He woke up obscure on the morning of Sept. 11. Just a few

weeks before, the diminutive, 70-year-old developer had completed the deal of

his life, leading a group of investors in the $3.2 billion purchase of a

99-year lease on the World Trade

Center. Respected within the

insular world of New York real estate,

he remained little known in the world at large.

That all changed the moment the Trade

Center towers-the complex Mr.

Silverstein called "my dream"-collapsed.

Suddenly, the developer was thrust into an unaccustomed

public role as New York's

rebuilder. On television, he vowed to reconstruct the complex. In the

newspapers, he proposed four 50-story towers. In a state of emergency, he was

hailed as an example of New York's

can-do spirit.

"Should we rebuild the World

Trade Center,

the symbol of New York? Absolutely. Without a hesitation," a choked-up Mr.

Silverstein declared in a speech to business leaders at the Regency Hotel on

Sept. 17, bringing the crowd to its feet. "Because to do

anything less would be to simply give an incredible victory to those who sought

to destroy our way of life."

Now that the cheers have faded, the enormity of the

rebuilding job is becoming clear. In boardroom negotiations and back-channel

conversations, the crucial first question-who calls

the shots?-is coming closer to being resolved. And Mr. Silverstein's likely

role is becoming ever more clouded.

"I think he will be very involved," said Lewis Eisenberg,

chairman of the Port Authority of New York and New Jersey's

board of commissioners, which built the World

Trade Center

and still owns the land beneath the rubble. "I don't know in what particular

role at this point."

Mr. Silverstein has talked to another prominent developer,

John Zuccotti of Brookfield Financial Properties, about

designing a master plan that

integrates the World Trade

Center site into Brookfield's

World Financial

Center and Battery

Park City.

"We think we should begin by reconsidering the role of lower Manhattan

in the region," said Mr. Zuccotti.

But the reality is, a little more than a month after the

terrorist attack, Mr. Silverstein is in trouble. He faces a cash crunch, a

multibillion-dollar fight with his insurers and tentative signals from Port

Authority officials at the precise moment he needs to move fast.

Real-estate executives who applauded Mr. Silverstein a month

ago now wonder whether he can hold onto the 16-acre site. Yet in an interview

at his Fifth Avenue office

on Oct. 12, Mr. Silverstein portrayed all these concerns as mere challenges to

overcome. "We paid for [the World Trade

Center]," Mr. Silverstein said.

"We're doing what we have to do because we have a huge investment in this

thing. And as long as we have the cooperation and the wherewithal to rebuild,

that's what we're intent on doing."

Neither element-cooperation or wherewithal-is a foregone

conclusion. While Mr. Eisenberg praised Mr. Silverstein as "a man of great

conscience and wisdom," he and other Port Authority officials made it

abundantly clear that they expect to lead, and not simply follow Mr.

Silverstein.

"I don't know the basis from which [Silverstein] is

speaking," said Port Authority commissioner William Martini, a former New

Jersey Congressman. "Last I heard, the [land] is still

titled to the Port Authority."

"I can't do this alone," Mr. Silverstein acknowledged. "I

can only do it with the government on the federal, state and city level, with

the Port Authority being a total participant."

Mr. Eisenberg said that the Port Authority is making close

study of the site-and Mr. Silverstein's legal rights to it.

"In some ways, it's analogous to 1965," when the World

Trade Center

was begun, said Mr. Martini. "Which entity is best positioned to lead [the

redevelopment]? It's the Port Authority."

Money, too, is becoming a problem for Mr. Silverstein. He

still has to pay rent to the Port Authority as if the World

Trade Center

still existed, full of tenants. For now, he says he is making the

payments-about $2.5 million a week-out of his own pocket. If he defaults on the

payments, he could lose control of the property.

Mr. Silverstein must soon collect at least some of the $7.2

billion in insurance claims he has filed. But his insurers are fighting him. A

long legal battle could turn on a bit of legalism: Mr. Silverstein says that

the assault constituted two distinct terrorist attacks, doubling his $3.6

billion in insurance policies; the insurers say it was one coordinated attack.

Experts call Mr. Silverstein's claim audacious. Why is he

trying it? Perhaps because he thinks $3.6 billion won't be enough. Financial

documents connected to a Trade Center bond issue earlier this year warned that

Mr. Silverstein's casualty insurance policy amounted to "significantly less"

than the cost of rebuilding.

"Is the industry happy about having to pay us $7.2 billion?

The answer is no," Mr. Silverstein said. "[But] without a doubt, we'll get it

resolved."

Appeals to Congress

According to Congressional staff, however, Mr. Silverstein

recently told members of Congress that he needs federal loan guarantees to keep

going while he waits on the insurance payoff. "He was greatly fearful that he

would not be able get that kind of financing without a guarantee," said John

Sheiner, an aide to Representative Charles Rangel, who was present at the

meeting. But Mr. Silverstein dropped the idea when members of Congress voiced doubts.

Despite all these problems, Mr. Silverstein says he is

working on a tight time frame. "The site is going to be cleared, present

schedule, [in] 12 months," he said. "Six months for environmental remediation

and securing the foundations. Eighteen months from today, structural steel can

be coming up out

of the ground. And five years from

today, we can have-and should have-a finished World

Trade Center."

But that schedule could be wildly optimistic in a New

York barreling towards recession. Companies displaced

from the World Trade

Center have found ready space in

buildings emptied by the financial downturn, and any new complex will have to

vie for tenants with a dozen or so development sites at the ready around the

city.

"My sense is that this is going to be a long haul," said

real-estate attorney Lawrence Lipson of Proskauer, Rose.

Among the three finalists in the bidding for the World

Trade Center,

Mr. Silverstein was considered an afterthought, a lone private investor among

big public companies. He rounded up a formidable consortium of investors and

used his patience, charm and wile to prevail. Now he faces a problem like none

any developer has ever seen.

"The impact on lower Manhattan

is devastating; [on] the city, huge; [on] the state, enormous," Mr. Silverstein

said.

Mr. Silverstein added that he narrowly escaped death on

Sept. 11. "The only reason I wasn't there that morning was because of a

doctor's appointment," he said. His firm lost four employees in the disaster.

"It's painful. I'd rather not talk about it. Let's get it behind us," he said,

ending discussion of the disaster with a wave of his hand.

Mr. Silverstein watched the buildings collapse on a

television in his Fifth Avenue

office. He emerged from seclusion soon afterwards, telling The Wall Street

Journal that he planned to rebuild. Since then, he's been moving forward

aggressively. "It costs $2.5 million a week," Mr. Silverstein said. "So when

you're sitting and contemplating the eternal verities, you can do that for 10

minutes, 12 minutes, but then you gotta get on with it."

The plans tentatively call for four 50-story office towers

and a monument honoring the dead. "That's their burial ground, so you need a

memorial," Mr. Silverstein said.

He's already hired prominent architect David Childs, of

Skidmore, Owings and Merrill; urban planner Alex Cooper, who designed Battery

Park City; and a lot of lawyers.

Mr. Silverstein has also been making the rounds around Washington,

accompanied by blue-chip Washington

lobbyists Ed Gillespie and Jack Quinn. In addition to the loan guarantees, he's

asking for legislation shielding him from lawsuits connected to the attack.

Bottom-Line Realities

Mr. Silverstein's alacrity caught many unprepared, including

the Port Authority, which lost 74 employees in the disaster, in addition to its

headquarters building. Yet Mr. Silverstein may have no choice but to move fast.

To keep paying rent to the Port Authority, he must collect at least some

portion of his $1 billion "business interruption" insurance policy. But this insurance

policy, Mr. Silverstein said, only kicks in if he can demonstrate that the

complex will be rebuilt. Even if he collects it, that insurance runs out in

three years.

So Mr. Silverstein needs the Port Authority's cooperation.

"He's going to have to negotiate with the Port Authority," a New

York state official said, adding that Mr. Silverstein

shouldn't put the authority "in a box."

Not surprisingly, the Port Authority and Mr. Silverstein

have differing interpretations of what Mr. Silverstein's rights are under the

arcane provisions of his lease which cover damage to, or the destruction of,

the building.

The problem, said Mr. Lipson-who engaged in lease

negotiations with the Port Authority on behalf of an unsuccessful bidder,

Vornado Realty Trust-is that no one spent much time contemplating the total

destruction of the complex when the lease was written.

"I remember making the comment, '[Terrorists] tried to

destroy the building once unsuccessfully; there's no way the entire building's

going to come down,'" Mr. Lipson said. "You see how stupid I was."

The Port Authority has about $1.5 billion of its own

insurance, which will go to cover damage to the PATH train terminal underneath

the W.T.C. site and other infrastructure. But if Mr. Silverstein defaults on

the lease, the Port Authority stands to collect all his insurance money,

another New York state official

claimed.

Real-estate lawyers and developers said there are reasons

why the Port Authority might not want Mr. Silverstein to develop the site.

"This could be, from start to finish, a 10-year project,"

said one developer. "I think the Port Authority will question his organization,

and question the experience of his partners."

Mr. Silverstein's is a family-run private company. He has

built some buildings-most significantly 7 World Trade Center, which was also

destroyed in the attack-but nothing like the four-building complex he is now

proposing. His partners, which include members of the Goldman real-

estate family and real-estate

investor Joe Cayre, signed on to invest in buildings, and some speculate that

they may not want to be involved in a development project.

Philip Rosen, who represented Mr. Goldman on the deal, said

that the rest of the partners were fully behind Mr. Silverstein. "They're

investors, but they're also developers," he said.

No single developer has tried to complete a project of such

scale in New York since the

1980's, when George Klein attempted to build four office towers in Times

Square. That project went awry amid political squabbling and Mr.

Klein's financial setbacks.

Many suggest that the formula that eventually worked in Times

Square-parceling out buildings to several different

developers-might be the model for the World

Trade Center

site.

Mr. Silverstein indicated he would be resistant to such an

idea. "As I recall, 42nd Street

took I don't know how many years to get done," he said. "If we were to go for

10 or 12 or 14 years … or bring in different people, then I gotta tell

you-we're going to be out of money before we start."

Some involved in the World

Trade Center

lease deal suggested that the Port Authority might try to buy out Mr.

Silverstein's interest in the complex. "The most likely outcome, in my view,"

said one real-estate attorney who has made a close study of the deal, "is that

the Port Authority will say, 'Larry, we love you, you're a great guy, but we

want to do something new.'"

But another attorney who is close to the ownership group

said the partners would resist any buy-out. "I think that that would lead to

years of fighting," he said. "I think that the best scenario is that everyone

sits in a room, locks the door and figures out what to do with the site."

Mr. Silverstein said he's in it for the long haul.

"I've simply decided the next five years of my life are

going to be dedicated to getting this rebuilt," he said. "Because

emotionally, I find it necessary to do it … [and] because, God only knows, the

economy of this city-the economy of the state-is dependent upon our doing so."