Zuckerman Bows Out of 1 W.T.C. Race
Eliot Brown May 24, 2010, 6:26 p.m.
Mort Zuckerman is out of the running for the country’s tallest building.
Boston Properties, the real estate firm which the Daily News publisher chairs, on Monday pulled out of a three-way race to buy a stake in One World Trade Center, according to multiple government officials and a real estate executive. Mr. Zuckerman leaves behind just two to battle for the giant glass skyscraper previously named the Freedom Tower, currently under construction downtown: Stephen Ross, chairman of the Related Companies and the developer of the Time Warner Center; and Douglas Durst, developer of the Bank of America Tower and 4 Times Square.
Boston’s rationale for dropping out after five months of talks is not entirely clear, and in a letter to the Port Authority of New York and New Jersey, which is developing the tower, Boston Properties senior vice president Robert Selsam was brief.
“Given the increasing scale of our own corporate activities, upon reflection we have decided it is best if we withdraw from further consideration,” he wrote in a three-sentence letter. (Mr. Selsam declined to comment beyond the letter.)
The next steps for Mr. Durst and Mr. Ross are to pitch the authority’s board of commissioners, where each are slated to give lengthy presentations to boost their bids, which call for about $100 million in investment in the tower. The authority is aiming to select one of the two in June.
The board has shown an intense interest in having influence in the selection, something of an unusual step at the agency, which, on smaller projects, typically chooses a winning bidder and then presents that choice to the board. The board is dominated by real estate executives, attorneys and others with political ties, split between appointments by governors of New Jersey and New York.
Earlier this month, in a meeting with board members, the Port Authority’s staff raised some concerns about Boston Properties’ financials in relation to the other two, according to a board member present. There was also discussion of narrowing the field to two bidders before the developers made presentations, according to that member, a concept that multiple people on the board disliked given that it would further narrow options.
A Port Authority spokesman, Stephen Sigmund, issued this statement:
Boston Properties has decided to withdraw from the Port Authority’s selection process for an equity partner in One World Trade Center. We have very much appreciated their participation and the process has benefited from such a high-caliber organization. The Durst Organization and Related Companies remain active participants in the process and we look forward to a private sector developer playing a significant role in the long-term success of the building.