Retail Block

The announcements are coming one-by-one to seal up the April agreement between the Port Authority and Larry Silverstein–designs for the next three towers, a million square feet in commitments–but one promised element that you won’t see by Thursday’s deadline is any sort of conclusion about who will run the 428,000-plus square feet of retail space at the World Trade Center site.

In April, along with taking over the Freedom Tower, the Port Authority agreed to sell the retail operating rights to Silverstein. The problem with doing so was that the Port Authority had already promised to let Westfield, an Australian mall operator, bid on the retail rights first. Somehow, the Port Authority would have to reject Westfield’s offer, or issue such a discouraging prospectus that the mall company never would want the thing in the first place, all the while avoiding lawsuits.

Little wonder the Port Authority hasn’t worked this one out.

Westfield, for one, is acting as if it will not let go easily. “Westfield is working within the process and is having ongoing discussions with the Port,” spokeswoman Katy Dickey told us. “Westfield expects to exercise its right of first offer.”

Silverstein, meanwhile, is still interested. “The caliber of retail has tremendous influence on the whole project,” a real estate executive said. “The tenants upstairs want retail that is both high quality and also that will be useful to employees.”

This is not a deal breaker, at least not yet, however.

“We don’t see that as a barrier to reaching a final agreement this month,” said Janno Lieber, Silverstein’s project director for the World Trade Center site.

Matthew Schuerman

Retail Block