Insurance companies are threatening the construction schedule for the symbolic Freedom Tower at ground zero, the World Trade Center site’s developer told state lawmakers concerned about the pace of rebuilding.
Insurance companies that control billions of dollars in rebuilding funds recently indicated they might not continue to dole out monthly payments after a new deal between developer Larry Silverstein and the government agency that owns the site, Silverstein testified last week at a state Assembly committee hearing.
Without the insurers’ funds, Silverstein said, “the World Trade Center cannot be rebuilt.”
Kenneth Ringler, the executive director of the Port Authority of New York and New Jersey, which owns the site, said he had written insurers but “we don’t believe there’s an issue there.”
Silverstein has been using $4.6 billion in awarded insurance proceeds to pay rent for rebuilding rights at ground zero and to build the 1,776-foot Freedom Tower, which began construction last month. Insurers still are challenging court rulings awarding the proceeds.
Swiss Reinsurance Co., which provides the largest share of insurance for the trade center, “will continue to honor our obligations under the terms of our coverage,” the company said.
And on his weekly radio show, Mayor Michael Bloomberg downplayed the issue, saying “there are technical things you have to do to get the money, but I think it’ll all be worked out.”
Lawmakers questioned why no office towers had risen at ground zero nearly five years after terrorists destroyed the twin towers.
“We’ve had a number of groundbeakings, and we are still battling with the insurance companies to see if we’re going to have enough cash,” Assemblyman Richard Brodsky said.
But rebuilding officials all said the agreement reached last month between Silverstein and the Port Authority will speed up the timetable to build five office towers at the 16-acre lower Manhattan site and ensure the project, including a Sept. 11 memorial, will be built by 2012.
Officials also acknowledged, however, that the agreement isn’t final and depends upon government commitments that haven’t been reached yet to lease hundreds of thousands of square feet of office space at ground zero.
The new deal divides rebuilding money and the responsibility for building office towers between Silverstein and the Port Authority. Officials broke ground last month for a second time on the Freedom Tower. The cornerstone for the building first was laid in 2004, before security concerns forced a redesign.
“This was, I believe, a real groundbreaking this time,” said Daniel Doctoroff, deputy mayor for economic development and rebuilding.
Charles Gargano, vice chairman of the Port Authority, said the only delays at the site involve the Freedom Tower, for safety reasons.
“We’re talking about a building that’ll be here for more than 100 years,” Gargano said. “If there’s a delay, I say so be it. Let’s do it the right way.”
Lawmakers also questioned design plans for the memorial, which is being redesigned to cut its $1 billion budget in half. Gargano said there were no plans to change the “artistic design” of the memorial, which would create two reflecting pools to mark the fallen twin towers.
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