Less Than Zero: The Libeskinds Sue Silverstein

A mere 10 days after Governor George Pataki presided over an optimistic and buoyant ceremony to lay the cornerstone of the Freedom Tower at the World Trade Center, Ground Zero master planner architect Daniel Libeskind filed suit against Larry Silverstein, the developer who is building the 1,776-foot-tall spire.

The lawsuit arises out of a billing dispute between the architect and the developer that has grown into a bitter feud and hit an impasse, both sides say, and construction on the symbolism-strewn tower will now play out against yet another courtroom feud.

In court papers filed July 13, Mr. Libeskind claimed that Mr. Silverstein owes his firm $843,750 for the architectural work it performed on the Freedom Tower between July and December of 2003. Mr. Silverstein allegedly last offered around $225,000 for the work, a figure that Mr. Libeskind has called “insulting,” and which he has said is in retaliation for the way his vision for the skyscraper clashed with that of Mr. Silverstein’s architect on the project, David Childs, of Skidmore, Owings and Merrill.

“It has always been our desire to avoid a senseless courtroom fight. That being said, we fully expect to prevail,” Mr. Silverstein said through a spokesman.

The filing of this lawsuit marks the low point in the often tempestuous relationship between the 58-year-old Mr. Libeskind and the 73-year-old Mr. Silverstein. Although the dispute has been simmering for months, the fact that it has escalated into a full-blown lawsuit reveals how much animosity there now exists between the two men.

That rancor, and the impending legal showdown it has provoked, also represents something of an embarrassment for Mr. Pataki and Kevin Rampe, the president of the Lower Manhattan Development Corporation. The two men are fond of invoking lofty, idealistic rhetoric when describing the moral imperative of digging Ground Zero out from under the ashes, and of lauding the felicitous cooperation that resulted in the largely symbolic laying of the cornerstone of the Freedom Tower on July 4.

Instead of idealism, the Governor and Mr. Rampe now find themselves, once again, knee-deep in a morass of finger-pointing and name-calling between the two largest private-sector stakeholders of the World Trade Center. But whereas the last dispute between Mr. Libeskind and Mr. Silverstein-over the design of the Freedom Tower-could at least be chalked up to a disagreement over aesthetics, this current dispute is about nothing more lofty than money. In that sense, however, it seems strikingly apt, rooted as it is in what promises to be the tallest monument to commerce ever constructed by man.

“We are surprised that Studio Daniel Libeskind has filed a lawsuit at this time,” Mr. Silverstein said through his spokesman. “It was our understanding that just a few days ago the Libeskinds accepted our repeated suggestion of mediation by some neutral third party and that they were in fact considering a list of potential mediators.”

Mr. Libeskind’s lawyer, Ed Hayes, responded that he is not aware of any list of potential mediators, while simultaneously rejecting the idea of meditation out of hand. “We would never accept mediation with Mr. Silverstein because it’s not public, it’s not under oath and it’s not binding.”

The lawsuit against Mr. Silverstein comes at a time when the developer is already embroiled in a separate legal battle with the World Trade Center’s insurers. Mr. Silverstein had sought a $7 billion payout, but recent court losses have cut his available rebuilding money down to between $3.5 and $4.6 billion, raising questions about how many new buildings he will be able to finance on the site, and whether or not other developers may have to step in. Mr. Silverstein has long insisted that he will at least have enough insurance money to build the estimated $1.6 billion Freedom Tower, but he softened that stance recently by admitting that he would likely be dependent on government-subsidized Liberty Bonds to help build even the first tower.

Stuck With Each Other

In his lawsuit, Mr. Libeskind has not asked for an injunction that would halt the just-begun construction on the tower, so it is unlikely that the legal action will slow the building’s ascent. What remains to be seen, however, is what ramifications the suit, regardless of its outcome, will have on the downtown rebuilding process in the years to come. Unless one party walks away or is removed from the site, the two men will have to continue working together to ensure that Mr. Silverstein’s commercial plans for the site fit within the master plan that Mr. Libeskind created for it. That includes perhaps as many as four more skyscrapers, for starters, in addition to a dizzying network of underground infrastructure and myriad aboveground programmatic elements, many of which have yet to be imagined. Given the bitterness evident in the Libeskinds’ public statements about Mr. Silverstein, it’s hard to imagine much synergy on the site in the short term.

The lawyer who brought this suit on behalf of the Libeskinds is Eddie Hayes, the 56-year-old scrappy pugilist on whom Tom Wolfe based the character of the defense lawyer in The Bonfire of the Vanities . Mr. Hayes made headlines in early 2002 for extracting $100 million out of a 9/11 victim’s-families fund controlled by then-Mayor Rudy Giuliani.

One downtown watcher active in the business community called the lawsuit an “opportunistic sideshow” that has far more to do with Mr. Hayes than it does with Mr. Silverstein.

“He’s been looking for an angle to make headlines since he settled the issue with Giuliani,” the business leader said on the condition of anonymity. “It’s the kind of opportunistic play that unfortunately some people are tempted to take advantage of in the downtown situation …. No developer pays their architect on time. I knew when Libeskind hired [Mr. Hayes] that this was going to happen.”

Mr. Hayes, for his part, defended his actions in the Giuliani case, and charged that Mr. Silverstein will only respond to a lawsuit.

“Giuliani would not transfer the money to the families of the rescuers who died until we threatened litigation,” he said, “and Silverstein can’t use as an excuse that he never pays anybody [on time] to not pay the people who work for him.”

The billing dispute has its origins in the July 2003 compromise that made Mr. Silverstein’s architect, Mr. Childs, the lead designer of the Freedom Tower, and relegated Mr. Libeskind to the status of second-string “collaborating” architect. (As the master planner of the site, Mr. Libeskind makes large-scale decisions about things like the location and relative size of the skyscrapers, the memorial and the cultural buildings, but Mr. Silverstein, who holds a 99-year lease of the site from the Port Authority, gets to make decisions about architects for individual elements of the site.) In the months that followed that compromise, members of each camp fed the media with systematic leaks and counter-leaks that painted the other side’s architect as a prima donna, and unwilling to compromise.

Nevertheless, in December the LMDC did announce a compromise vision for what would become the signature element of the World Trade Center. The mammoth building would torque as it rises to around 1,500 feet, at which point a cable-enclosed set of windmills tops out the tower at 1,776 feet. Although the skyscraper will retain the spire that was a main feature of Mr. Libeskind’s original design for the building, the master planner distanced himself from the “finished” product, insisting that the building’s design was mostly Mr. Childs’, and that it only barely fit within his master plan.

At that point, the battle behind him, it came time for Mr. Libeskind to submit his firm’s bill. As he outlined in his lawsuit, the July 2003 power-sharing compromise did not address payment issues, but Mr. Libeskind assumed he would be paid based on a percentage of the project’s total costs, as is par for the industry. As a result, neither he nor his staff members kept formal time sheets to mark the time they spent working on the Freedom Tower.

“[Our firm] has never billed for a private client on an hourly basis,” Ms. Libeskind wrote in an affidavit supporting the lawsuit. “[Mr. Silverstein's firm] knew this because it previously offered to hire [us] as consultants on this project on a percentage basis.”

By Mr. Libeskind’s calculations, his firm is owed $843,750. But, Ms. Libeskind said, Mr. Silverstein countered with a much lower number, somewhere around $125,000; he later rose to $225,000. Mr. Silverstein has declined to comment on the specifics of the negotiations.

“Daniel Libeskind has already been paid many millions of dollars for his work by the LMDC and the Port Authority and is unable to provide any industry-standard time sheets or other documentation that would justify an additional payment of more than $800,000,” said Mr. Silverstein’s spokesman.

In a May 7 letter to Mr. Silverstein, Mr. Libeskind’s wife and business partner, Nina, charged that the developer’s refusal to compensate the Libes-kinds was a reprisal for their attempts to shrink and alter the building to fit into their master plan.

“One can only assume that the almost insulting amount offered by you for our conceptual and design effort is in retaliation for our refusal to accept a building which was grossly out of scale and not in compliance with the master plan,” Ms. Libeskind wrote in the letter, which The Observer first disclosed on June 2.

Recently, as it became obvious that both sides were still several hundred thousands of dollars apart, both Mr. Rampe of the LMDC and members of the Governor’s office tried to mediate the issue.

“Kevin Rampe strove mightily to solve this problem,” Mr. Hayes said. “But it didn’t work.”