Over the next 20 years, New York City is expected to add one million residents. Imagine airlifting the entire populations of Boston and Miami into the five boroughs, and you’ll have some idea of the massive strain which will be placed on the city’s infrastructure, from its subways and streets to our schools, parks and housing.

Fortunately, Mayor Michael Bloomberg has decided to confront this challenge directly. No Mayor in recent memory—or even distant memory—has insisted upon such a comprehensive and nonpartisan assessment of where the city stands, and what has to happen to make sure New York doesn’t fall victim to its own popularity.

It will, of course, cost billions. Mr. Bloomberg’s goals include creating housing for those million new New Yorkers; expanding mass transit; reducing global-warming emissions by one-third; opening 90 percent of the city’s waterways for recreation; instituting pollution controls to give New York the cleanest air of any city in the country; addressing an expected shortage of adequate power supplies; making sure all New Yorkers live within a 10-minute walk of a park; and building nearly 100 new playgrounds.

But the cost of not taking these steps would be even greater. Yes, New York has fought its way back from the economic and psychological aftermath of 9/11, holding on to its status as the safest large city in the nation, while achieving an unemployment rate of 4.1 percent and capturing the world’s imagination as a showcase to visit and a wonderful and stimulating place to live. But just a few months or years of perilous overcrowding, combined with a decaying infrastructure, unchecked pollution and an unexpected spike in the crime rate, could return the city to the bad old days of the 1970’s, when City Hall was reduced to asking for federal handouts to pay its bills and residents saw the value of their homes plummet and their neighborhoods atrophy.

Making a significant and unprecedented investment in the city’s economic, social and cultural foundation now will ensure that New York remains vibrantly competitive in the world marketplace. To make all of this happen, the Mayor has created an Office of Long-Term Planning and Sustainability—essentially he’s locking a smart bunch of city planners, engineers and scientists in a room together and asking for results. Over the next three months, Mr. Bloomberg says, he will offer specific solutions and propose a way to pay for them.

With similar foresight, the Mayor has also announced an anti-poverty plan that would spend $150 million annually, in private and public funds, with much of that money going toward experimental measures, child-care efforts and self-sufficiency enticements.

Clearly, the city will need enormous help from Albany to achieve many of these goals, but the incoming Governor knows, as his predecessor did not, that what’s good for the city is good for the state.

Meanwhile, one hopes that those on Wall Street, at Goldman Sachs and elsewhere, who are currently enjoying record multimillion-dollar bonuses will take a page from Mr. Bloomberg and understand that it is not sufficient to make money—one must also create the conditions for others less well-off to participate in the larger economy. The city’s future depends on it.

A New Face at Ground Zero—But Will We Get A New Tower?

With the dawn of a new administration in Albany comes the beginning of a fresh approach to reconstruction at Ground Zero. That’s the message that Governor-elect Spitzer is sending these days. One hopes that his appointment of Anthony Shorris to be executive director of the Port Authority will help speed the process, rather than slow it down even more.

Mr. Shorris isn’t a newcomer to the sprawling, two-state bureaucracy that is the Port Authority. He served as a top official at the P.A. for five years during the 1990’s, picking up valuable experience. After leaving the authority, he served as a deputy schools chancellor during the first years of the Bloomberg administration. He is, therefore, a bona fide government insider who knows how the process works, and who has impressed hard-to-impress people like Mr. Spitzer. The question is, does he understand how to get a bureaucracy moving after years of lethargy?

Given the special priority that will be placed on the renewal of Ground Zero during the new Governor’s honeymoon period, and the high visibility attending it, we are confident that Mr. Spitzer has full faith in Mr. Shorris’ abilities. The outgoing Pataki administration has managed to make a mess of Ground Zero, shattering hopes for a heroic reconstruction of that sacred space. At one point, Mr. Pataki seemed to believe that a rebuilt Ground Zero would serve as his legacy.

The new Spitzer team has vowed to conduct a sweeping review of Ground Zero, questioning cost estimates, lease projections and even the proposed height of the Freedom Tower. Mr. Shorris’ role in the review and reconstruction will be critical. He has promised to bring “a fresh look at the whole thing” and confirmed that Mr. Spitzer is determined to “get Ground Zero moving.”

Getting that job done will require the energy and fresh approaches that only a new administration can bring. The Governor and Mr. Shorris have to create a sense of urgency downtown. Ground Zero is not just another government project—it represents a vast web of interests. Mr. Shorris will have to be more than just a skilled insider. He’ll have to become a real-estate mogul, a diplomat, an engineer and a transportation guru.

The resiliency which New Yorkers have shown since that terrible day in 2001 should serve as an inspiration for Mr. Spitzer and Mr. Shorris. New Yorkers deserve, and are demanding, action at Ground Zero.

A Holiday Note

As New Yorkers gather for the Christmas, Hanukkah and New Year holidays, the mad rush of the season is only a distraction from the real opportunities on offer: the chance to connect with family and friends, the spirit of altruism which makes one reach deeper to give to charity, and some time to reflect on the year to come.

New Yorkers have much to be grateful for as 2006 draws to a close. There is a palpable shared focus and purpose, a sense that New York is a truly governable city which is on the upswing, with safe streets, the world’s best theater and museums, and the vibrant residential development of neighborhoods that previously had been written off as beyond hope. New York’s ultimate greatness, of course, is its people.

The Observer would like to thank our readers and advertisers, and to extend our wishes for a peaceful, joyful holiday and a very happy 2007.

Representative Jerry Nadler came out swinging last night at the scoping meeting for the New York Economic Development Corporation's planned redevelopment for Piers 7 through 10 on the Carroll Gardens/Red Hook Waterfront. Mr. Nadler opposed the transformation of Pier 10--currently used for maritime shipping--into a second cruise-ship terminal and 250-room hotel.

Citing the vulnerability of the Kill Van Kull--which connects Newark Bay and the Upper New York Bay and is the principal access for container ships to the Port Newark-Elizabeth Marine Terminal, the 15th-busiest port in the world--Mr. Nadler said that the shipping operations must continue in Brooklyn. "The Kill Van Kull is too narrow and shallow for the [metropolitan] area to depend on it," Mr. Nadler said, noting that if by accident or terrorism a ship sunk in the narrow straight, the economy of the region would be seriously affected. The Red Hook piers would be needed if any traffic to New Jersey is disrupted.

Mr. Nadler also emphasized the importance of retaining blue-collar jobs in the area, calling the redevelopment a "mad vision of New York where there are as few blue-collar jobs as possible" to thunderous applause from the audience of area residents, business owners and union workers from the nearby docks.

Matt Yates, the director of American Group RHCT, echoed Mr. Nadler's sentiments, saying that the city is failing to fully appreciate the effects of a port closure. "This is a quick and dirty process where the Republican administration wants to wrest control of public property." The land is question is owned by the Port Authority, a state agency, and is leased out to American Stevedoring.

Shortly after Mr. Yates spoke, E.D.C. vice president Kate Ascher left the meeting--before area residents could address her.

The E.D.C.'s plan includes 350 units of housing on the west side of Columbia Street between Atlantic Avenue and Degraw Street. Reactions from area residents were mixed; while most agreed that more housing was desirable, there was concern that the units would be market-rate, and that current views from Cobble Hill and Carroll Gardens would be blocked. Several speakers, including John McGettrick of the Red Hook Civic Association, noted that Red Hook, across the Brooklyn-Battery Tunnel to the south, is in desperate need of new housing and residential buildings should be developed there.

Other speakers at the meeting insisted that the E.D.C. try to develop a plan that would not decrease the number of waterfront jobs. The plan currently would allow Piers 7 through 9 to continue shipping operations.

Mr. Yates, outside the meeting, expressed confidence that the development plan would ultimately stall. "It's bound to fail," he said, noting that with the probable election of state Attorney General Eliot Spitzer to the Governorship later this year, the P.A. would quit "dancing to the development whims of the Mayor."

The E.D.C. hopes to begin the land-use review process later this year, with a vote from the City Council by next summer. Land acquisition would follow shortly thereafter.

Click here for enlarged map.

Key from the E.D.C..'s draft E.I.S.:

-Matthew Grace

What makes World Trade Center such a powerful film is the way in which it captures both the beauty of New York before the attack, the horror of Ground Zero and the selflessness of rescue workers, who fought horrendous conditions and long odds to save those trapped in the rubble. The crashing of steel, the fires that never stopped burning and the thundering sounds of flying objects combine to create a disturbing experience for the audience, but then it cannot even approach the emotional turmoil and physical pain experienced by those injured or killed at the site.

World Trade Center is really about New Yorkers, and the bridges and buildings—and public servants—that we depend on to keep this city alive. The tranquility of the Hudson River and the grace with which the George Washington Bridge links commuters in New Jersey to the office towers of New York; the packed subways running over the Manhattan Bridge before sunrise; and the cops and firefighters who protect the rest of us even when they cannot protect themselves.

Unlike so many of the television documentaries and magazine cover stories that are now surfacing as we approach the fifth anniversary of the Sept. 11 attack, this film does not focus on the hijacked planes, the words of politicians or the ongoing debate about who should build what at Ground Zero. This is a film that highlights the skills and tenaciousness of the NYPD Emergency Service Unit, the selflessness of the FDNY and the volunteers from all over the nation who came to New York to help, like the Wisconsin team portrayed in the film who grilled “the best brats you ever tasted” for their fellow rescue workers.

Sept. 11 did more than foster a new sense of connection among New Yorkers. It brought New York into direct contact with the rest of the world in a way no city had ever experienced. The film conveys this when people on every continent, of every race and ethnicity, stop in shock to watch television pictures of smoke and fire from the Twin Towers. Just as New York came to a halt, so did the world. People understood that if terrorists could blow up New York’s tallest buildings, then no place on earth was safe. As Sgt. John McLoughlin (Nicolas Cage) tells his fellow Port Authority cops in the film, “We’re prepared for everything—car bombs, chemical, biological, an attack from the top—but not this. Not for something this size. There’s no plan; we didn’t make it.”

A disaster like 9/11 doesn’t fade away. It has become part of the fabric of this city. In fact, it’s impossible not to feel the pervasive impact of the attacks on daily life in the city. The police cars stationed at the entrance to the Brooklyn Bridge; the harbor patrol boats next to the U.N. in the East River; the cluster of police assigned to the entrances of the Midtown Tunnel; the barriers surrounding the New York Stock Exchange; the massive planters positioned in front of midtown office buildings to prevent truck bombs; the mandatory photo ID to enter an office building; the anxious look when a fire engine comes blaring down the street; the nervous tension when the subway P.A. system announces that there is a “police investigation” at the next station.

And, of course, the absence of the Twin Towers, once visible throughout the region.

So many New York rituals have been generated by the attacks that we already take them for granted. The American flag flies from buildings that prior to Sept. 11 never had a flagpole; baseball fans sing “God Bless America” during the seventh-inning stretch; and no public event is held without a search of bags and packages. At firehouses in most neighborhoods, there are plaques and shrines to honor the firefighters who died in the rescue efforts.

What have we learned, five years after the most deadly attack by a foreign enemy on American soil? The film tells us that in times of stress, New York transforms itself from a city of strangers into a gigantic community mobilized to help those in greatest need. No film has ever done a better job telling that truth about this city and its people.

What makes World Trade Center such a powerful film is the way in which it captures both the beauty of New York before the attack, the horror of Ground Zero and the selflessness of rescue workers, who fought horrendous conditions and long odds to save those trapped in the rubble. The crashing of steel, the fires that never stopped burning and the thundering sounds of flying objects combine to create a disturbing experience for the audience, but then it cannot even approach the emotional turmoil and physical pain experienced by those injured or killed at the site.

World Trade Center is really about New Yorkers, and the bridges and buildings—and public servants—that we depend on to keep this city alive. The tranquility of the Hudson River and the grace with which the George Washington Bridge links commuters in New Jersey to the office towers of New York; the packed subways running over the Manhattan Bridge before sunrise; and the cops and firefighters who protect the rest of us even when they cannot protect themselves.

Unlike so many of the television documentaries and magazine cover stories that are now surfacing as we approach the fifth anniversary of the Sept. 11 attack, this film does not focus on the hijacked planes, the words of politicians or the ongoing debate about who should build what at Ground Zero. This is a film that highlights the skills and tenaciousness of the NYPD Emergency Service Unit, the selflessness of the FDNY and the volunteers from all over the nation who came to New York to help, like the Wisconsin team portrayed in the film who grilled “the best brats you ever tasted” for their fellow rescue workers.

Sept. 11 did more than foster a new sense of connection among New Yorkers. It brought New York into direct contact with the rest of the world in a way no city had ever experienced. The film conveys this when people on every continent, of every race and ethnicity, stop in shock to watch television pictures of smoke and fire from the Twin Towers. Just as New York came to a halt, so did the world. People understood that if terrorists could blow up New York’s tallest buildings, then no place on earth was safe. As Sgt. John McLoughlin (Nicolas Cage) tells his fellow Port Authority cops in the film, “We’re prepared for everything—car bombs, chemical, biological, an attack from the top—but not this. Not for something this size. There’s no plan; we didn’t make it.”

A disaster like 9/11 doesn’t fade away. It has become part of the fabric of this city. In fact, it’s impossible not to feel the pervasive impact of the attacks on daily life in the city. The police cars stationed at the entrance to the Brooklyn Bridge; the harbor patrol boats next to the U.N. in the East River; the cluster of police assigned to the entrances of the Midtown Tunnel; the barriers surrounding the New York Stock Exchange; the massive planters positioned in front of midtown office buildings to prevent truck bombs; the mandatory photo ID to enter an office building; the anxious look when a fire engine comes blaring down the street; the nervous tension when the subway P.A. system announces that there is a “police investigation” at the next station.

And, of course, the absence of the Twin Towers, once visible throughout the region.

So many New York rituals have been generated by the attacks that we already take them for granted. The American flag flies from buildings that prior to Sept. 11 never had a flagpole; baseball fans sing “God Bless America” during the seventh-inning stretch; and no public event is held without a search of bags and packages. At firehouses in most neighborhoods, there are plaques and shrines to honor the firefighters who died in the rescue efforts.

What have we learned, five years after the most deadly attack by a foreign enemy on American soil? The film tells us that in times of stress, New York transforms itself from a city of strangers into a gigantic community mobilized to help those in greatest need. No film has ever done a better job telling that truth about this city and its people.

"We don't think [the Libeskind plan] works," Peter Lowy, chairman of Westfield, told The Observer . "So why don't we sit down and fix it? Why not have a meeting? It's not that difficult. We think we can help and make it better."

Westfield's unhappiness is significant because the company and the Port Authority will have to renegotiate Westfield's lease at the site. Those talks give the company, the American arm of the family-run and publicly traded Australian retail powerhouse Westfield Inc., substantial control over what were once the plaza and concourse levels of the World Trade Center. In fact, some sources familiar with the legal tangle at ground Zero fear that Westfield in effect has veto power over any proposal for the use of the land through the lease renegotiations.

Because the lease specifies that damage to the site must be ameliorated to replace exactly what was there when the leases were signed, any changes-including restoring parts of the Lower Manhattan street grid, the building of a memorial or any changes in the number of square feet of retail space-requires the lease to be rewritten.

"To build the Libeskind plan, you have to renegotiate the lease," Mr. Lowy said. That process looks more and more tortuous in light of Westfield's recent warning to the Port Authority. A March 14 letter from Westfield to Joseph Seymour, executive director of the Port Authority, complained that the company's wishes were being ignored.

"While we have shown our willingness to make numerous compromises, we do not believe that the Port Authority or the [Lower Manhattan Development Corp.] has given proper consideration to our best professional judgment, much less to our rights or commercial interests or to any additional alternatives that would safeguard our interests," the letter stated. "As you are well aware, under our agreements with Port Authority, we lease substantially all of the Plaza and Concourse levels of the World Trade Center site and our approval is required for any changes to the site or for any new redevelopment." The letter's contents were first revealed in the New York Post in early April. According to Mr. Lowy, the company still has not received any response.

Port Authority sources admitted they had not yet made a reply to Westfield, and dismissed speculation that their relationship with the company had deteriorated.

"The Port Authority has a cooperative working relationship with Westfield, and we fully expect that relationship to continue," Port Authority spokesman Greg Trevor told The Observer . "Throughout this process, the Port Authority has encouraged and sought input from all stakeholders, including Westfield, regarding the rebirth of the World Trade Center site. That commitment continues."

Charles Gargano, vice chairman of the Port Authority and the head of the Empire State Development Corporation, suggested that more cooperation was needed from the tenants.

"At this point, I think everyone realizes that we have a different site there because of the … memorial taking up a large part of the site, which we should do and are doing," he said. "And then there will be transportation improvements. So the site is very different from what it was. We want to keep the partnership together, and hopefully move forward on the rebuilding of the site, but it's going to take the cooperation and flexibility of all the parties."

According to Mr. Lowy, however, it has been impossible to arrange a meeting with the Port Authority about Westfield's proposed changes to the Libeskind plan-a situation that Mr. Lowy said was becoming exasperating. He said he has had such meetings canceled even after bringing a negotiating team from Australia to meet with P.A. officials.

He added that the current plan calls for a retail layout "that the lease may or may not allow us to do."

Mr. Lowy characterized the March 14 letter as a last-ditch effort to make Westfield heard in the redevelopment process, and said even that measure hadn't produced results.

"The Port hasn't even written back to us, called us back," he said.

Mr. Lowy said that an in-house team of architects was working on plans for a retail concourse that utilize the basic elements of the Libeskind design, but declined to specify how extensively the team had changed the design.

"What we're asking the Port is for our internal guys to sit down with Libeskind and work this thing out together," he said. "We bought an asset from the Port, from a retail point of view, that was one of the best retail assets in the country …. And now we're presented with a plan that does something different. From our point of view, we need to make it more efficient for the retailer and more efficient for the consumer."

Mr. Lowy did explain why some portions of the retail layout in the Libeskind design presented problems for his firm. Westfield has been characterized in previous reports as insisting on replacing all of its square footage in one contiguous arrangement, allowing customers access to the entire retail complex on a single level. Such an arrangement increases overall foot traffic in front of the retail establishments and therefore increases sales volume.

"The issue on contiguous space is this: Originally, what we bought, 80 percent was a contiguous underground mall with 150,000 people going through it every day, and did $900 a square foot a year of sales for the retailers," Mr. Lowy said. "Clearly that is not reproducible, and we understand that. What we are trying to talk to the Port about is having the most efficient form of retail that is available with the restrictions that are there."

He said the current plan breaks up the retail space too much and gives it too little profile for pedestrians and commuters.

"There's [retail space] underground, at street level, and two and three stories above the street," he added. "There's not great visibility … and the flow of the retail is more difficult now. The key is how it integrates into the transportation system. We never said we had to have a specific amount of contiguous space underground. [But] the more contiguous, the better, and the more connected to transit, the better. If you have a street and cars and traffic, for the consumer to be able to make it across is harder-especially if there are cars-than if you have a pedestrian walkway."

Mr. Lowy said that his company found the Port Authority's posture puzzling, given the imminent requirement to renegotiate the lease with Westfield before any substantial rebuilding begins.

"No matter what, the leases have to be renegotiated sooner or later, even to put Greenwich Street through the site," he said, pointing specifically to the restoration of streets through the site that have been the cornerstone of the redevelopment plans. "We have the lease over the land. So to put this [street] through, the leases have to be renegotiated. I don't think they've even focused in on it."

Civic Outrage

This isn't the first time that Westfield has chafed at the redevelopment process.

Westfield was given a presentation by Mr. Libeskind and the New York–based "THINK" team headed by architect Rafael Viñoly. The two finalists in the design competition for the rebuilding at Ground Zero, Westfield sources said, had paid little attention to the company's retail needs at the site. One Westfield source said that company representatives had felt "lectured at" by Mr. Libeskind in particular.

Meanwhile, Westfield's behavior has sparked outrage from some civic groups.

"I trust that Westfield is the expert on how to design retail to maximize revenue; I don't doubt that for a second," said Jeremy Soffin, a spokesman for the Regional Plan Association, a vocal and powerful civic organization in the rebuilding effort. "But that is not the primary concern here. Decisions need to be made based on the best interests of the city and region, not the best interests of the leaseholders." Mr. Soffin added that these interests include "revitalizing the entire district, creating an appropriate and moving memorial space, [and] creating civic amenities downtown."

Westfield's relationship with the Port Authority may become a moot point, if plans are realized for the Port Authority to swap the W.T.C. land with the city for the land beneath Kennedy and LaGuardia airports.

Recent reports have indicated that land-swap negotiations are coming closer to a resolution. Part of the swap would include a cash payout to the city that would reflect the back rents the city believes it's owed by the Port Authority from profits generated at LaGuardia and Kennedy airports. The amount of that payout has been an item of contention, but the two sides were said to have come closer to a mutually agreeable figure in the $500 million to $600 million range. (The city had initially sought as much as $900 million to $1 billion.)

One Port Authority source familiar with the negotiations said the agency has come to believe that Deputy Mayor Daniel Doctoroff has become increasingly unsure about the feasibility of the swap.

"Every time we come really close, he backs off and makes another demand-which means that he's unsure about it, and that's the bottom line," the source said.

The most recent of those demands is that the city maintain control over the way the airports are run, even when the land is owned outright by the Port Authority. The P.A., it has long been said, is unlikely to accept a deal in which its control of the airports is compromised. Even so, the city's negotiators, led by Mr. Doctoroff, are insisting upon maintaining some kind of control over the airports, responding in part to criticism from elected officials in Queens and elsewhere of the plan.

But the Port Authority's enthusiasm for the deal also remains unclear. Governor George Pataki, who controls the appointments of half the Port Authority's board of commissioners, which would have to approve the deal, is said to support a swap. Mr. Seymour, a Pataki appointee, has spoken hopefully, if vaguely, about a deal that he said would either be rejected or in place by July.

But New Jersey Governor James E. McGreevey, who controls the other half of the Port Authority's board, was still not publicly supporting the measure.

"We just haven't seen the numbers at this point to indicate whether it is a good deal for the State of New Jersey," said Micah Rasmussen, a spokesman for Mr. McGreevey.

He said that the basis for the valuation of the land (both the World Trade Center site and the two airports) that was used as the starting point for negotiations was still unclear to the Governor.

"One of the things that our leadership at the Port has asked for is a detailed explanation of what the appraisals of the land were based on, what information they used," Mr. Rasmussen said. "Those are the kinds of details we need to have to make a determination as to whether we support it."

Mr. Silverstein, who headed a consortium that signed a 99-year lease on the site six weeks before the terrorist attacks of Sept. 11, has asserted his right to rebuild without reducing the 10.5 million square feet of office space or 600,000 square feet of retail space that existed in the complex. That condition has vexed rebuilding authorities, who must also set aside property for a substantial memorial, a massive transit hub and a restored street grid on the 16-acre site.

But now, sources say, there has been progress in talks between the Port Authority and Deputy Mayor Daniel Doctoroff about a proposed swap that would trade the 16 acres at Ground Zero, owned by the Port Authority, for the land beneath Kennedy and La Guardia airports, owned by the city and leased to the Port Authority. Those talks are part of an ambitious scheme to wipe the slate clean at Ground Zero, allowing the city to remove many of the conditions written into Mr. Silverstein's lease with the Port Authority.

It's a strategy that could drastically alter plans for the site, provided the city can persuade Mr. Silverstein and Westfield America, the American arm of the Sydney-based global megamall developer Westfield, to give up their leases. Port Authority executive director Joseph Seymour has said that talks on the land swap would continue through the spring and reach a resolution by the summer.

Mr. Silverstein has said he doesn't particularly care if the city replaces the Port Authority as his landlord, but the pressure on him to abandon his claim on Ground Zero is likely to intensify if Mr. Doctoroff has his way at the site.

While there is little more than hushed discussion of the topic, the city would appear to have the option of condemning Mr. Silverstein's lease if it took over the deed. While there is some disagreement on the matter in legal circles, the Port Authority has asserted that since the bistate agency was created by an act of Congress, neither the city nor the state government can condemn land it controls. If the city held the deed, that would no longer be the case. The leaseholders would have to be given fair market value for the property-which several sources have currently estimated at $1 to $2 billion-but could be compelled to leave if a public benefit would be secured by kicking them out.

That severe approach is unlikely. The scenario laid out by Port Authority sources is more complex: The city would obtain the deed to the World Trade Center, along with a one-time payment still under discussion, in exchange for the land under the airports. The one-time payment that Mr. Doctoroff is proposing-which would reflect back payments on the Port Authority's lease on the airports-is somewhere around $900 million to $1 billion. Most likely, the city would attempt to buy the leaseholders out of Ground Zero with those funds, rather than forcing their hand with a condemnation procedure.

According to Swiss Re Inc., the lead insurer on the World Trade Center, the insurance proceeds from the destruction of the towers would then revert to the city, after some payouts were made to Mr. Silverstein, the Port Authority and Westfield.

"There are stipulated insurance parties: Silverstein, the Port Authority and others," said Swiss Re chairman Jacques Du Bois. "What would have to happen is, in buying out Silverstein, they'd have to include that [the city] would have the right to the insurance proceeds."

That money would then be used to implement Mayor Bloomberg's plan for lower Manhattan, released last year, and to provide infrastructure improvements in and around the World Trade Center site to attract development of an unspecified nature-but without the specific requirement of 10 million square feet of office space or 600,000 square feet of retail space.

Mr. Doctoroff has attracted criticism from Mr. Silverstein for meeting privately with Swiss Re executives to discuss the insurance payouts expected on the property. Mr. Dubois has suggested that the insurer would offer a more generous insurance settlement if the city were the client rather than Mr. Silverstein; litigation between Mr. Silverstein and Swiss Re over his insurance payout has become that heated.

But in recent appearances, Mr. Silverstein has attempted to highlight his personal connection to the World Trade Center site. As part of a public-relations blitz that is now largely over, Mr. Silverstein appeared on Charlie Rose on Feb. 27 and reminisced about his longtime attachment to the site. "I always say to myself," he told Mr. Rose, "since I've spent this enormity of time and had this major commitment to rebuilding, having suffered what I suffered, what purpose is served by taking me out?"

Mr. Silverstein told Mr. Rose about the day in 1987 that construction was finished on 7 World Trade Center, the only portion of the site that Mr. Silverstein has an uncontested right to rebuild. (Construction has begun, even though no tenant has promised to move in.)

"Looking up at this major building that I had just built, the Twin Towers dwarfed it," he said. "And I thought, 'Wouldn't it be wonderful to some day own that real estate?'"

Five years later, in the final phases of the bidding process for the 99-year lease, Mr. Silverstein was crossing the street at the intersection of Madison Avenue and 57th Street when he was struck by a drunk driver. His pelvis was shattered. The dizzying final days of preparing his company's bid on the World Trade Center were spent in a hospital bed, surrounded by paperwork and advisers.

"I remember lying there," he said. "I said to the doctors, 'Can you reduce the morphine?'"

After a last-minute breakdown in the front-running bid, Mr. Silverstein's team won by a hair. His son, Roger, and his daughter, Lisa, were working for him in temporary offices on the 88th floor of the W.T.C. north tower. Regular meetings with tenants in the weeks immediately following their July 26, 2001, takeover of the building were held each morning at Windows on the World. But on Sept. 11, Roger and Lisa Silverstein were running late. Meanwhile, Mr. Silverstein's wife of 46 years had laid down the law: The developer could not cancel an appointment with his dermatologist, even to meet with tenants at his most important property. If the attack had happened just a little later, Mr. Silverstein's children would likely have been trapped at Windows. As it was, Silverstein Properties lost four employees in the attack, two of whom had just recently been hired.

At a meeting on Sept. 12 with his public-relations adviser, the developer outlined his public statements about the destruction of the World Trade Center.

"It is not hyperbole," notes from that meeting read, "to suggest that what Larry says and does in the next several days will become part of American history. He needs to display his patriotism, his vision and his humanity."

But it appears that aside from displaying those qualities, Mr. Silverstein was unclear about rebuilding as of Sept. 12. The notes outline three positions. The first was a vow to rebuild: "It will again stand as a symbol of not only this city but against tyranny and evil." The second was to rebuild, but to put a distinctly populist cast on the effort: "The WTC is no longer a real estate site that belongs to a corporation-it belongs to the people of this nation. As a result a national crusade will be undertaken that allows us to rebuild this symbol of American pride and determination where the people of this nation are equal partners in this effort." The third way: "It is inconceivable that we could rebuild a place of commerce on land that has become drenched with the blood of American patriots. It needs to be consecrated much the way Gettysburg and the [U.S.S.] Arizona are now."

Within days, Mr. Silverstein had dispensed with the third option entirely and publicly vowed to rebuild the Trade Center. What's more, he has asserted his "absolute right" to be the sole developer of the site, and has asserted a right and an obligation to replace every single square foot of the office and retail space that was lost on Sept. 11.

Payout Unclear

He often repeats that his insurance proceeds-currently tied up in a Jarndyce v. Jarndyce –style lawsuit that will determine whether the attack constituted one or two "occurrences" for legal purposes-are the only independent source of funds for rebuilding. But it is unclear what Mr. Silverstein will receive. His insurers claim that the payout is far lower than he's been suggesting. If they win their case and a jury rules that there was only one occurrence, the total payout will be $3.5 billion. But Mr. Silverstein's debt on the site will eat into that significantly. Of course, if Mr. Silverstein wins, he gets just under $7 billion.

When that prospect seemed the likely outcome-the State Attorney General's office has filed an amicus brief suggesting that the developer's interpretation of his insurance policy is the correct one-keeping Mr. Silverstein around seemed a necessity. Why forgo all that rebuilding money?

But with Swiss Re's suggestion that a settlement reached with the city would be more generous than a settlement with Mr. Silverstein, that incentive is weakened. It's no wonder that Mr. Silverstein is made nervous by Mr. Doctoroff's private meetings with Swiss Re-though Mr. Doctoroff has claimed that they were nothing more than meetings with parties interested in the rebuilding efforts.

Then, too, Mr. Silverstein has been systematically alienated from key elements of the rebuilding process. His own architects, Skidmore, Owings & Merrill-hired before Sept. 11 to revamp the Trade Center's public spaces and make them more attractive to tenants-found themselves in the difficult position of having to compete with other firms to develop a public design for the World Trade Center site, even as they were developing their own plans directly for Mr. Silverstein. They teamed up with a group of artists and others to develop a plan.

According to sources familiar with the situation, Skidmore was approached by key members of the Lower Manhattan Development Corp. shortly after the second round of nine plans was introduced to the public, and told that it was time to start working on real site designs with Mr. Silverstein and the LMDC. Skidmore eventually withdrew from the competition, but asked that its partners on the project be allowed to remain in the competition without them. The LMDC then announced that they were being removed from the competition.

Now, Skidmore's position is unclear. The site design by Daniel Libeskind has been chosen, and the Libeskinds have met with the lead partners on the World Trade Center project at Skidmore and with Stan Eckstut, who is performing an independent study of the site for the Port Authority. Mr. Silverstein has publicly endorsed the Libeskind plan, and it appears that he-through Skidmore-and Mr. Libeskind will work on the project together. The relationship is by all accounts amicable and cooperative, but its ambiguity is telling.

And not everyone on Mr. Silverstein's team is happy with the current situation. Sources familiar with Westfield's position have said that in meetings with Mr. Libeskind, they felt "lectured at" about how the retail space on the site should be arranged to contribute to a sense of street life. Westfield is pressing for a large, contiguous (and unpopular) retail space, much like the retail complex below the original Twin Towers.

Not Ready to Deal

While Westfield shares Mr. Silverstein's agnosticism about who controls the site, the Port Authority or the city, sources said that unlike Mr. Silverstein-who has indicated a willingness to swap some office space on the site for other space nearby-the company would not consider swapping out of the site, where 150,000 PATH passengers passed through its concourse each day.

And though Mr. Silverstein has attempted to avoid difficulty over the Port Authority's proposal to build a terminal for tour buses on the footprints of the Twin Towers-beneath the proposed "memorial pit" that is central to Mr. Libeskind's design-the proposal has nevertheless become a hot-button issue.

The Port Authority insists that the hundreds of tour buses expected in lower Manhattan daily when the Trade Center is rebuilt will need someplace to be stowed. The P.A.'s proposal is repugnant to many-including some of the architects working on Mr. Silverstein's team, as well as bereaved family members and many who have called for the preservation of the tower footprints-but it has become a rallying cry for lower Manhattan residents sick of their bus-choked streets, and for businesses near the site that see the drop-off point as a magnet for business.

What happens at Ground Zero may well depend on when, and how, the place is defined more than how it's designed. Is it, as Mr. Silverstein has suggested, a symbol of pride that must be rebuilt as the mountain of commerce it once was? Or is it, to paraphrase another option his advisers suggested the day after the terrorist attack, no longer a real-estate site that belongs to a corporation, but one that belongs to the people of the city?

When seven teams of architects were selected in December to develop plans for Ground Zero, New Yorkers unaccustomed to the kinds of pitched battles that accompany any serious development project here might have assumed that one of the nine plans presented would be realized, and that the architect behind that plan would design the first huge project of the new century. The public's reaction to the competition has been resounding, and rarely has a project been as accessible to New Yorkers. In 50 hearings, on the redevelopment authority's Web site-which has had eight million hits since September-in over 20,000 written comments and 400 entries from architects, the public's voice (whether it was actually heeded or not) was heard.

But on Feb. 4, in the offices of the Lower Manhattan Development Corporation, two architectural teams were presented as finalists in the competition: Berlin-based Studio Daniel Libeskind and the New York–centric team that calls itself THINK, and whose figurehead is local architectural powerhouse Rafael Viñoly. After responding to a series of requests for modifications to their designs over the next two weeks, one will emerge as the architect of the rebuilt World Trade Center.

Whether or not the vision of that architect translates into real buildings erected at Ground Zero over the next decade may not be a matter for the public to decide.

If the architect selected by the LMDC and the Port Authority is really to leave his stamp on the World Trade Center site, the LMDC will have to back up its claim to be the ultimate authority in the rebuilding process. There are competitors: The Port Authority, which owns the site, and real-estate developer Larry Silverstein, who holds the 99-year commercial lease on the site and may, as part of his lease and insurance agreements, have the right to rebuild Ground Zero. Each of these parties has architects, too.

Mr. Libeskind has admitted that the political situation is complicated, but he was all excitement after it was announced, to nobody's real surprise, that he had moved into the final round of the competition.

"It's an honor and a privilege, and a tremendous responsibility," Mr. Libeskind said as he was leaving the offices of the LMDC late on the afternoon of Feb. 4. Mr. Libeskind said that there were questions about infrastructure and technology in his design that would have to be answered, and he expected that more changes to his plan would become necessary in the next few weeks as other concerns were raised by the Port Authority, the LMDC, the city and the state.

Over the next month, Mr. Libeskind and the THINK team will adjust their plans in answer to the LMDC and the Port Authority, hoping to be the one finally chosen, later this month, to stick around for the entire rebuilding process. Most people connected to the redevelopment believe the process will take at least 10 years. And they will not be easy years at Ground Zero. LMDC board member Diana Taylor, arguably at the head of a field of candidates to replace Lou Thomson as LMDC president, acknowledged that at times the redevelopment had been a "contentious process"-perhaps a refreshing signal of openness and plain dealing. But her admission also discloses a frustration that many close to the rebuilding effort have registered, and one that becomes stronger on days like Feb. 4, when a milestone of progress appeared to have been reached.

"The rebuilding process has become so convoluted that it's difficult to know what to make of the selection of the two design teams," said Robert Yaro, president of the Regional Plan Association and chairman of the Civic Alliance to Rebuild Downtown. "Both teams clearly represent some of the world's most talented architects, but it's not apparent what they'll be asked to do or what impact they'll have on the final master plan.

"What we need is a clear decision-making process that incorporates public input every step of the way," he continued. "Now, it's impossible to tell who is making the decisions or what the process is for the next six days, not to mention the next six weeks or years."

There is little doubt that the Port Authority-notorious for flouting public opinion in its development strategies-is not the agency for that job. But that doesn't mean the P.A. will disappear from the process. Two representatives of the Port Authority of New York and New Jersey sat on the panel that selected the architects in a late afternoon meeting on Feb. 3-and architect Stanton Eckstut has been drawing up his own Ground Zero plans for the Port Authority, away from the prying eyes of the public. In one way, that makes perfect sense: After all, the World Trade Center site doesn't belong to the city or the state, but to the Port Authority, which would seem to give the P.A. a strong claim to lead the rebuilding effort. The agency is not shy about its position: Last April, when the LMDC's planning czar, Alexander Garvin, quietly circulated a request for proposals among a select few dozen architecture firms in the first round of designs for the site, the P.A. forced him to withdraw it and then to recirculate it with the twin imprimaturs of the LMDC and the Port Authority.

The Lease Question

There is also Larry Silverstein, the developer who held the 99-year commercial lease on the World Trade Center. In recent days, Mr. Silverstein, in letters to stakeholders in the W.T.C. site, has asserted his position in the rebuilding process. He points out that he is still making lease payments on a property that is profitless, that the insurance proceeds for the loss of the physical properties of the site will be controlled by his consortium, and that the insurance payout constitutes the only nonpublic source of funding for the rebuilding effort.

His response to the Libeskind / THINK announcement was not overly enthusiastic.

"We will be watching the process over the next several days in order to assure that the plan is feasible, meets the demands of New York and respects our rights," Mr. Silverstein's spokesman, Howard Rubenstein, said.

How involved Mr. Silverstein will be in the rebuilding, however, is a matter of debate. At the Feb. 4 meeting where Mr. Libeskind and THINK were introduced as finalists, Chelsea Piers developer and LMDC board member Roland Betts told reporters that Mr. Silverstein would be working with the architects to reconcile his program for the site with the two finalists'. But Mr. Silverstein, in his letters, said that none of the designs meets his specifications. What's more, the firm Skidmore, Owings & Merrill, which made its own entry in this design competition but pulled out, has been working privately for Mr. Silverstein to develop its own version of the W.T.C. site. Mr. Silverstein has argued that his lease arrangements with the Port Authority give him the right to rebuild what he lost according to his and the Port Authority's specifications, and that the right to choose an architect belongs to him.

That, according to Mr. Yaro, remains an open question.

"We are convening a group of experts, along with [the Municipal Arts Society], to study the details of the lease and insurance agreements to determine the financing issues related to rebuilding," Mr. Yaro wrote in an e-mail. "It is clear, however, that no one anticipated the complete destruction of the towers, and that at the very least some negotiation will be required. In the end, the people of this region will demand that whatever is built on Ground Zero memorialize those we've lost and catalyze the revitalization of the entire district. At that point it will be difficult for Larry Silverstein to point to lease agreements and make unreasonable development demands."

According to Jacques Dubois, the chairman of Swiss Re American Holding Company, which insured 22 percent of the World Trade Center, Mr. Silverstein's public avowals of a commitment to rebuilding are an elaborate hoax. Mr. Dubois' company is in the midst of an increasingly nasty battle with Mr. Silverstein over whether the two planes that struck the World Trade Center towers constituted one or two separate attacks for insurance purposes. The difference between the two payouts would be over $3 billion-money Mr. Silverstein would desperately need to rebuild. Swiss Re is fighting him on it, and in briefs submitted to the Second Circuit Court of Appeals, Swiss Re attempted to paint Mr. Silverstein's campaign as tainted from the beginning.

"Within 24 hours after the tragic loss of nearly 2,800 lives, World Trade Center leaseholder Larry Silverstein developed plans to spin the facts for the sole purpose of maximizing his personal financial gain," a press release distributed by Swiss Re on Feb. 4 read. The brief cites a meeting memo written by Mr. Silverstein's spokesman, Mr. Rubenstein, dated Sept. 12, 2001.

In it, Mr. Rubenstein runs through a series of possible responses to the disaster and includes quotes that can be used to advance each argument. Under the heading "Positions for Discussion and Consideration," Mr. Rubenstein proposes, first, that "the WTC will be rebuilt. 'It will stand again as a symbol of not only this city but against tyranny and evil'"; second, that "the WTC will be rebuilt in partnership with the people of America. 'The WTC is no longer a real estate site that belongs to a corporation-it belongs to the people of this nation'"; third, that "the WTC will not be rebuilt. 'It is inconceivable that we could rebuild a place of commerce on land that has become drenched with the blood of American patriots.'"

Mr. Dubois characterized the three positions as cynical.

"What he was attempting to do was cynically figure out options which would each advance Silverstein's financial interest," he said. "They were thinking about what they would like to be done on the site. You have to remember, immediately after 9/11, all the insurance experts that worked for Silverstein acknowledged that this was one occurrence."

"Swiss Re's remarks are a cynical and manipulative attack on Silverstein Properties' efforts to collect the insurance bought and paid for on the World Trade Center, and in turn, an attack on the rebuilding of lower Manhattan," Mr. Rubenstein said in a statement. "To compensate for the weakness of their legal position, Swiss Re has engaged in a scurrilous personal attack on Mr. Silverstein and his legal counsel, and has twisted the facts. The barrage of misleading press releases by Swiss Re reveals the depths of its concern about its case."

Mr. Silverstein's hold on the site has spawned other contenders as well. After designs for the site unveiled in July drew widespread criticism, Deputy Mayor Daniel Doctoroff floated a plan in which the Port Authority would trade Ground Zero to the city in exchange for the land beneath the two city airports that the Port Authority currently leases. The swap was considered unlikely and had foes in Albany, but now is reportedly back on the table. If the city became the owner of the site, it might be able to renegotiate Mr. Silverstein's leasehold on the property. What's more, if the city were the owner of the site, the Port Authority would be knocked out of the rebuilding process entirely, removing at least one faction.

According to one source, "the city seems to still be pushing hard for this, but I think they're being patient, in the belief that the process will shake out in such a way as to benefit their bargaining position. Supposedly they're still a ways off on dollar figures."

If it's a bluff, you wouldn't have known that at the Feb. 4 meeting when, shaking the hand of Port Authority executive director Joseph Seymour, Mr. Doctoroff said to the crowd, "We're just shaking hands on the agreement on the land swap.

"That was a joke," he added.

-Additional reporting by Alex Watson

May Create Double Terrorist Target

For years, Community Board 4 has been involved in the planning and design of a state-of-the-art commuter ferry terminal on Pier 79, at the end of West 39th Street. Following the attack on the World Trade Center, when ferries were the only way home for thousands of commuters stranded in Manhattan, a new terminal and increased ferry service have seemed that much more important. But another post-9/11 reality has recently raised some concerns about the location of this Hudson River terminal.

The glass pavilion of the six-slip, $30 million terminal will wrap around two ventilation shafts for the Lincoln Tunnel, an entrée to Manhattan that has the dubious honor of consistently topping the city's short list of potential terrorist targets. And at Board 4's December meeting, members questioned the wisdom of increasing the incentive for would-be terrorists by piling another public-transportation hub on top of what is already one of Manhattan's infrastructure lifelines.

"The fact that we're now providing [terrorists] with a double target … makes it a more valuable target," board member Frank Eadie said at the meeting. The effects of an attack would be greatly magnified, he explained: "You basically shut down the ferry service, which is what kept the city going after 9/11, and you take out a tunnel shaft."

The new West Midtown Ferry Terminal is part of a $300 million citywide ferry project that also includes the renovation of the Staten Island Ferry's Whitehall and St. George terminals, a new floating terminal at the World Financial Center, and a new Port Imperial Intermodal Ferry Terminal on the Hudson River in Weehawken, N.J. Although planning for this project was in place long before 9/11, the key role that ferries played in evacuating downtown on the day of the attacks-and the fact that daily ferry ridership has nearly doubled, from 32,000 to 55,000, with the loss of the World Trade Center PATH line-have given the project added impetus.

Construction on the new West Midtown Ferry Terminal is slated to begin in the middle of 2003. Once completed, half of its slips will be operated by the Imperatore family's ferry empire, NY Waterway. Since federal dollars are the primary source of funding, the terminal will be subject to strict competition regulations, which means that NY Waterway will be required to open the remaining slips to other operators. In addition, the company will be forced to close down its existing Port Imperial ferry terminal, on Pier 78 at 38th Street, in order to avoid competing with the new, federally funded facility, which will be twice as large.

Designed by William Nicholas Bodouva & Associates, the terminal will have a glass-enclosed main waiting room, curving vestibules on either side of the 145-foot Lincoln Tunnel ventilator shafts, and an elevated walkway for pedestrians over the ferry slips.

"Just about everything about this ferry terminal has met with our approval," John Doswell, co-chair of Board 4's waterfront and parks committee, told board members. However, concern about the terminal hugging the Lincoln Tunnel ventilator shafts prompted Mr. Doswell's committee to draft a letter asking the federal and state agencies involved in planning the project to consider the security issue.

The letter also suggested an alternate location for the new terminal: at West 34th Street, where a temporary terminal might be built in conjunction with an Olympic stadium on the West Side railyards. Since Board 4 thus far hasn't taken a formal position on the stadium, however, members were hesitant to send a letter favoring a stadium ferry, since it might give the appearance of favoring the stadium by association.

Other Board 4 members thought that the piggybacking of the shafts and the terminal was just par for the course on a crowded island. "The Holland Tunnel shaft is on a public pier," board member Joe Restuccia told the board. "This is a dense city, with lots of things right next to each other." Still others thought the worrying should be left to the powers that be, such as the Port Authority of New York and New Jersey. "If anybody's acting paranoid after 9/11, they are," said board member Ed Kirkland, referring to the P.A., "and they're not concerned about [this terminal]."

The Port Authority, which operates the Lincoln Tunnel, says it has security in hand. "There has been additional security put in place since 9/11, and we believe that's adequate," Port Authority spokesman Steve Coleman told The Observer. "But we can't talk about the specifics."

After lengthy debate, Board 4 scrapped its letter and sent it back to committee for a rewrite. However, a rewrite has since been abandoned, since the period for public comment on the project has come to a close, and also because the board feels comfortable that the agencies in charge are aware of the potential problem. "Other people have written letters," Mr. Doswell told The Observer. "I know it's been brought to their attention."

Meanwhile, the city's Economic Development Corporation, which is spearheading the citywide ferry project, will be putting the additional post-9/11 federal funding available for terminal security to use. "We're installing security cameras and vehicle barriers and, in addition to that, we're working with a security adviser to advise us on what else we should be doing at that terminal, Whitehall and the new ferry landing on the East River," E.D.C. spokeswoman Janel Patterson told The Observer.

-Karina Lahni

Jan. 15: Board 8, Memorial Sloan-Kettering Cancer Center, 430 East 67th Street, 7 p.m., 758-4340.

Jan. 16: Board 9, Community Board Office, 565 West 125th Street, 6:30 p.m., 864-6200.

Jan. 21: Board 1, St. John's University, 101 Murray Street, 6 p.m., 442-5050; Board 11, La Guardia House, 307 East 116th Street, 6:30 p.m., 831-8929.

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.'