Street Art, ABC Campus, WTC and Warm Cookies With Larry Silverstein
Larry Silverstein’s name has become synonymous with the rebuilding of the World Trade Center, but the Silverstein Properties chairman has many other projects in the works.
At 120 Broadway, he is meticulously marrying the old world feel of a 1915 property with the needs of 21st century tenants; farther uptown, he’s planning the redevelopment of the soon-to-be-former ABC campus on the Upper West Side; and the firm recently threw its hat into the construction lending ring with the launch of Silverstein Capital Partners.
On a particularly rainy day in New York City, Commercial Observer caught up with Silverstein over hot chocolate and freshly-baked cookies (the best this reporter has ever tasted) at his office at 7 World Trade Center.
Commercial Observer: You’re in the middle of restoring 120 Broadway and recreating the former Bankers Club restaurant on the 40th floor. What was so special about it?
Larry Silverstein: It was an exquisite eating facility that was established in the building by the Equitable Life Assurance Society. By the time we bought the building in 1980 the club was closed, but I remember eating there and it was simply spectacularly beautiful—opulent. It was old world and had a unique charm, the food was excellent, the waiters were dressed just so.
Did they have a signature dish?
So many. [Laughs.] But ultimately the world changed, business changed and the pace of life changed. The club was closed in 1978 before we bought the building.
Which elements of the past are you recreating at the building?
What we’re doing today is bringing back a segment of the Wall Street dining experience. On the 40th floor we’re building a special facility for tenants to enjoy a light lunch or a refreshment during the course of the day. In the lobby we’re also creating an exact replica of what the building looked like when it was first built in 1915. We’re restoring the building to its original magnificence and making it shine all over again. It’s a historic landmark, it’s unique and special and it’s totally different from the buildings of steel and glass that we’re building at the Trade Center. I think more and more people are expecting to have a different experience over the course of their work day, and if we can provide that for them then all the better. And why not?
You recently received Urban Land Institute New York’s Visionary Leadership in Land Use award. What does this mean to you, in the context of your work at the World Trade Center?
Is it visionary? I suppose so. Is it an achievement? Sure, I suppose so. Where the hell the time has gone? I don’t quite know. But we’ve spent 17 years since 9/11 rebuilding the Trade Center. I acquired the Twin Towers six weeks before 9/11, and so the circumstance was obliterating from the standpoint of eliminating the buildings we had acquired for $3.2 billion. It changed my life and the direction of my life, because the next 17 years required a hugely intensive focus on anything and everything to do with respect to rebuilding the Trade Center.
Where did you begin?
One of the first things we had to do was to try to recover the multiple billions of dollars that would be needed to rebuild as it turned out that we had to litigate with 22 insurance companies. That ultimately produced court verdicts in our favor and enabled us to collect $4.5 billion, although that turned out to be totally inadequate in terms of rebuilding—but that’s besides the point. The last building to come down on 9/11 was 7 World Trade Center, and that was the first one to go back up. We finished this building in 2006; 1.7 million square feet, designed by David Childs of Skidmore, Owings & Merrill. He did such a superb job for us that I asked him to also design Tower 1 as well—at that time it was called The Freedom Tower of course. We subsequently did Tower 4 with [architect] Fumihiko Maki. Shortly thereafter Tower 1 was completed in 2014 and then we finished Tower 3 [at 175 Greenwich Street] just a few months ago and it’s 2.5 million square feet. So now, we’re deeply involved in negotiations for Tower 2 [at 200 Greenwich Street], which will be 2.8 million square feet. End of day, it’s been a labor of love, a major personal commitment to rebuild it and it’s been a fascinating study in human nature.
What did this experience teach you about human nature?
It taught me a lot through dealing with different public officials. Over the course of the past 17 years, we’ve dealt with five or six governors of the State of New York, and easily the same number for the State of New Jersey because the Port Authority [of New York & New Jersey] covers both. I’ve dealt with three mayors but primarily with Mayor [Michael] Bloomberg who was just terrific—absolutely fantastic. Plus a whole series of Port Authority executives.
Every time a public official would enter office they would always say, “Stop [building]. I want to see what is going on, I want to be sure [before we proceed].” But the one thing I came to recognize is that you can’t have these 50-,60-,70- and 80-story buildings going up and then stop in the middle because a public official says, “I want to see what’s going on.” It just doesn’t work that way.
Each elected official had his or her own agenda and sometimes those agendas were laudable because they were concerned about the public good. Sometimes the agendas were not laudable. So it was very interesting to see the attitudes of different elected officials and the ebb and flow.
Before you started rebuilding did you have any time to just take a breath and pause? Or was it straight back to business?
It was straight back to business, and it didn’t stop. It’s still going [laughs]. I think it was about 2012 or 2013 that the pressure began to abate because by that time Tower 1 was well underway and Tower 4 was nearing completion. As soon as we knew we were about to finish Tower 4 we started on Tower 3. The memorial was open and they began construction on the Oculus. So things really began to come together. We saw a light at the end of the tunnel, which I was praying wasn’t a train moving towards me [laughs]. Here we are in 2018 with one tower left to go.
Has your World Trade Center vision been realized, so far?
It has been totally realized. We just have to finish Tower 2. And once that’s done then I’ll say, “Ok, I quit. I’m gonna find something else to do with my time.”
What will you do?
Well, I don’t know, because that will be 2022 and in 2022 I’ll be 91 years of age. But I’ll find something else.
What can the rebuilding teach future generations?
I would hope they will applaud the quality of what we’ve produced and the quality of the architecture. I think it’s timeless and the architectural language used in each building varies because each is designed by a different architect—the exception being Towers 7 and 1. Secondly, it’s been a public private partnership; the public aspect is that we’re building buildings that are owned by the Port Authority of New York & New Jersey, and I represent the private interest that literally owned the land. So it’s a public-private partnership [PPP] in the truest sense of the word. It has also produced a whole series of issues that you only get when you have a PPP.
Among the benefits is the fact that the experience is significant in size. We’re talking about what started out as a 15-acre site and ultimately became an 18-acre site. We had 10 million square feet of office space on this site. We’re also ending up with a magnificent memorial, which is appropriate considering that we lost almost 3,000 people that day.
There’s a negative aspect to PPPs because one of the realities is that public agencies like the Port Authority—they don’t deal with monetary issues the way that we do. They have the advantage of airport revenues, bus terminal revenues, tunnel revenues and so forth so they have continued sources of income that come in, but issues like time, value and money aren’t focused on to the same degree as they are when it’s your money. We watch every dime like a hawk; we watch every day of construction very closely. Because timelines are essential; schedules are absolute. Government never thinks that way.
Was that the biggest challenge while rebuilding?
Probably the biggest, yes. But it’s been a fascination. The fact that we’ve gotten to where we’ve gotten I think is pretty magnificent.
What’s your favorite aspect of the rebuilt World Trade Center?
If there’s anything that shows the resiliency, the determination and the fearlessness of New Yorkers, it’s the rebuilding of what has taken place here and what it represents in terms of attitude. The fact that we would not cower in light of what happened on that fateful day. The act that we came back and said, “Let’s go,” and we did, with tremendous determination. It’s a reflection of Americans in general and New Yorkers in particular. I hope that when all is said and done and we’re finished in 2022 that the world will look at us and say, “You did a pretty damn good job.”
Do you think your affiliation with Downtown during this time also encouraged you to move down here from the Upper East Side?
It’s an interesting thing. My wife said: “You know, you have so much invested in the Trade Center, you need to diversify.” So I came home a couple of weeks later and I said, “Honey, I just diversified.” She said “What did you do?” I said, “I bought another piece of land. Over there.” [Points out of the window towards the Four Seasons Hotel at 27 Barclay Street]. She said, “That’s not diversification.” I said, “It is, it’s a whole block north of the Trade Center!” We built the Four Seasons Hotel on the site and the Four Seasons luxury condos above it. We decided to move to one of those luxury condos at the top and the view is fantastic.
Does your wife like it?
She loves it.
Phew. I understand that you’re a fan of street art and that some of it is finding its way into World Trade Center. How did that come about?
When we finished the original 7 World Trade Center, I realized that I had put too much of the same marble in the lobby of the building and it looked like a mausoleum. I remember saying to myself , “How could I do such a dumb thing?” I called my wife and said, “Sweetheart, come down here and take a look with me.” She came down and said: “Larry, it’s a mausoleum. Maybe you should try finding some contemporary art to change it.” So we starting looking. We found a piece by [abstract expressionist] Al Held, a major artist of that time [the late 1980s], a very graphic and hard-edged piece with lots of color and activity. Then we went out to find another, a piece by Lichtenstein. We proceeded to buy different pieces of art and developed a terrific collection in that lobby. Of course all that was destroyed on 9/11. The good thing is that we weren’t destroyed, but the art was gone.
I was admiring the Ran Ortner oil painting of the ocean in the lobby.
Oh, I love that one; his work is spectacular.
You also allowed artists to paint a floor in Tower 4, too?
We had an empty floor and we let a group of artists go up there and told them: “Paint to your heart’s delight.” And we let them paint the floors, the ceilings, the windows. One day the CEO of Spotify came in and we took him up to that floor and he fell in love with it. He ended up leasing 400,000 square feet of space there. Now we’re thinking about what we’ll do in Towers 3 and 2. We have street art on the containment wall around Tower 2, we gave the artists the opportunity to have exposure there, which is enormously important.
Switching gears to the Upper West Side, can you talk us through Silverstein’s $1.2 billion acquisition of the ABC Campus?
ABC decided to sell its campus and to move to new facilities; they outgrew what they had up there and needed something new and modern. When they decided to sell it I looked at that real estate and literally fell in love with it; I knew it was a magnificent piece of real estate that was worth buying for future development. They will stay in possession of the main campus—at 66th to 67th Streets on Columbus Avenue—for five years. At the end of those five years they will vacate and we can demolish the real estate and build a residential property. They have additional buildings that we’re also getting on West End Avenue at 65th to 67th Streets. The West End Avenue properties are different from the campus, and that real estate they will probably stay in possession of for three years. There we will develop in 2020 to 2021 and by 2024 we’ll have the residential buildings complete. The redevelopment of the main campus will take longer. We’re thinking multiple towers. But you’ll have to stay tuned to see what it looks like.
Why was Deutsche Bank a good fit for the loan?
We’ve worked with them in the past and when the opportunity came up their acquisition loan made it possible. It was not a difficult thing to accomplish, it all happened pretty quickly in fact.
You recently launched Silverstein Capital Partners. Why is now the right time to get into construction lending?
We came to the realization that we’ve built some very big structures over the past several years—large hotels, residential towers, major office properties and some of them were very complex buildings. We have the knowledge, the ability, the talent and we have the capacity to do all these things, so it became kind of obvious to join forces with two world-class institutional funds who said, “let’s provide this source of capital for construction loans because it’s an area you know very well.” So, we’re doing it.
When you’re assessing a project to lend against, what’s key for you?
Sponsorship is hugely important. Location is also very important, as is quality of design, as is price point. You have to put all these things together and use good judgment and common sense because it is construction financing and there is risk involved. You have to be dealing with competent people of good name and good reputation and those who have good track records. Construction loans for quality residential buildings make a great deal of sense for us, so that’s the stuff we’re focused on. And there’s lots of product to look at.
Any year-end goals?
Oh my goodness, we just want to have continued good health and keep moving forward, it’s all been so exciting so far and continues to be.