Insurance Settlement Reached on Deutsche Bank Tower; Bovis Sues for $80 M.
Eliot Brown Feb. 24, 2010, 7:12 p.m.
The ever-troubled former Deutsche Bank Tower downtown at 130 Liberty Street is set to see new insurance money.
The Lower Manhattan Development Corporation, which is in charge of demolishing the building that was damaged on 9/11, is planning to announce a settlement Thursday with two insurers, AXA and Allianz, to bring an additional $38 million toward the project, according to a person familiar with information provided to board members. The agency has long been negotiating with the insurers, who also contributed money in a prior settlement. The total amount paid will now come to $102 million.
A spokesman for the LMDC declined to comment, and spokespeople for the insurers did not immediately respond to requests for comment.
The project has been a constant headache for government officials downtown, having taken years longer than ever imagined to bring down the onetime 40-story building, which, at various points, has been predicted to be down in 2007, 2008, 2009 and 2010. A broad array of factors have complicated its demolition–an extended search for human remains after 9/11, a fatal fire that killed two firefighters, environmental regulations, higher than expected costs, and a new technique to demolish the tower.
The demolition and its troubles have inspired a complex web of lawsuits, and just last week, Bovis Lend Lease, the contractor taking down the tower, filed papers in state court to recover $80 million from the LMDC (the initial filing is dated from October, although it was only filed into the court’s online system last week).
Based on an early 2007 agreement, the LMDC and Bovis had agreed to kick the questions over who should be responsible for certain costs down the road, with LMDC agreeing to front enough money to bring down the tower.
As such, LMDC officials have previously stated that they expected such suits, and that they, in turn, expect to sue Bovis or other parties in an attempt to recoup costs themselves.
From the suit:
Bovis therefore brings this action under Article 6 of the Supplemental Agreement within 45-days of completion of the abatement phase of the Project to preserve its rights and to establish its entitlement to retain the amounts advanced by LMDC for the Contested Work, and to establish its entitlement to all profit, overhead, and other amounts to which it is entitled
Update: 8:50 p.m.
Allianz spokeswoman Sabia Schwarzer emailed this statement:
Allianz Global Risks US Insurance Company is pleased to announce that it has reached a final settlement with the Lower Manhattan Development Corporation which resolves the LMDC’s claims arising out of the deconstruction of the 130 Liberty Street building. Allianz wishes to thank the LMDC for its professional approach in helping develop a constructive resolution of this claim. The claim resolution did not have any adverse impact on Allianz financial results as the settlement had been previously contemplated.
The Times also has a story on the agreement.