Gov. Pataki Seeking $54 Billion to Rebuild WTC Site, Help NYC Economy

October 10, 2001

New York’s Governor George Pataki unveiled a plan which calls on the Federal Government to provide $34 billion rebuild the the World Trade Center and the area around it, and an additional $20 billion in funds to stimulate New York City’s economy, which has suffered heavily since the September 11 attacks.

The funds would be used to rebuild and repair structures damaged in the disaster, to repair infrastructure, including subway and rail line tunnels, and to rehabilitate the damaged area. Economic aid would focus on small business, transport systems and security services, all aimed at boosting employment.

Mayor Giuliani echoed Pataki’s call for government help, pointing out that the city has lost more than 100,000 jobs both as a direct result of the attack and as a result of the sharp economic downturn in the city which followed it. He announced budget cuts of up to 15 percent in all city departments, except schools and fire services.

Whether any such assistance will affect outstanding insurance claims has yet to be determined, but as the estimated loss estimates continue to grow, it seems likely that some forms of assistance will be extended to the insurance community.

A good illustration of the type of problems the industry will increasingly face is the current dispute between Silverman Properties, the master leaseholder of the World Trade Center buildings, and the insurance carriers on the property who are being represented by the American Insurance Association. Silverman claims that each airline crash was a separate event, entitling it to recover the losses from each building, an estimated $7.2 billion, while the insurers claim that the event was one coordinated attack, which would entitle Silverman to recover only for the loss of one building at around $3.6 billion.

Pataki’s proposal reflects the urgent necessity of resolving this and similar problems, as well as finding the funds to rebuild the damaged areas of lower Manhattan, and reestablish the businesses located there.

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