Deutsche Bank Demo Costs Grow Again By $20 M.; More to Come

Just off a smoke incident (there’s been a lot of these lately), the former Deutsche Bank building damaged in the 9/11 attacks faces further costs in the ever-ongoing attempt to deconstruct the tower.

On Thursday, the agency handling the job, the Lower Manhattan Development Corporation, is planning for its board to authorize another $20 million to be paid to contractor Bovis Lend Lease for deconstruction, bringing the total price tag to $173 million, according to documents provided to LMDC board members. The request is not for any additional public money, according to an LMDC spokesman.

The unending takedown of the tower has proved an extraordinary headache, as the job has been filled with tremendous levels of regulation from a series of federal, state and city agencies in part due to the potential for toxins associated with the 9/11 attacks. While it had been coming down relatively swiftly by mid-2007, a fatal fire at the time halted deconstruction, and the tower still stands at the same height (the contractors have been going through the lengthy abatement process first, before deconstruction).

And still the cost may rise.

The funding for the demolition costs is quite complicated, involving a web of insurers, the contractor, the state and the federal government, and, according to the LMDC documents, the government agency did not need any more money this time around—it just needed to authorize the $20 million contract.

But it seems that sometime soon, more funding will indeed be needed, based on a note in the board documents:

 “LMDC staff estimates that in the future, it will need to identify $30 to $35 million in additional funding from claims against Bovis, Deutsche Bank, the Prior Insurers, or a re-allocation of HUD funds.”

That appears to mean that once LMDC’s existing money for the project runs out and if it cannot retrieve any more money from insurers, it will need more money from the federal government, which is providing funding through the Department of Housing and Urban Development.

The note is also a portent of the lawsuits that are expected to come once the tower is down, as LMDC and HUD have said they expect that, through litigation, LMDC will try to recover some of the money it has spent from some of the other parties.

And this comes as Bovis, apparently, is having a whole other set of legal problems.

Deutsche Bank Demo Costs Grow Again By $20 M.; More to Come