Mr. Tsao completed his classes at the N.Y.U. film school in 2004, but students on the directing track don’t receive their B.F.A. until they complete their short films—and Mr. Tsao had gotten himself in way deep.

Depending on the year of study and the class, the average student film should cost between a few thousand and $10,000, according to David Irving, an associate professor of film and television at N.Y.U.

But in an era when tuition, room and board have already eclipsed $40,000 a year, the better-off N.Y.U. students sometimes spend more than double that amount on their student films. One N.Y.U. film professor referred to these elaborate student films with super-sized budgets as the school’s “dirty little secret.”

Mr. Tsao, indeed, exceeded all expectations. One of Mr. Tsao’s film-school colleagues pegged the film’s cost at $130,000; another said it cost $140,000. But Mr. Tsao said that his film cost a mere $96,000—though he also estimated that he saved as much as $70,000 with favors, especially on the set design.

While many neophyte filmmakers utilize an everyday location such as a park or a backyard, Mr. Tsao’s 24-minute film, called Ghost Soldier, is set in Falluja, Iraq, inside a prison run by the Sunni militia. Take that, Max Fischer!

For two weeks, a set designer had constructed the faux prison from wood and Styrofoam. It was moved to an N.Y.U. soundstage for 10 days, and two additional days of shooting took place in his hometown of Scarsdale, N.Y.

Mr. Tsao said that he got a $40,000 loan secured by someone else’s good credit, and the rest came from friends and family. “Since my brother is the main actor,” he said, “they looked at it as two investments.”

Was he worried that he could pull off his ambitious P.O.W. film? “Yes,” he said. Was his professor? “Looking back on it, I don’t know why he wasn’t more discouraging,” Mr. Tsao said.

Up on the seventh floor of the 721 Broadway, the main building of Tisch School of the Arts, Mr. Tsao introduced his film. “I would like some feedback with the sound,” he told the 20 people in the audience.

One professor wondered if they might make suggestions regarding the picture as well. “That’s fine, too,” Mr. Tsao said.

The rat-a-tat-tat sounds of gunfire filled the room.

“It’s not a project,” Mr. Tsao had said of Ghost Soldier. “It’s a ticket to the future, a step toward making a first feature.”

In fact, he’s already raising money for that first feature, which is set in Asia during World War II. He also has offers to direct two projects with schoolmate Karen Redstone—granddaughter of Sumner, the Viacom chairman of the board—as producer.

When the lights came up, Mr. Tsao was greeted by enthusiastic applause. But while he was hoping for notes on the sound, the professors launched into a 20-minute constructive critique of the film, each using words that could appear in large type across any feature-film review: Powerful! Beautiful! Amazing! Astonishing!

Still, Mr. Tsao was determined to trim a few minutes off the film. One professor was confused by the title and inquired if Mr. Tsao had another. Yes. He had also considered The Time Capsule.

He was advised to keep thinking.

BUT DO BIG-BUDGET SHORTS GET FILM STUDENTS the hoped-for jump to Hollywood?

“I’ve never personally signed somebody that had a very extravagant short as their calling card,” said Mike Lubin of the William Morris Agency, who represents directors Nicole Kassell and Rose Troche. “I think people want to see pure raw talent. I think if you see it done cheaply, it’s more impressive than if your parents wrote you a big check.”

“If you can tell a good story with $2, that’s going to impress me more,” said Brett Ratner, an N.Y.U. graduate who has gone on to direct big-budget action films like Rush Hour, Red Dragon and the upcoming third installment of X-Men. “Make me laugh. Make me cry. That’s going to stay with me.”

Mr. Ratner’s own late-80’s student film, What Happened to Mason Reese? (starring the eponymic child television-commercial star), cost about $12,000 and won the school’s First Run Festival.

Mr. Ratner recalled a case of an extravagant student film even in the late 80’s. “There was a kid a year older who did an expensive film—I’m not going to tell you who it was. He made a 50-minute film. It was five times as long, so it cost at least five times as much as mine. O.K., it was Peter Shore; his mom was Mitzi Shore. Do you know who she is? She discovered Letterman and Leno. He had the guy from Sixteen Candles—Ken what’s-his-name—and a lot of comedians. The production values were insane. I thought the film was brilliant. It was kind of like The Player with comedians.”

So where is Mr. Shore—brother of Pauly, no less—today? “I have no idea,” Mr. Ratner said. According to IMDb.com, Mr. Shore has four credits spread over two decades as a director, all on TV, including Hard Copy and A Current Affair.

James Cox, a late-90’s N.Y.U. graduate who won First Run’s top prize in 1999 with his $30,000 feature Atomic Tabasco, does think that big-budget student films could pay off. “A good short, if you pull it off—all the production and good performances—you go right into making your first movie for five or six million. It’s a no-brainer.” Mr. Cox, at least, can back that up: He directed 2002’s Highway, with Jake Gyllenhaal and Jared Leto, and Wonderland in 2003, starring Val Kilmer and Lisa Kudrow.

“Nowadays, there is a syndrome where students sometimes see other students spending money, and they want to keep up with the Joneses,” said Mr. Irving of N.Y.U. There are also, he added, students who make 25-minute films on video for $400.

N.Y.U. hasn’t yet considered capping the budgets of student films. “It hasn’t come up, but maybe it should,” said Mr. Irving.

On the west coast, N.Y.U.’s rival, the University of Southern California, does exactly that. “We have tried to take the competition out of the process on the undergraduate level,” said Michael Taylor, the chair of the Division of Film and Television Production. There, in the most advanced undergraduate class, 12 students put in $300 each toward a communal budget for a total of $3,600 per film, although the director has the option of spending an additional thousand—but no more. “We don’t allow it in these classes,” said Mr. Taylor. “We try to level the playing field—but it’s very, very difficult to have a completely level playing field.”

“The whole point of making a movie is, it makes you a better filmmaker,” said Otto Cedeño, 20-year-old N.Y.U. senior. He made his short, Gradual Suicide, about a band searching for their name (guess what they choose?) for $5,400. “If you have the money, it almost makes it too easy. You can buy a movie by hiring people who know stuff—and you’re not learning.”

“It’s outrageous!” said Arden Wohl, a 22-year-old N.Y.U. senior. “It’s a substitute for lack of story, and it makes people look bad.” Ms. Wohl spent $5,500 on her junior-year film; it was financed entirely by her parents. “My dad said, ‘As long as it’s good and you’re learning,’” she recalled.

Had she wanted, Ms. Wohl could have driven a Brinks truck to the bank. The Park Avenue–bred (yet relatively thrifty) Ms. Wohl spends New Year’s in St. Bart’s with her parents, who are regulars on the charity circuit. But she still thinks she overspent. “It’s shitty, and got me nowhere. I wish I would have done it for free.”

ANOTHER SUBJECT OF FILM-SCHOOL GOSSIP is Swiss-born Krisztian Maj-dik. He completed classes at N.Y.U. in December.

Mr. Majdik isn’t the typical pasty Tisch student: Two years ago, he was the 2004 NCAA triple-jump champion, and he was also All-American in the long jump. “As a boy, I never liked movies—I discovered it late,” he said.

Mr. Majdik’s 12-minute film, Night Falls, is a based on the Ambrose Bierce short story “Chickamauga,” about the horrors of war—civil—as seen though a child’s eyes. “My professor liked the script, but he said, ‘The fire in the end—why don’t you do it differently?’” The fire stayed.

Mr. Majdik disputed that the film cost more than $100,000. He put the current cost close to $70,000, which was collected from family and friends. But he still needs about $7,000 to finish it.

“My girlfriend’s family wants to give me the money to finish the film, but I’m too embarrassed to take it,” he said.

And then there’s Anthony Green, N.Y.U.’s Canadian Cecil B. DeMille, who completed classes last year. His short, Pigeon, was produced for a junior-year class—Color-Sync Workshop—that requires a project no longer than eight minutes, for which students are meant to collaborate in crews of four.

A 10-minute short, Pigeon takes place on a late-19th-century steam train in France during World War II. It is shot in 35-millimeter and stars Academy Award–nominated actor Michael Lerner and Wendy Crewson, a celebrated Canadian actress. Mr. Green insisted that his budget was quite reasonable.

When Mr. Green is “in town on business” from Toronto, he stays in the Palace Hotel at 50th and Madison, where the rooms start at $400 a night. Over a cranberry juice in the lobby on a Tuesday in mid-January, Mr. Green, who resembles a lanky version of Jim Morrison, pegged the cost of his period film at $25,000.

But that’s only true on a technicality—or three.

Mr. Green, the son of the co-founder of the popular Canadian sportswear and leather brand Roots, first said that he paid the film’s $25,000 budget entirely on his own, “from my bar mitzvah money and day trading.” When pressed, and following a bout of seat shifting, Mr. Green admitted that his father split the cost by distributing Roots gift certificates to the 60-member crew in lieu of cash payment. “They were in denominations of $150,” he said.

And how did he score the Oscar nominee? “I’m friends with a guy who runs a studio, and he’s good friends with Michael Lerner,” said Mr. Green. Mr. Lerner responded to the script, he said. (That “guy” with the art studio is actually the brother of his father’s business partner.)

But Mr. Lerner signing on meant trouble: Canada has strict requirements regarding the nationalities of cast and crew. With the American Mr. Lerner in the cast, the film wasn’t eligible for discounts off union rates—and the budget rose from $15,000 to $25,000. Mr. Green turned to Professor Irving for help.

According to Mr. Green, the professor’s response was: “You’re being ambitious. This is your problem.”

(“I would have done anything to help Anthony,” said Mr. Irving, “but it seems that it was outside the spirit, and therefore the curriculum, of Color-Sync. Otherwise I’m happy to help in any way.”)

Enter Karen Wookey, the veteran Canadian producer of such syndicated television shows as Mutant X and Andromeda—and a longtime friend of Mr. Green’s parents.

Ms. Wookey, in her new capacity as Pigeon’s producer, casually mentioned Mr. Green’s budget issues over breakfast with her former boss, Jay Firestone, the Canadian entertainment mogul who founded Fireworks Entertainment. Mr. Firestone threw in the $10,000 needed for completion from personal funds.

Ms. Wookey also got the script into the hands of Ms. Crewson, who Americans may know as Anne Packard from the third season of 24. But the masterstroke was getting most of her crew from Mutant X, which was on break at the time, to work on the film. The professional crew largely worked for free, and the post-production was on the house.

As for Pigeon’s real-world cost, Ms. Wookey said, “You could probably say it was between $200,000 and half a million, depending on your measuring posts.” Ms. Wookey is very proud of the finished product. “We were alone watching the final mix and I was crying, and I looked at him and said, ‘I didn’t think I ever gave you a really good bar mitzvah present.’”

Her real bar mitzvah present had been a deluxe version of the Leatherman multi-tool unit.

Mr. Green chalked it up to luck—“a lot of being in the right place at the right time,” he said. And members of school’s faculty are pleased with Mr. Green’s result. “It’s a very good film,” Mr. Irving said.

“I admired the script,” said Kenneth Dancyger, a professor in the film school and a mentor to Mr. Green. “The fact that it’s as good as the film is stunning.” Mr. Dancyger is so fond of Pigeon that a production still is featured on the cover of the third edition of his book, Writing the Short Film.

And Mr. Dancyger also shows Pigeon to his students. Does he fear inciting budget wars in class? Ah, too late: “That happened 10 years ago,” he said.

For his encore, Mr. Green is working on another student film, this one a thriller starring the well-known Canadian actress Martha Burns. It was shot inside the new terminal at the Toronto International Airport and on its tarmac—a pretty neat trick in the post-9/11 security era. “It was pretty cool,” Mr. Green said of his airport access, which was also procured through a friend of the family.

—Andrew Stengel

Pols and Pros

Tom Wolfe was giving a speech, but a bookish fellow in the corner was still chatting away.

“Could you please keep it down?” a man asked the talker.

“I don’t think I’m speaking so loud,” the publishing sort answered.

“I will take you outside and knock every fucking tooth out of your head,” the man explained.

“Got it,” said the chatterer. “I will stop talking.”

So the McManus Democratic Club last week was nothing if not a crowded intersection. All the city’s different walks of life came to sip zinfandel and root beer, eat cheese and crackers, and show support for Eddie Hayes’ new book Mouthpiece: A Life In—and Sometimes Just Outside—the Law.

“There were people from a wide variety of life,” Mr. Hayes said last Friday, describing the party. “Whether from the legitimate side of life or the not-so-legitimate side. The not-so-legitimate guys, let’s just say they are working guys, hard-working union men, with hobbies. There were a number of women there whose primary means of employment … well, these were women who profit greatly from love—women in very high heels. It was a very nice event.”

Mr. Hayes said that due to such notable guests as his good, if unlikely, friend Governor George Pataki, author Thomas Kelly and Deputy Police Commissioner Charles De Rienzo (Ray Kelly had another benefit, he explained), the lawyer-cum-writer found himself playing referee.

“A couple of times I had to run over and say, ‘Hey, you can’t have your picture taken with him. Get out of that picture.’”

Jim McManus, who runs the historic club, helped guard the Governor from some of Mr. Hayes’ former defendants. It was then that he noticed some pain on Mr. Pataki’s face.

“I noticed that he was holding his side,” said Mr. McManus, who realized only the day after that Mr. Pataki was walking around with the ruptured appendix that forced an emergency surgery last Thursday. “He stayed a half hour and then he left, and I was surprised, because he was such a good friend of Eddie.”

“Only at Eddie Hayes’ party could you have Pataki and some of the West Side legends, like people with my last name,” said Robert Spillane, the son of Mickey Spillane, a boss in the infamous Westies gang who was murdered in the 1970’s.

Mr. Spillane, who is now writing a play about a cross-dressing mobster called All Dolled Up, said the club became so hot and packed that associates of Sean Combs, a former client of Mr. Hayes, offered some of their neighboring studio’s space to absorb the spillover.

“It was chaos!” said Mr. McManus. “The place was jammed.”

But Mr. Hayes said that he couldn’t imagine having the party anywhere else.

“The theater district was the heart of Manhattan in many ways,” Mr. Hayes said. “It was the heart of entertainment, or criminal activity or depraved-sex activity. It was the heart of the Democratic machine. It meant a lot to me.

“I didn’t lead the type of life you’ve been hearing about lately. These clerking and law-review guys—I wasn’t one of them. But I could tell you a lot about after-hours clubs. I was up in the Bronx. When it was bad. And if you were poor, then your life was a fucking misery. The city smelled bad. There was blood all over the place. But you got a feel for that. And the buildings, where there was some guy chopped into nine pieces in the hall—you got a feel for that, too.”

The city sure has changed a lot. Hell’s Kitchen, once terrorized by the Irish Westies, is now softened by doe-eyed college students, though a purse-snatcher or two still lurks the streets.

“One of the young women from the publishing house said to me, ‘You have some security if you need it,’” said Mr. Hayes. “I pointed at one of the guys at the party and said, ‘Well, his uncle was known as “the Butcher”—I think it is unlikely anything is going to happen around here.’”

—Jason Horowitz

The Little Cecil B. DeMilles: At N.Y.U., where the kids are already paying $40K a year, some film schoolers are paying twice that much, and more, for their student films. Even Brett Ratner, former graduate and king of Hollywood high-budget, says it's too much.

If you have to ask, he hasn’t done his job.

Mouthpiece, the title of his lively, entertaining and utterly unapologetic autobiography, makes him sound like a flak, but he’s actually a lawyer—a “big-city lawyer,” he likes to say—with a colorful history of high-profile clients who come to him because, as he repeatedly insists, he gets things done: “You have a problem, you call me, I’m there.” Hotheaded, tenacious and fabulously well-connected, he’s a shameless operator whose motto is “scheme, hustle, move, and score.” His biggest case pumped up the value of Andy Warhol’s estate by some $400 million; his clients include Anna Wintour, Allen Grubman and Daniel Libeskind; his friends include Si Newhouse, Robert De Niro and George Pataki.

His best friend, Tom Wolfe (who turns somersaults in a cheerleading introduction to Mouthpiece), used him as the model for Tommy Killian, Sherman McCoy’s hotheaded, tenacious defense attorney in The Bonfire of the Vanities—and dedicated the novel to him.

But who is Eddie Hayes?

He proudly calls himself “a neighborhood white boy”—to be precise, an Irish Catholic white boy, born in 1947, who grew up in Jackson Heights and Garden Bay Manor (that’s deepest, darkest Queens, for those of you who’ve never set foot in the valley of ashes). Ethnic, racial and sexual characteristics are very important to Mr. Hayes—they are, for him, the key to identity. Which means that Mouthpiece is not a book for the politically correct—or anyone, for that matter, with tender liberal sensibilities or an aversion to strong language. Here, for example, he explains why he volunteered as a poll watcher in Mississippi in 1972: “I don’t give a fuck about Mississippi or rights, and if I had a social conscience I would sell it. But the trip might be exciting ….” Note the present tense—it’s the only one Eddie Hayes deals in.

We all have a past, though, some kind of childhood. Eddie Hayes had a rotten one: His father was stewed in alcohol, and brutal; Eddie was the punching bag. He writes, “the most important thing I learned in the world dominated by my father’s sick, drunk conduct was that I could take a beating.” Eddie’s mother, of course, was a saint. She had the weird notion that her first-born son should go to college—and not just any college. She wanted him to go to the University of Virginia. And weirder still, that’s exactly what he did.

And then on to Columbia Law School, which he didn’t much care for, but where, at the dawn of his second year, he discovered an abiding passion: “Dominican women! Jewish women! Black women! For a ready guy who was not holed up in a library all day long, New York City in the fall of 1971 was full of spectacular opportunities.” After four years in the Bronx County District Attorney’s office, he struck out on his own in 1978, “practicing a harsh, unforgiving kind of law.”

Club owners, call girls, bouncers, drug dealers, gangsters—these are the clients he starts out with. (“I wouldn’t represent child molesters or rapists,” he assures us.) Then it’s newspaper reporters and columnists, among them Mike McAlary and Richard Johnson. “There were times,” he writes, “when I represented the editors of the Post and the Daily News at the same time. Conflict of interest? Catch me if you can!”

The best part of Mouthpiece is the account of the legal wrangling over Andy Warhol’s estate, which made Mr. Hayes rich and then promptly bankrupted him, a 10-year courtroom drama set to the music of that barbaric yawp, Counselor Hayes’ Queens accent. Along the way he discovers that “the universe of New York’s cultural elite, fancy auction houses, and slick corporate lawyers who represent them is even sleazier, more scheming, more conniving, and far more treacherous than anything I’ve encountered in the crime business.”

Yes, but who is Eddie Hayes?

A “completely self-concocted guy” who’s spent 30 years in therapy trying to understand his crying jags, who finally, age fiftysomething, resorts to the miracle of psychopharmacology so that at last he can enjoy the life (the lovely wife, the two lovely kids) he’s built from scratch.

How about an outside perspective? Andy Warhol came home from a party one night in the fall of 1980 and noted in his diary “a defense lawyer named Ed Hayes who looked like he was from Laverne and Shirley, like a plant that people invite to parties to wear funny clothes and jump around and make things ‘kooky.’ Sort of forties clothes, really crewcut, about twenty-nine. He said, ‘I can get ya outta anything.’”

As you’d expect from a man enthusiastically devoted to the “muscle” of patronage, Mr. Hayes has collected a lovely bouquet of blurbs for the back cover of Mouthpiece – former Police Commissioner William Bratton, for example, assures us that “Eddie Hayes walks, talks, and acts like a character created by Damon Runyon.” In fact, he’s just like a particularly foppish Tom Wolfe character: obsessed with his Savile Row suits and his custom-made shoes, painfully attuned to status, convinced that daily life is a dirty fight to the finish, partial to exclamation points, consistently provocative and great fun on the page.

Adam Begley is books editor of The Observer.

If you have to ask, he hasn’t done his job.

Mouthpiece, the title of his lively, entertaining and utterly unapologetic autobiography, makes him sound like a flak, but he’s actually a lawyer—a “big-city lawyer,” he likes to say—with a colorful history of high-profile clients who come to him because, as he repeatedly insists, he gets things done: “You have a problem, you call me, I’m there.” Hotheaded, tenacious and fabulously well-connected, he’s a shameless operator whose motto is “ scheme, hustle, move, and score.” His biggest case pumped up the value of Andy Warhol’s estate by some $400 million; his clients include Anna Wintour, Allen Grubman and Daniel Libeskind; his friends include Si Newhouse, Robert De Niro and George Pataki.

His best friend, Tom Wolfe (who turns somersaults in a cheerleading introduction to Mouthpiece), used him as the model for Tommy Killian, Sherman McCoy’s hotheaded, tenacious defense attorney in The Bonfire of the Vanities—and dedicated the novel to him.

But who is Eddie Hayes?

He proudly calls himself “a neighborhood white boy”—to be precise, an Irish Catholic white boy, born in 1947, who grew up in Jackson Heights and Garden Bay Manor (that’s deepest, darkest Queens, for those of you who’ve never set foot in the valley of ashes). Ethnic, racial and sexual characteristics are very important to Mr. Hayes—they are, for him, the key to identity. Which means that Mouthpiece is not a book for the politically correct—or anyone, for that matter, with tender liberal sensibilities or an aversion to strong language. Here, for example, he explains why he volunteered as a poll watcher in Mississippi in 1972: “I don’t give a fuck about Mississippi or rights, and if I had a social conscience I would sell it. But the trip might be exciting ….” Note the present tense—it’s the only one Eddie Hayes deals in.

We all have a past, though, some kind of childhood. Eddie Hayes had a rotten one: His father was stewed in alcohol, and brutal; Eddie was the punching bag. He writes, “the most important thing I learned in the world dominated by my father’s sick, drunk conduct was that I could take a beating.” Eddie’s mother, of course, was a saint. She had the weird notion that her first-born son should go to college—and not just any college. She wanted him to go to the University of Virginia. And weirder still, that’s exactly what he did.

And then on to Columbia Law School, which he didn’t much care for, but where, at the dawn of his second year, he discovered an abiding passion: “Dominican women! Jewish women! Black women! For a ready guy who was not holed up in a library all day long, New York City in the fall of 1971 was full of spectacular opportunities.” After four years in the Bronx County District Attorney’s office, he struck out on his own in 1978, “practicing a harsh, unforgiving kind of law.”

Club owners, call girls, bouncers, drug dealers, gangsters—these are the clients he starts out with. (“I wouldn’t represent child molesters or rapists,” he assures us.) Then it’s newspaper reporters and columnists, among them Mike McAlary and Richard Johnson. “There were times,” he writes, “when I represented the editors of the Post and the Daily News at the same time. Conflict of interest? Catch me if you can!”

The best part of Mouthpiece is the account of the legal wrangling over Andy Warhol’s estate, which made Mr. Hayes rich and then promptly bankrupted him, a 10-year courtroom drama set to the music of that barbaric yawp, Counselor Hayes’ Queens accent. Along the way he discovers that “the universe of New York’s cultural elite, fancy auction houses, and slick corporate lawyers who represent them is even sleazier, more scheming, more conniving, and far more treacherous than anything I’ve encountered in the crime business.”

Yes, but who is Eddie Hayes?

A “completely self-concocted guy” who’s spent 30 years in therapy trying to understand his crying jags, who finally, age fiftysomething, resorts to the miracle of psychopharmacology so that at last he can enjoy the life (the lovely wife, the two lovely kids) he’s built from scratch.

How about an outside perspective? Andy Warhol came home from a party one night in the fall of 1980 and noted in his diary “a defense lawyer named Ed Hayes who looked like he was from Laverne and Shirley, like a plant that people invite to parties to wear funny clothes and jump around and make things ‘kooky.’ Sort of forties clothes, really crewcut, about twenty-nine. He said, ‘I can get ya outta anything.’”

As you’d expect from a man enthusiastically devoted to the “muscle” of patronage, Mr. Hayes has collected a lovely bouquet of blurbs for the back cover of Mouthpiece – former Police Commissioner William Bratton, for example, assures us that “Eddie Hayes walks, talks, and acts like a character created by Damon Runyon.” In fact, he’s just like a particularly foppish Tom Wolfe character: obsessed with his Savile Row suits and his custom-made shoes, painfully attuned to status, convinced that daily life is a dirty fight to the finish, partial to exclamation points, consistently provocative and great fun on the page.

Adam Begley is books editor of The Observer.

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."