Durst Selected to Buy Stake in One World Trade
Eliot Brown July 7, 2010, 5:02 p.m.
Douglas Durst, the taciturn scion of a three-generation real estate empire, has been selected to buy a stake in One World Trade Center, besting in a bidding contest Stephen Ross, the aggressive developer who chairs Related Companies, according to an official familiar with the decision.
The board of the Port Authority, which is building the tower, today opted to designate the Durst Organization the winning bidder, although the firm still must undergo a 30-day period of negotiation with the authority to develop a contract.
Mr. Durst’s bid was viewed as more traditional than that of Mr. Ross, who pitched the building, once known as the Freedom Tower, as a destination that would be complete with amenities like fitness centers (akin to the Time Warner Center, which he co-developed).
Prior discussions involved Mr. Durst investing about $100 million in the deal, and then taking a portion of the upside of the investment. The tower itself is likely to be a money-losing investment for the Port Authority, given its tremendous cost of more than $3 billion, some of which is related to security measures.
It’s a rather fitting victory for Mr. Durst, given that the whole idea of the sale—selling off a stake in the tower—emerged from a meeting late last year between Mr. Durst and Port Authority executive director Chris Ward, according to multiple people familiar with the conversation. From there, the Port Authority reached out to a set of prominent developers, Mr. Durst included, to solicit their bids.
He also was a strong critic of the tower at one point, calling it in New York newspaper ads “the legacy of poor planning and decision-making by the Pataki administration.” (He apparently has come around.)
Update 5:15 p.m.
Jody Durst, president of the Durst Organization and Douglas Durst’s cousin sent out a statement, proclaiming “tremendous confidence,” in the tower’s “future success”:
We are very proud to have been selected by the Port Authority to work with them on the development of One World Trade Center
The building is a symbol of New York’s resilience and strength and we have tremendous confidence in its future success. The World Trade Center site is, perhaps, the most complex building project ever undertaken and the Port Authority’s progress on the construction of One World Trade Center is to be congratulated.
Update 5:25 p.m.
And here’s a statement from Mr. Ross, expressing disappointment:
While we are disappointed and thought we offered a great vision for this iconic destination development and Lower Manhattan we wish the Port Authority and their new partner well.
The Port Authority also sent out its official statement announcing the selection. The agency will have 30 days to negotiate, at which point it will have to come back to the board to receive final approval.
“We’re extremely pleased that some of the most prominent developers in the country saw market value in this world-class office tower, and engaged in an extremely competitive process for a stake in it,” Tony Coscia, chairman of the agency, said in a statement.