Port Authority Punts Vornado, Brookfield From One WTC
Eliot Brown March 10, 2010, 10:24 a.m.
The race to sell off a portion of the Freedom Tower-officially, One World Trade Center-has kicked into a new gear.
The Port Authority, the New York-New Jersey-controlled bureaucracy that is developing the tower and shopping around an ownership stake, late last month dropped two developers vying to take a piece of the 1,776-foot tower, according to people familiar with the process. Out of the running: Steven Roth’s Vornado Realty Trust and Brookfield Properties, run by CEO Ric Clark.
That leaves four developers standing: Mort Zuckerman, Douglas Durst, Stephen Ross and Gerald Hines, who respectively control Boston Properties, the Durst Organization, the Related Companies and Texas-based Hines Interests.
The skyscraper is on the rise in Lower Manhattan, with a hulk of steel currently more than 200 feet above ground. With symbolism and security guiding its design and purpose, it is surely a money drain for the Port Authority, at least in the short run, and costs more than $3 billion, twice the price of the 2,716-foot Burj Khalifa in Dubai, where labor is cheaper.
Thus the agency, searching for the developers with brokerage Cushman Wakefield, wants to bring in some money-it’s looking for an investment of about $100 million to take a piece of equity-and to install a well-known developer as the public face of the tower.
Of course, this is not the first time the agency has tried to sell off a piece of the tower. Back during the Spitzer administration, Mr. Ross was in advanced discussions to put up capital and claim the tower for Related Companies as part of a different financing arrangement, according to people familiar with the discussions at the time. That plan fell apart, and two years later, here we are again.
In a statement, the Port Authority said it is “encouraged by the strong private sector interest” in the tower.