Slick Silverstein

From the Real Deal:

Last month, Silverstein Properties’ ground lease for Queensboro Farm Products’ seven-lot development site in Astoria, Queens hit public records. However, it turns out that’s only a piece of a larger assemblage: Queensboro is just one of four landlords Silverstein is working with who collectively own 315,000 square feet of ground. Together, all the sites could give rise to nearly 4,000 apartments.

The overhaul wasn’t originally Silverstein’s idea, but that of a pair of developers who struggled for years to bring an ambitious plan they dubbed “Steinway Square” to life. Now, Henry Wollman of Quadriad Realty Partners and investor Robert Gans, who is perhaps best known for owning strip clubs, are suing Silverstein and the Astoria landlords, alleging the developer squeezed them out of their dream project.

Port Authority as real estate speculators

From the NY Times:

The developer and philanthropist Larry A. Silverstein has cut a striking figure in New York City. He owns the H.M.S. Bounty-size yacht favored by his peers and has dominated the rebuilding of ground zero for a decade.

Along the way, he has internalized a developer’s rule of thumb in New York: Only a rube puts much of his own money at risk.

Billions of dollars in Liberty bonds, insurance money, developer fees: Year after year, Mr. Silverstein has shaken the public tree and benefits have fallen to the ground.

Construction of 4 World Trade Center is completed and it stands about half empty, with commitments from just two tenants: New York City and State. Now Mr. Silverstein wants to complete his 70-something-story 3 World Trade Center. He has found just one prospective tenant for it.

City and state officials, ever helpful, agreed to give that company, GroupM, a $15 million cash subsidy and tax breaks worth about $75 million.

Now Mr. Silverstein wants to shake the tree again. In March, as Charles V. Bagli reported in The New York Times, he asked the Port Authority of New York and New Jersey to guarantee up to $1.2 billion of his construction loans. The authority’s board could vote on the proposal this month.

As chutzpah, this was impressive. As public policy, it was less salutary.

Kenneth Lipper is a board member of the Port Authority, a former deputy mayor under Edward I. Koch, an investment banker and a novelist with a keen eye for currents of power, municipal and financial.

In an interview on Monday, he described how the board had signed off this winter on a capital plan, carefully assigning priority to rebuilt bridges, a new terminal at La Guardia Airport and — Mr. Lipper’s personal favorite — the rebuilding of that corroding pile of metal and concrete that is the Port Authority bus station in Midtown.

Then Mr. Lipper saw the request from Mr. Silverstein.

“Am I in ‘Alice in Wonderland’?” he recalled thinking. “I wanted to get a modern bus terminal built and we’re talking about putting $1.2 billion into a private developer, in which he gets the gain and we take the hit?

“Is it the role of an agency representing taxpayers and toll payers to speculate in real estate?”

EDC suspiciously violating the sunshine law

From the Queens Tribune:

New York City’s Economic Development Corporation has not yet disclosed the names of developers seeking to transform the auto repair shop oasis that is Willets Point, infuriating its opposition, Willets Point United.

This year EDC will reward a contract to a private developer to turn the 62-acre Iron Triangle into what some hope will be a hub of commercial activity; the most ardent supporters of the development dream that the cratered streets that wend among the dizzying number of repair shops, scrap yards and waste processing sites will be swapped for retail outlets, hotels and perhaps a convention center. EDC denied WPU’s Freedom of Information Law request for names of the developers, though the deadline for proposals to be submitted was Sept. 9, 2011.

“It’s important to disclose the names of the developers because EDC clearly cannot be held to its word,” a spokesperson for WPU said. “The need for transparency is paramount.”

Those who answered EDC’s request for proposals should be known to the public, WPU argues, because EDC itself is a public corporation. An EDC spokeswoman, Jennifer Friedberg, said the EDC is still negotiating with respondents. According to a 2011 report in Crain’s Business New York, a source disclosed four of the developers that had submitted proposals for Phase 1. They are The Related Companies, Silverstein Properties, mega-REIT AvalonBay Communities Inc., and TDC Development & Construction Corp. Related has partnered with Sterling Equities, the real estate firm controlled by Mets owners Fred Wilpon and Saul Katz.

EDC, however, will not confirm any of the names, and since the deadline has passed for applicants to respond, there is no good reason for the names to be kept from the public, said Robert Freeman, executive director of the New York State Committee on Open Government.

“The developers are on equal footing if the deadline is reached,” Freeman said. “I don’t see any conceivable basis for withholding these names.”

3 WTC may not rise that high

From the Daily News:

A soaring skyscraper planned for the World Trade Center site may shrink to a measley seven stories.

Developer Larry Silverstein’s 3 World Trade Center office tower was supposed to rise to 80 stories — but he’s planning to turn the tower into a teeny low-rise if he can’t find a big-time tenant, Crain’s New York reported.

The building is under construction and was supposed to be done by 2015, but Silverstein has had no luck landing a major company to fill the office space — and tweaks have already been made to allow the tower to be capped by the end of the year at less than a tenth of its intended size.

The stunted tower would be filled up with retail stores, according to Crain’s.

New Yorkers around the site Sunday said it would be an embarrassment if the site couldn’t support a building of suitable stature.

Does this stink or what?

From Crains:

Two of the area's most powerful developers and a real estate firm controlled by the owners of the Mets are among the firms that submitted proposals for the right to redevelop Willets Point, real estate and political sources said.

The Related Companies has teamed up with Sterling Equities, which is controlled by Mets owners Fred Wilpon and Saul Katz, to submit a proposal to redevelop the 12.75 acres included in the project's first phase, the sources said. Silverstein Properties, which is building three towers at the World Trade Center site, also threw its hat into the ring. None of the firms would comment. A real estate source said Sterling had teamed up on bids with more than one firm.

The Queens-based Times Ledger reported last month that Flushing-based TDC Development also made a bid.

City officials would not say how many proposals they received by last month's deadline, but indicated they were satisfied with the quantity and quality of the submissions. Twenty-nine firms were eligible to submit bids, based on an earlier qualifying round. Among those firms, the Westfield Group, the Richman Group of New York, Edward J. Minskoff Equities and Hamlin Ventures confirmed they did not submit bids.

“After receiving multiple responses for the first phase of development, we are another step closer to the new Willets Point,” a spokeswoman for the city's Economic Development Corp. said.

Hey remember when I told you about Wilpon's windfall 2 years ago? He already has dibs on taxpayer-owned lots B and D without having had to submit an RFP, but he wants Willets Point as well? He should be happy he survived Ponzi schemes, bankruptcy and having to sell off part of the team.

"Sterling had teamed up on bids with more than one firm"... I bet they did.

Union strike may grind building to a halt

From Crains:

With a contract deadline a week away, a survey of developers has found that a work stoppage by operating engineers could silence construction on private-sector projects worth nearly $10 billion and temporarily idle more than 11,300 workers.

With the operating engineers' union contracts set to expire June 30, the Real Estate Board of New York survey shows that work could stop on commercial and retail projects spanning more than 13 million square feet and on residential sites totaling more than 6,300 units.

Projects that could be halted include Forest City Ratner's Barclays Center in Brooklyn, which employs 1,000 construction workers; Silverstein Properties' World Trade Center Tower 4, which employs 800; and Extell Development Co.'s International Gem Tower in midtown, which employs 500.

WTC costs a lot more than expected

From the NY Post:

Developer Larry Silverstein has exercised an option negotiated five years ago requiring the city to rent 582,000 square feet in the second tower going up at the World Trade Center site, The Post has learned.

That's put the Bloomberg Administration in a funny position.

It's now got to make plans to occupy what will be some of the priciest real estate in Lower Manhattan, while it downsizes the government and gets rid of 400,000 square feet of unused office space elsewhere.

Under the deal struck in 2006, the city will pay Silverstein $56.50 a square foot when the building known as Tower 4 is ready for occupancy in late 2013.

From the NY Post:

The chronically over-budget transportation hub that's part of the massive Ground Zero rebuild will eat into even more taxpayer dollars than expected -- for the second time.

Port Authority officials yesterday hiked the cost of the ornate transit center -- which will house stations for PATH trains, 13 MTA subway lines, and a proposed JFK rail link -- by a staggering $180 million.

The change will bring the overall cost to $3.44 billion.

In 2006, officials put an estimate for the Santiago Calatrava-designed site, which would be the third-largest transportation hub in the city, at about $2.2 billion.

In 2008, that price tag went up to $3.26 billion.

Two Manhattan megaprojects still delayed

From the NY Observer:

For the second time in three months, and the fourth time in a year and a half, the anticipated contract for the Related Companies to develop the 26-acre West Side rail yards has been delayed. Related and the M.T.A., which owns the rail yards near the Javits Center and initially granted Related the development rights in May 2008, have agreed to extend by one month a March 31 deadline for signing the contract to develop the site. An M.T.A. spokesman confirmed the extension.

Multiple people familiar with the discussions said that the process of readying the legal documents has dragged on, taking longer than expected.

From the NY Times:

The news on Thursday that the Port Authority and the developer Larry A. Silverstein had ceased hostilities and come to a tentative agreement at ground zero was greeted with a great deal of fanfare. But judging from a blistering note the next morning from the Port Authority’s vice chairman, the next 120 days are going to be anything but peaceful.

The vice chairman, Henry R. Silverman, said in an e-mail message that the final deal allowing Mr. Silverstein to build two skyscrapers at ground zero with up to $1.6 billion in public subsidies cannot leave the developer flush with cash and the authority at financial risk.

“The notion that a private developer and/or his investors profit while the public sector is at risk for billions of dollars is unacceptable,” he wrote to the authority’s executive director, Christopher O. Ward, and eight fellow commissioners.

Only 17 hours earlier, Mayor Michael R. Bloomberg, Gov. David A. Paterson and various labor leaders lauded the announcement that the two sides would spend the next three months putting their rough outline of a deal into formal documents.

But clearly the commissioners are worried. The Port Authority of New York and New Jersey is already building 1 World Trade Center, a $3 billion tower at the northwest corner of the site, which also needs tenants, as well as a $3.2 billion transit center and the national memorial.

Iconic tower nixed from WTC plan

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.

Arbitrators rule against Silverstein

From the NY Times:

An arbitration panel has ruled against the developer Larry Silverstein on a series of critical issues involving the construction of three office towers at ground zero, including his request for free rent and, potentially, billions of dollars in damages from the Port Authority of New York and New Jersey, which owns the 16-acre site.

The panel, which is seeking to break a 14-month deadlock between the developer and the Port Authority, issued its decision Tuesday evening, giving both sides 45 days to come up with a new schedule for erecting the three buildings or risk having the arbitrators impose their own solution. The dispute, which has embroiled Mayor Michael R. Bloomberg and the governors of New York and New Jersey, has threatened to undermine the progress of other projects at the World Trade Center site.

The panel, at Mr. Silverstein’s request, did eliminate the “cross default” provision of the development agreement that would have put him in default on all three towers if he failed to meet the construction schedules for any one building.

World Trade Center gets more expensive

From the Daily News:

Taxpayers will have to cough up another $20 million for Ground Zero because of the brutal battle raging between the Port Authority and developer Larry Silverstein.

The agency's board voted on Thursday to pay 14 different consultants to plan and design new blueprints for the World Trade Center site that would scrap two of the builder's iconic towers.

Known as "Plan B," the redesign was ordered two months ago by Gov. Paterson as a way to ensure that public projects on the 16-acre site would still rise if Silverstein withdraws or is booted from downtown.

The seemingly intractable mess between the developer and the PA over what gets built when and who pays for it is now being reviewed by an independent panel that is expected to act later this year.