Port Authority Reasserts Grip On Towers Site

On April 30, city planners and architects gathered at the New York Marriott Financial Center for a final question-and-answer period before the May 6 deadline for applying for the biggest job in the city-and possibly the world: redeveloping the 16-acre site where the World Trade Center once stood.

The cutoff date is less than a month after the Lower Manhattan Development Corporation,a group of city and state appointees who so far have been managing the dialogue about the future of the Trade Center site, issued its first set of guidelines-a “blueprint”-for the redevelopment of lower Manhattan. But in that time, everything appears to have changed.

Since the LMDC’s guidelines were made public, the Port Authority-as owner of the Trade Center land-has come forward to assert that it will make the final determination about what gets built on the 16-acre site.

“It’s our site,” Port Authority director Joseph Seymour told a reporter on April 22.

Mr. Seymour amplified the sentiment of P.A. chairman Jack Sinagra, who told reporters on the same day, “We can’t lose sight of the fact that it’s the Port Authority’s property, and the Port Authority’s responsibility for what is eventually re-created on the site.”

While insiders have long pegged the Port Authority and the Governor’s office as the real players in what gets built downtown, the LMDC has insisted that it has a real role in an “open and inclusive” public process. Said Mr. Seymour: “It’s no secret the Governor wants the LMDC out there to manage the public process and get public input, and the Port will be doing the planning.”

Some insiders say the situation has begun to make the LMDC appear like an election-year tool, with Pataki, the Port Authority and big developers privately making the real decisions that will determine the future of the site. “I’m a little concerned over the way they’ve flexed their muscles,” one LMDC board member told The Observer about the Port Authority. “I expected that to happen after the election.”

“There may be a perception that we’ve given up ground,” said another board member.

As the LMDC continues to muddle through a series of public meetings and listening periods, Mr. Seymour told reporters he’d set a tight deadline for proposals to redevelop the site because “we want to fast-track this.”

As more information emerges about the complex tangle of political, contractual and legal obligations that characterize the Port Authority’s ownership of the site, “re-imagining” it as something substantially different from its predecessor-which has been the main contribution of the LMDC-seems more and more like wishful thinking.

W.T.C. ‘Shoppingtown’?

Even if the relationship between the Port Authority and the LMDC is cordial-as both have repeatedly asserted-the authority’s legal and contractual commitments leave minimal room for public input in the rebuilding. And significant losses related to the downturn in the economy and post–Sept. 11 expenses will make it hard for the Port Authority to justify putting aesthetics above financial concerns when considering proposals for the site’s redevelopment.

Take, for example, the retail redevelopment on the site. In the “blueprint” released by the LMDC on April 9, an item detailed the need to restore “all or a portion of the street grid” that had been interrupted by the World Trade Center and the retail mall at its base.

But that will have to be negotiated with Westfield America-the American subsidiary of an international firm that develops megamalls called “Shoppingtowns” all over the world. Westfield executives signed a 99-year lease alongside Larry Silverstein last July for the 427,000 square feet of retail space lost in the World Trade Center. Like Mr. Silverstein-who has said that his lease obligation implies a right to rebuild and recoup the rentable space he lost when the towers fell-insiders say Westfield is preparing to argue that retail development on the site must address their concerns.

On April 29, at a board meeting in Sydney, Australia, chairman Frank Lowy told the crowd, “We have a long-term lease of the site, and certainly we expect … to be part of that rebuilding process.”

LMDC sources who have been negotiating with Westfield say the company is having a hard time accepting LMDC’s call for a “human-scaled” street-level retail environment, one that replicates lower Manhattan’s “historic core.”

“If you want to do a suburban mall, you want it to be contiguous,” said one source familiar with Westfield’s bargaining position. “And it doesn’t comply with our interest in reasserting the street grid. They’ve accepted Greenwich Street, and I think they’ve accepted Fulton Street.” But that leaves Dey, Cortlandt and Washington streets.

The Port Authority has already tried to satisfy Westfield with underground space: Anthony Cracchiolo, the authority’s director of capital programs, detailed a proposal for one contiguous 427,000-square-foot retail mall that would link up with the Church Street PATH station to be built at the eastern end of the Trade Center site. It would solve the problem of giving Westfield all their space back-if they’re willing to take all that space underground.

“I’m not sure how much of their right they plan to reassert,” a source told The Observer .

The LMDC has also been promoting the idea of a mixed-use development on the site. Port Authority officials have dismissed the proposition in recent weeks, and as several sources at the authority and at the LMDC have since acknowledged, such development by the authority is highly unlikely. Port Authority spokesman Allen Morrison said it is part of the organization’s charter that they cannot develop and manage residential buildings.

In addition to office space, the LMDC blueprint also calls for cultural amenities like museums and high-end retail space to be located on the site. Those are similarly vexing to Port Authority officials, since the authority will ultimately have to pay the price for those niceties. “However that property is ultimately planned, the important thing from the P.A.’s point of view is that we address the need to have a comparable revenue stream,” said Mr. Martini. “I think we’ll depend on a lot of input from a lot of people, so long as everybody understands that somehow the Port Authority has to receive revenues.”

Before Sept. 11, the Port Authority had committed to a $9.6 billion program of capital improvements agency-wide, even as it doles out an estimated $270 million in nonreimbursed costs related to the tragedy. Mounting disappointment related to the overall economic downturn has hit the agency hard, with receipts from tolls and tunnels down sharply, and costs related to new security measures expected to cost the authority $120 million this year alone. Rebuilding the PATH line into lower Manhattan is expected to cost more than $500 million.

Lost Lives, Leadership

Several sources pegged the Port Authority’s aggressive position to the tremendous transformation the organization has undergone since Sept. 11, when it lost 75 employees-including its director, Neil Levin, and its headquarters in the World Trade Center. Many employees-about 2,000-escaped with death and destruction nipping at their heels, only to find the Port Authority’s sacrifice and losses on the day of the attacks substantially underplayed in the media in the hours immediately following.

“There was a very emotional period right after this incident,” said Port Authority board member William Martini. “I think the wounds were fresh, and a lot of people had a lot of needs that had to be addressed first-and those needs were of a very personal nature.”

Since then, the Port Authority has found five locations from which to operate around the city and in New Jersey, and it has a viable headquarters near Times Square. Toward the end of last year, the authority lost another chief executive: Chris Ward, the head of planning, who moved into the Bloomberg administration to take a position as commissioner for environmental protection.

“I think they had the wind knocked out of them [with] the loss of their leadership,” said one insider who has been in discussions with P.A. executives. “And they had big changeovers in the senior staff once they put that team together. So I think they’re now in a position where they’re asserting themselves.”

It began when Port Authority officials learned in the last days of March that the LMDC had issued a request for proposals for the 16-acre site-a move Mr. Seymour has since described as “premature.”

“They went crazy,” a source said of the Port Authority’s leadership. By April 19, the LMDC’s request had been withdrawn and a new one bearing the imprimatur of the authority as well as the development corporation went out on April 19.

One source said that an April 22 article in Crain’s New York Business , which characterized the Port Authority as “taking a back seat” to the LMDC, further roiled the P.A. and led the authority’s leadership to become more outspoken and decisive about their plans for the site.

Meanwhile, the LMDC is having bigger and bigger public meetings. On April 24, the LMDC announced plans for a “New England–style town-hall meeting” in July at the Jacob K. Javits Convention Center to allow 4,000 or more victims’ families, survivors, local residents, business owners and others to discuss the agency’s plans. America Speaks president Carolyn Lukensmeyer, an organizer of the conference, extolled the virtues of an “inclusive process which … is totally transparent.”

The move came one week after a cadre of top New York officials-including Peter S. Kalikow, chairman of the Metropolitan Transportation Authority, Mr. Seymour and Louis R. Tomson, president of the LMDC-presented a slate of specific transit proposals before an appropriations committee in Congress, many of which (the “Rector Connector,” for instance) had never been mentioned in the endless series of advisory council meetings held by Mr. Thomson’s own organization.

On one level, the meeting in Washington could appear to be a sign of cooperation among the interested organizations, but cynics suggest the D.C. ambassadors are all Pataki foot soldiers. He’s the master of the whole operation, they say.

“He put his buddies in there,” said one political consultant of the new leadership of the Port Authority.

“The consensus is that Mr. Seymour is pretty much in lockstep with Lou Thomson, who’s taking orders from the Governor,” said another.

Mr. Seymour, former chairman of the New York Power Authority, is a longtime aide to the Governor, having served as city manager of Peekskill when Mr. Pataki was mayor. Mr. Tomson is a close associate of Mr. Pataki’s who served as the state’s deputy secretary to the public authorities and knows the Port Authority well.

To counteract the public perception that the P.A. and the LMDC keep banging heads, both agencies have been taking every opportunity to showcase their cooperation. LMDC spokesman Matt Higgins pointed to the two groups’ cooperation in establishing a temporary memorial to those who died on Sept. 11; Mr. Morrison said the working relationship between the Port Authority and the LMDC was “excellent.” One Port Authority board member admitted that, from Mr. Pataki’s perspective, the P.A.’s recent assertiveness has “come off badly.”

Still, the Governor will need the Port Authority in order for his leadership of the redevelopment to be successful. In an election year, strangely enough, that relationship could be the very thing that makes all these public hearings count for something.

“It’s true that the LMDC doesn’t control the site, but some of the things they’re saying reflect demands and interests in the city at large,” said one hopeful insider and former official at the P.A. “The Port Authority is politically accountable most significantly to the Governor: If there’s a strong interest that the Governor wants to be responsive to, the Port Authority is not going to be able to sit there and say, ‘Sorry, Governor.’