“We rebuilt, we resolved, we learned, and we keep learning.”
SCOTT H. RECHLER Port Authority Board Member, 2014
In August 2010, the Port Authority and Silverstein Properties negotiated a deal that allowed the immediate construction of the tower’s podium, which was needed to accommodate the Transportation Hub’s mechanical systems and other critical infrastructure. Under that agreement, the onus of securing private financing of more than $1.6 billion and finding a tenant to occupy at least 400,000 square feet (37,161.2 m2) of space fell to Silverstein. Once he obtained these private-sector contributions, $600 million in public-sector support from the City and State of New York and the Port Authority would be released for construction and backstop support. Construction then stopped, however, while the Port Authority and Silverstein hammered out how the rest of the building would be paid for. These contentious, highly publicized negotiations took years to conclude.
Then, in December 2013, the media firm GroupM inked a twenty-year lease for nine floors, meeting one of the conditions of the 2010 agreement. Once the building is completed, the firm will move 2,400 employees downtown from midtown. All parties agreed that GroupM’s move, the largest tenant relocation in the city in 2013, was a good thing, continuing the leasing surge downtown. However, in light of the changing real estate market, with commercial lending volume down, Silverstein was unable to meet the remaining conditions of the agreement. To move forward, he wanted to restructure the agreement, asking the authority to increase its support from $190 million to $1.2 billion. With little leasing activity at One and Four World Trade Center, the Port Authority was faced with a difficult decision: stick with the 2010 agreement and lose a significant tenant in GroupM, slowing overall momentum at the site, or restructure the agreement so construction of Three could proceed.
Fanned by the press, which portrayed the developer as looking for yet another handout, Silverstein’s request polarized opinions, including those of the eleven members of the Port Authority Board of Commissioners. Proponents of a new deal contended that completing Three World Trade Center was essential to the fortunes of still-fragile lower Manhattan, and one that would ultimately get the Port Authority back to its core mission of regional transportation; the only way to get out of the real estate business, they reasoned, was to have something to sell. Completing Three would also create thousands of jobs and secure new office tenants that would yield future income for the authority. Failure to complete the skyscraper would also wipe out tens of thousands of square feet of retail commitments, which Westfield controlled, depriving the authority of still other income. Critics argued that it made no sense to subsidize a building that would compete for tenants with other nearby buildings, including One World Trade Center, which, at the time, was about half leased. Disgruntled commuters believed that the authority should spend its money on repairing its bus, rail, and airport terminals. Board member Kenneth Lipper agreed, saying, “We are triaging necessary transportation improvements to finance what will be an empty building.” The public also weighed in at the board’s meetings, with commentaries that ranged from vitriolic denunciations of both agency and developer to pleas on behalf of the union laborers who depended on the site for their livelihoods. Janno Lieber, Silverstein’s project director at the World Trade Center, regularly attended these meetings. He said that demonizing his organization had “become routine,” and that “a lot of what you hear month after month is akin to the sightings of the Loch Ness monster, because the truth is that Silverstein had received after the court battles $4.5 billion and has given $3 billion of that to the Port Authority and the balance has gone into building the buildings. So let us be clear. There is no mystery about where the money has gone.”
To appeal to New Yorkers, who traditionally prefer shopping at street level, three floors of shops are easily visible and accessible from the sidewalk; two additional retail levels are below ground. There is in-building access to eleven subway lines and the PATH train, a boon in bad weather.
With the agency’s board divided and the public-private hybrid agreement still in its infancy, the decision on Silverstein’s request was postponed three times. Scott H. Rechler, a real estate executive and then acting chairman of the Port Authority’s board, led the board’s efforts to choose between two options: provide a loan guarantee for up to $1.2 billion of financing and in return receive hundreds of millions of dollars in new revenue for the cash-strapped agency, or pursue a public-private hybrid that modified the 2010 agreement but limited the Port Authority’s exposure. Opponents argued that it was foolhardy to subsidize the tower when there was a glut of office space. Rechler disagreed, saying that 2014 saw the “biggest recovery of lower Manhattan in over a decade in terms of the velocity of activity—almost four million square feet [371,612.2 m2] of space was leased and two million absorbed, meaning vacant space taken off the market.” Silverstein was more succinct: “Glut ain’t the case. It’s a fiction, not a reality.” Moreover, Silverstein pointed out that he was not asking for a subsidy but for a guarantee of debt for $1.2 billion, half the cost of building the tower. Of the octogenarian developer’s drive to complete the building, the Port Authority’s executive director Patrick Foye said, “Relentlessness is the first characteristic required for success.”
Throughout its hundred-year history, the Port Authority has made many of its decisions, especially controversial determinations such as those on Three World Trade Center, under a veil of anonymity in closed executive sessions. Many of its commissioners believed it was time to exercise greater transparency. Consequently, when the board met in June 2014, Rechler did something that, if not unprecedented, was nonetheless extraordinary: he asked each commissioner to vote publicly on the Silverstein matter. A video documenting this vote, and the discussion that attended it, is available online in its entirety. The agency and Silverstein finally reached an agreement on June 25, 2014. The Port Authority agreed to modify the 2010 agreement, releasing to Silverstein $159 million in insurance proceeds and making available up to $80 million that had been committed previously for construction overruns. In return, Silverstein would take back two of the fifteen floors that the authority had leased at Four World Trade Center. Silverstein said he would seek $1.3 billion in private financing and “immediately jump-start vertical construction.” True to form, Silverstein began building the remainder of Three the very next day.
Later, Rechler wrote a gutsy article about the deal struck at Three, which he believed signaled a shift in the way the agency conducted its business. No more rubber-stamped deals made behind closed doors. Instead, the Port Authority could craft the best possible outcomes for itself and the region by becoming more open and soliciting input from the board and the public. Months of open debate at the Port Authority concluded with an agreement that struck a balance between the agency’s public- and private-sector commitments. The process that led up to it provided the opportunity to show that it was, in Rechler’s words, a “new day at the Port Authority and, similarly, a new day down at the Trade Center.”
TWO WORLD TRADE CENTER
Two World Trade Center, designed by Bjarke Ingels Group (BIG), is a stack of seven massive glass cubes that morph and step in as they ascend—an ambitious skyscraper that looks wildly inventive from some angles, yet demure from others. BIG’s founder, Bjarke Ingels, described the arrangement as “a vertical village of bespoke buildings within the building,” one that can be tailored to various uses. When completed in 2020, the asymmetrical tower will stand 1,340 feet (408.4 m) tall and complete the spiral of four skyscrapers that encircle the 9/11 Memorial.
BIG’s tower will be built atop a foundation designed by Foster + Partners, the original architects chosen by Larry Silverstein in 2005, when Ground Zero was still in flux. One deduces that Silverstein selected Foster, Rogers, and Maki, a trio of Pritzker laureates, for their flawless track records. And rightly so—there was too much at stake, and too much that remained unknown, to take a chance on a young architect like Ingels.
Fast forward ten years to a Trade Center aloft with glittering towers, tenants, and tourists. Even the announcement that BIG would design Two was a clear sign that this was not business as usual—the news broke on WIRED, a technology blog, rather than in an architectural publication. It was accompanied by a full social-media press that included a three-minute video set to Tchaikovsky and featuring Disney-like touches. In the video, Ingels, with the flick of a finger, draws an outline of a Tribeca warehouse that is seven stories tall. A snap of the fingers, and, voilà, seven cubes waft down and form an eighty-story tower. He makes it look so easy. And that, after fifteen years of laborious progress at the Trade Center, is good news.
Two’s design melds the idealism of Daniel Libeskind with the pragmatism of David Childs—and takes advantage of the passage of time. Had it been released in 2005, Ingels’s design might not have survived. But as the last of the towers to be erected, it benefits from the trials of those that came before it. What starts out as a grand and uncompromising set of ideas, of course, can become a substantially different reality once it is built. However, the exuberant tower is a bellwether for just how much has changed and will continue to change downtown.
When BIG’s design was revealed, Two was little more than the collection of silvery air ducts and other mechanical systems that it houses on behalf of the Transportation Hub. The foundations had been built to accommodate the site’s shared infrastructure, but further construction languished after the 2008 recession. Once Two’s anchor tenants, Rupert Murdoch’s 21st Century Fox and News Corp, signed on, they chose BIG to design spaces that would deliver the large broadcast studios and newsrooms they required. The change in use from financial services to media was ostensibly the reason Foster’s design—which many considered the finest of the Trade Center buildings—was bumped.
Still, Silverstein was cautious about embracing Ingels’s design. “My first reaction, my second reaction, and my third reaction were: ‘Will this work?’” he said. But there was little doubt that the developer would approve Murdoch’s selection of Ingels, which would cement Silverstein’s legacy at the site and bring the rebuilding to a close. The deal also signaled a shift in how skyscrapers are designed: the tenant specified the spaces, which shaped the building, instead of making do with an existing design.
