From the Daily News:
An iconic 79-story skyscraper long planned for Ground Zero that would have been taller than the Empire State Building appears to be dead.
Developer Larry Silverstein has proposed a new financing scheme for the troubled site that discards the 1,270-foot Tower 2, sources familiar with the project say. In the past two weeks, he has come under intense pressure from Gov. Paterson to resolve his bitter war with the Port Authority.
Acting after Silverstein was slapped down last month in his bid to snag $3.5 billion in penalties from the PA because of building delays, Paterson urged him to throw more cash into the project and scale back his demands.
Silverstein agreed and is offering to put as much as $250 million into his two remaining Church St. buildings - $175 million more than his last offer - and add $560 million from insurance and Liberty Bonds as well. To further reduce costs, he said he would push ahead with the 71story, 1,137-foot Tower 3 - but dump Tower 2, a projected 2.3 million-square-foot building designed by star architect Lord Norman Foster.