Developer Larry Silverstein is said to have offered a way to to build and pay for a facility in back of the Port Authority Bus Terminal. Guess what’s in it for him.
On Tuesday, Port Authority of New York and New Jersey Executive Director Patrick Foye told a Crain’s Breakfast Forum about an idea proposed by developer Larry Silverstein to build and pay for a much-needed Manhattan bus garage. Mr. Foye called it “interesting, provocative,” but he offered no details.
A source said the idea, floated during last year’s leadership transition at the Port Authority from Christopher Ward to Mr. Foye, involves developing a site on West 39th Street and Dyer Avenue used most recently by Mercedes-Benz by the service road that funnels traffic to and from the Lincoln Tunnel just southwest of the Port Authority Bus Terminal.
Mr. Silverstein, who has a long-term letter of intent with the owner to develop that building, proposed constructing a bus garage capped by a residential tower.
Unanswered questions include how big the tower would have to be to generate sufficient income to finance the construction of the garage, and whether anyone would want to live on top of a bus garage in the heavily trafficked area. It also remains to be seen how much the Port Authority would pay.
Certainly, the idea of the Port Authority doing business again with Silverstein Properties presents political hurdles given the two entities’ complex relationship at the World Trade Center site. The developer declined to comment for this article.
On the plus side, a bus garage-cum-residential complex would solve a number of thorny logistical problems for the agency, which abandoned a bus garage development for lack of funds.
Because there’s no room inside the bus station and nowhere else to park, hundreds of New Jersey Transit buses return empty to the Garden State after dropping off morning commuters in Manhattan. They come back to the city to pick up passengers in the afternoon. A bus garage nearby would cut down on trans-Hudson River traffic, reduce air pollution and save money on fuel.
Part of the savings could be used by the Port Authority to lower terminal fees for short-haul intercity buses, including discount carriers that are under fire for using city sidewalks to load and unload passengers. Bus companies that use the terminal have already threatened to leave because they pay millions of dollars in rent and say free curbside parking for their competitors is unfair.
State legislation would actually allow the city to issue permits for private buses to pick up on the sidewalk. A bus garage could open space at the bus station for discount carriers like Megabus.com, which has a permit to use West 41st Street just outside the bus station as a depot.
“You could get more buses into the terminal,” the source said. “But you’d have to ban them from these sidewalk pickups.”
The insider called Mr. Silverstein’s idea “intriguing,” but it may be a pipe dream.
Mr. Foye would say only that he’s looking at fixing the problem. “It’s a serious question under serious review,” he said.
Source
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Christopher Ward, Developer Larry Silverstein, Larry Silverstein, Lincoln Tunnel, Megabus, new jersey transit, Patrick Foye, port authority bus, Port Authority Bus Terminal, Port Authority of New York and New Jersey, Silverstein Properties, transportation, travel, World Trade Center, WTC
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Unable to line up tenants, developer to cap his second Trade Center tower at seventh floor.
Developer Larry Silverstein is planning to halt construction by the end of the year on the second of the two towers he is currently building at the World Trade Center site if he can’t find a major office tenant, sources close to the company said.
Minor modifications have already been made to the ongoing construction of the tower that will allow it to be capped at the seventh floor—73 short of its planned height. Retail tenants would be sought for the seven-story podium.
If Mr. Silverstein finds a tenant before the tower is capped, he can go ahead and complete what will be known as 3 World Trade Center, although there might be some delays, depending on when the deal is struck. The building was slated to be completed in 2015.
Mr. Silverstein is not currently close to signing a tenant, sources said. The building’s cap can be removed and construction can resume after he finds one. Mr. Silverstein’s spokesman declined to comment.
The move to cap the tower stems from a 2010 agreement between the developer and the Port Authority of New York & New Jersey, the site’s owner, to end a long-running feud. Under the deal, Mr. Silverstein has to pre-lease 400,000 square feet in his second tower, line up $300 million of private equity and secure private construction financing in order to qualify for debt guarantees from the Port, the city and the state.
But amid financial tumult in Europe, a weak U.S. economy and a cooling in the city’s office-leasing environment, Mr. Silverstein has been unable to attract a tenant. Experts say his near-term prospects are dim.
“The willingness of large-scale tenants to commit in this environment is limited because companies don’t want to go out and spend a lot of money,” said Peter Hennessy, president of Cassidy Turley’s New York Tristate Region. “It’s not the building; it’s the market.”
Cheaper to stay put
Despite a host of government incentives to lure firms to lower Manhattan, Mr. Hennessy estimates that a 400,000-square-foot tenant would need to spend about $100 million just to outfit an office. Faced with those kinds of costs in a lackluster economy, Mr. Hennessy said, it’s likely that more companies might opt to renew their current leases.
Morgan Stanley, for example, has been searching for months for between 1 million and 1.4 million square feet. Now, sources said, the bank is very close to renewing its lease at 1 New York Plaza and taking some additional space there, which would be a much more cost-effective option.
While other big companies—including Time Warner, News Corp. and Credit Suisse—continue to prowl the market for huge digs, their ranks are thinning. Last year, the number of tenants seeking more than 100,000 square feet tumbled 23%, from 74 to 57, according to Cushman & Wakefield Inc.
To land tenants, Mr. Silverstein faces competition from both existing buildings and other planned state-of-the-art towers. Related Cos. and Oxford Properties Group are seeking tenants for their massive project at the Hudson Yards west of Penn Station, while Brookfield Office Properties wants to lure firms to the 7.4 million-square-foot complex it plans in the same neighborhood. In addition, by the end of next year, as several large tenants move out, Brookfield will have 2.8 million square feet of space available at its World Financial Center—37% of its total—across West Street from Mr. Silverstein’s towers.
Seeing is believing
Sources say Mr. Silverstein’s tower has an advantage over other planned projects for now: Tenants can actually see the start of the building and visit the World Trade Center site. In contrast, except for one building, Related has to build a huge platform over the rail yards before it can start construction, as does Brookfield. That requires tenants with the imagination to envision the finished product and the confidence to take a chance that the neighborhood can be successfully transformed into a premier office market.
In addition, all three landlords are seeking tenants at a time when they are getting more skittish. While overall activity rose 16% last year, the amount of space leased in the second half of the year fell by 31% from the first half of 2011, and was down nearly 10% from the corresponding period in 2010.
Of course, large deals get done even during choppy times. Two months ago, luxury leather-goods maker Coach agreed to be the anchor tenant for a new tower at Hudson Yards. And just last week, publishing giant Condé Nast exercised its option to lease an additional 133,000 square feet at 1 World Trade Center. That will bring the publisher’s total to 1.19 million square feet in that building, which is being developed by the Port Authority and the Durst Organization.
But sources said the Condé Nast deal was heavily subsidized by the Port because it wanted a strong anchor tenant to establish 1 World Trade Center as a premier corporate location. For example, the Port has agreed to assume the last four or five years of Condé Nast’s lease at its current headquarters at 4 Times Square.
Mr. Silverstein has the right to build three office buildings on the World Trade Center site. The first, 4 WTC, is a 72-story building that is due to be completed next year. About 60% of it is leased. Below-ground infrastructure work is being done on the third tower that is expected to end soon, but the building is on hold indefinitely.
David Goldstein, an executive vice president at Studley, said it’s possible that Mr. Silverstein may find a tenant as firms seek to take advantage of the current environment.
“There are lots of opportunities in this market,” said Mr. Goldstein. “And I wouldn’t count Larry out.”
architecture, architecture jobs, buildings, Hiring trends, jobs, modern architecture, new buildings, recession, unemployed architects
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debt guarantees, Larry Silverstein, office leasing, peter hennessy, retail tenants, term prospects, tower line, WTC
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The controversial 52-story skyscraper just north of the World Trade Center has finally been fully leased. Developer Larry Silverstein announced Monday that MSCI, a provider of investment decision support tools, would occupy the remaining floors 47 through 49, the AP.
Bernstein had long had troule attracting tenants in part because Seven World Center came under fire for opening too quickly at the site of the old World Trade Center Building 7 — the last building to collapse in the Sept. 11, 2001 terrorist attacks.
But the site was also the focus of many conspiracy theories, all of which pointed out that Building 7 was the first known building to collapse as a result of uncontrolled fires, and some of which claimed that the U.S. government had been behind the attacks.
The building also cost a pretty penny, with tenants paying the highest prices ever paid downtown — several above $70 a square foot.
Source: The Washington Post
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Larry Silverstein, Seven World Trade Center
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Opens discussions with Westfield, which successfully ran retailing at original trade center; seeks plan for 360,000 square feet of shop and restaurant space that will be built.
In the last few weeks, the Port Authority of New York & New Jersey has started negotiations with The Westfield Group to try to finalize an agreement reached in 2008 to jointly develop the retail space at the World Trade Center site, sources close to the discussions said.
These sources said the Port wants to know by mid-fall if it can seal a deal with Westfield. That would give the agency enough time to either find another partner or move forward by itself in developing a plan for the approximately 360,000 square feet of retail space that will be initially built at the site. Roughly 200,000 square feet of that space is in the Calatrava transit hub, which is slated to open in 2014.
In 2008, the Port Authority and Westfield signed a letter of intent whereby the Port agreed to provide approximately $825 million toward the $1.45 billion project, with Westfield providing the other $625 million. However, that deal was based on projections of about 488,000 square feet of retail space. That total has shrunk, in part because there are no immediate plans to build one of Larry Silverstein’s three towers.
These sources said the two parties were discussing various economic issues but declined to be specific. A spokesman for the Port Authority declined to comment, and a spokeswoman for Australia-based Westfield didn’t return a call. Westfield has interests in and operates one of the world’s largest shopping center portfolios valued in excess of $58 billion with 119 properties in Australia, New Zealand, the United States and the United Kingdom.
Real estate experts said it made sense for the Port to focus on the retail portion of the site now that commercial tenant interest in the buildings is growing. Last month, the Port signed a 1 million-square-foot deal with Cond´ Nast for 1 World Trade Center. Meanwhile, published reports said Swiss financial giant UBS was considering moving into one of Mr. Silverstein’s towers.
Additionally, the Port doesn’t want to lose any significant retail tenants to its neighbor across West Street, the World Financial Center. There, owner Brookfield Office Properties plans a $250 million renovation of the retail space, which is slated to begin in October and run through 2013.
Prior to Sept. 11, 2001, Westfield had net leased the World Trade Center retail components, one of the highest-grossing shopping areas in the nation, which consisted of 427,000 square feet. In December 2003, to accelerate the rebuilding at the World Trade Center site, the Port acquired the retail net lease from Westfield.
Paul Goldberger, Architecture Critic
Question: How do you feel about the progress on One World Trade Center?
Paul Goldberger: I’m disappointed in where things are at Ground Zero right now. I think it’s sad, on the other hand, I do think the people involved are trying reasonably hard, under the circumstances. But there’s really not a great deal of vision there. It begins really right back the morning of September 12th when Governor Pataki, who had the most authority in this situation, made the decision to keep everybody in place who was a player in this situation, the Port Authority, which owned the World Trade Center, the developer, Larry Silverstein, who had leased the Twin Towers. And most importantly, to keep the program in place. The program—by program, I mean the functions of the buildings. So, you know, the World Trade Center was 10 million square feet of office space plus some retail and some other commercial space, that’s what was transferred into the new project with the addition of a memorial and some cultural facilities and the, the prescription that it be in a different physical format, obviously, not 210-story towers again, but spread out around the site in a different way.
But you know, we never really looked into completely different uses for the site. We never really thought from point zero, we might say, about what the ideal thing to do there would be. Instead we took a program that goes back to the original World Trade Center in the early ’60s, and it was never really that effective or successful for most of its life, and decided to replicate it.
And then came all the complex political things that flowed from that, so it’s taken an inordinately long time, it’s cost a huge amount of money, and we still don’t really have anything that I think the world can look at and say, “This is a great achievement that shows us that the United States has come back from this thing in a noble way.” The office building that’s going up is sort of okay, but it’s not, I don’t think going to be a distinguished or particularly beautiful building. It’s not the… it doesn’t show all that we are capable of in terms of architecture.
Similarly, the other office buildings that have been planned for the site, most of which are on hold now because of the economy, are better than the average piece of junk on Third Avenue, that’s true, but that’s not a very ringing endorsement.
And then for this site that is so critical to the eyes of the world, where we had the opportunity to show the world that we could do something that was bold and visionary, we have really not succeeded at doing that.
I think a great tower would have had a place there. Either a pure tower, just as a symbol, like the Eiffel Tower of the 21st Century, we might say. Or, remembering that the United States is, after all, the birthplace of the skyscraper—a building form that we’ve now given to the world that is now common all around the world—what better place, if we’re looking to show the world that in fact we have not been defeated by this attack, than to come back to this place, in this country, in this time and build the most advanced skyscraper we could possibly imagine. The one that will bring the art of skyscraper design forward yet again.
And instead, we are not doing that. We’re doing a building that is not that different from a lot of commercial buildings built everywhere, and in fact, not as good as many of them. It’s going to be very tall, it’ll have a little more flair to it than the old Twin Towers did, but, you know, it’s not what it might have been.
Recorded on June 22, 2010
Interviewed by David Hirschman
architect, architecture, architecture critic, recession
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David Hirschman, Eiffel Tower, Governor Pataki, Ground Zero, Larry Silverstein, One World Trade Center, Paul Goldberger, Port Authority, Twin Towers
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