had to be redone, after New York's police department said it was not sufficiently secure from any potential future terrorist attack.

Furthermore, Silverstein and Pataki never completely saw eye to eye on the master plan, disagreeing on such issues as the choice of architect. The architect Daniel Libeskind, whom Pataki favored, won the commission to plan the entire site and design the Freedom Tower. But Silverstein came forward with his own architect, David Childs. The current design for the tower is the result of a forced marriage of Libeskind and Child's ideas.

So what's holding up things now?

In one word, not surprisingly, money. Silverstein had the fortune, or misfortune perhaps, of acquiring a 99-year lease on the World Trade Center site, mere months before 9/11. The lease says that Silverstein has to rebuild, but state and city officials are increasingly skeptical that he can fulfill the massive $7 billion project, especially since the insurance money to cover it amounts to just under $3 billion.

Port Authority officials would like Silverstein to give up some portion of the project, in particular the Freedom Tower, while Silverstein would retain the choice sites for the three most lucrative towers, but the haggling has continued over, among other matters, how much of the infrastructure costs he would have to bear and how much rent he will have to pay. Silverstein is also reportedly holding out for a $100 million "developers fee."

But why doesn't Pataki just boot Silverstein out the way?

That's easier said than done. Removing Silverstein would mean a protracted legal fight that would likely only push back the already delayed finish date for the WTC. At least some members of the Port Authority commission would prefer to buy the entire project back, though Silverstein would surely drive a very hard bargain. For now both sides are back at the table, and the Freedom Tower's completion date has been pushed back to 2011.

Are there other problems?

Unfortunately yes. Fundraising for the World Trade Center memorial has been slower than expected, and New Jersey Governor Jon Corzine has even insisted that Silverstein contribute some memorial funds as part of any deal. Meanwhile, concern over the nature of historical exhibitions has helped delay plans for a cultural "freedom" center adjacent to the memorial.