200 Greenwich Street - Proposed WTC Tower #2 - by Norman Foster

[RoldanTTLB]

Originally Posted by RandySavage

^Probably... but just look at Silverstein flailing for excuses in that article (changing of governors, lost wisdom of people who built the first wtc, etc.). Is the Calatrava Path station the "key infrastructure" project that PA is "years behind on" preventing him from starting building 2 & 3, but not 4 which is at ground level? It's probably easier to build Calatrava simultaneously with 2&3 but is it impossible to begin after the towers have started... probably not.

Most importantly, how many billions did he get in total from 9/11 insurance and where the hell was it all spent?!

I get the feeling Silverstein sees an opportunity to get a govt handout (it's all the rage these days) and he's grabbing at an opportunity to maximize his upside while the coffers are still open? Insatiable avarice.

There's something pretty sick about suggesting he should just keep hemorrhaging money and that by trying to make money, or even break even he's straight up greedy. The 300k a day fine against the PA didn't cover Silverstein's daily rent on the site. He's on the hook for that rent for another 90 years. The PA took one of the 4 buildings away from him, already a questionable proposition. They then took so long getting the site ready that he missed his chance for financing to the recession. It's really hard to take the side of an agency in a city that consistently has worse real estate bubbles because of this sudden and overwhelming urge to underbuild as soon as things look bad. There's then no available office space when things get good, the income/sqft soars so building a huge amount of office space now looks profitable, it all gets built, and the whole thing crashes. It gets worse every time, and without some effort to smooth the cycle (build these towers, perhaps?) it won't ever change.

[RandySavage]

^
1. Silverstein has received $4.5 billion in insurance since 9/11.
2. Silverstein has payed the PA $0.78 billion in rent since 9/11
3. The PA has payed Silverstein $0.1+ billion in late fees for Church St. Towers.
4. Silverstein has given $1.98 billion of insurance proceeds to PA for taking over responsibility of WTC1 and WTC5

By my math, Silverstein should be sitting on the remaining $1.84 billion in insurance proceeds (minus architects fees). How much financing would they need if they still had that much money?

They recently stated they only have $0.9bn remaining. So somewhere the other $0.94bn went away. Assuming the $0.8bn in insurance received for WTC7 (and the $0.7bn it cost to build) is not included in the original $4.5bn total payout figure, what happened to that extra billion dollars in insurance that could underwrite the construction of these towers?

I'm not disagreeing that the PA has shown incompetence, but you don't think Silverstein is greedy? According to the source below, he originally went into arbitration this summer seeking billions in damages, not a financing solution to greenwich st towers.

“Larry has everybody by the proverbials — he really does,” - Michael Bloomberg, October 10, 2009


Source:
http://www.downtownexpress.com/de_32...einleader.html

[RandySavage]

Originally Posted by RoldanTTLB

The 300k a day fine against the PA didn't cover Silverstein's daily rent on the site.

Actually, annual rent on WTC was reduced to $216k day under the 2006 deal. PA readied sites for WTC2,3 & 4 as agreed, paid their late fees and, then, Silvestein, finding themselves low on cash and about to have to resume paying rent on the readied sites, began to claim that key infrastructure (PATH station, truck security center) would also have to be ready, even though that wasn't part of the original deal. They sued.

[BiggieSmalls]

I dont think you accounted for the rebuilding of 7 WTC.

Its an interesting forensic financial analysis..

EDIT: I see its there.. my bad.. interesting .

[RandySavage]

^ $4.6bn is mentioned often as total 9/11 WTC insurance proceeds received by SP... I haven't been able to find out if that includes the $0.8bn in insurance proceeds that were received for WTC7.

[ramvid01]

It was my understanding that the PA was not given responsibility of WTC 5 and that it is still under the control of Silverstein. Am I wrong?

[BiggieSmalls]

^ The PA has development rights to WTC5 (DB Building) .. something like 1.3 mm sq feet.

[RoldanTTLB]

Originally Posted by RandySavage

^
1. Silverstein has received $4.5 billion in insurance since 9/11.
2. Silverstein has payed the PA $0.78 billion in rent since 9/11
3. The PA has payed Silverstein $0.1+ billion in late fees for Church St. Towers.
4. Silverstein has given $1.98 billion of insurance proceeds to PA for taking over responsibility of WTC1 and WTC5

By my math, Silverstein should be sitting on the remaining $1.84 billion in insurance proceeds (minus architects fees). How much financing would they need if they still had that much money?

They recently stated they only have $0.9bn remaining. So somewhere the other $0.94bn went away. Assuming the $0.8bn in insurance received for WTC7 (and the $0.7bn it cost to build) is not included in the original $4.5bn total payout figure, what happened to that extra billion dollars in insurance that could underwrite the construction of these towers?

I'm not disagreeing that the PA has shown incompetence, but you don't think Silverstein is greedy? According to the source below, he originally went into arbitration this summer seeking billions in damages, not a financing solution to greenwich st towers.

“Larry has everybody by the proverbials — he really does,” - Michael Bloomberg, October 10, 2009


Source:
http://www.downtownexpress.com/de_32...einleader.html

Based on this (http://www.downtownexpress.com/de_20...rtworkers.html) he has received $4.6b total. Let's add to that the $0.1b in late fees and we're at $4.7b. Then let's take off the $0.78b in rent, the $0.7b to build 7WTC, the $0.4b Silverstein owed on the mortgage for the old 7WTC (http://en.wikipedia.org/wiki/7_World...r#Construction), and the $1.98b he gave to the PA. Now we're at only $0.84b remaining, which is a friendly round up to what he says he has. This doesn't include building out the foundations for Tower 4, which is already done, or the design work for the whole site. Based on even 216k a day in rent, that's a cool $1.4m a week. With only $0.9b in the bank, he has less than 2 years before he's completely out of money. Will people be moved into the only tower he's getting to build right now by then? Hard to say, but chances seem slim.

In any event, you're absolutely correct that Silverstein didn't get rich giving his money away. He doesn't seem overwhelmingly greedy either though. Especially considering he could have taken the easy route out and defaulted, dumping the entire pit on the PA and letting them scramble for decades to come.

[Stroika]

There are many, many vile, small-time (in mindset, if nothing more) developers in this city. Sam Chang is the most horridly grim manifestation of this. Though nowhere near Chang, Moinian, Macklowe, Zuckerman also rush to mind. I'm no fan of the likes of plenty others, either, including Related, Tishman Speyer and Vornado. IMO, compared to any of those characters Silverstein seems like a genuinely ambitious and civic-minded individual.

There's lots of fair opportunities to villify developers in this city, but Silverstein really got handed a bunch of lemons and he's fighting tooth and nail to make lemonade out of them by ensuring the most architecturally interesting buildings go up at the WTC, rather than 100 years of stub-itecture. Does he have his own interests in mind? Of course. But his interests coincide with the city's better than most of his competitors' do.

[Alonzo-ny]

Originally Posted by RandySavage

Actually, annual rent on WTC was reduced to $216k day under the 2006 deal. PA readied sites for WTC2,3 & 4 as agreed, paid their late fees and, then, Silvestein, finding themselves low on cash and about to have to resume paying rent on the readied sites, began to claim that key infrastructure (PATH station, truck security center) would also have to be ready, even though that wasn't part of the original deal. They sued.

Isn't it more infrastructure than that? Are the buildings sharing services in the way the old WTC did. Eg one big chiller plant, etc? If so the buildings literally can't operate without it.

[HoveringCheesecake]

Originally Posted by Alonzo-ny

Isn't it more infrastructure than that? Are the buildings sharing services in the way the old WTC did. Eg one big chiller plant, etc? If so the buildings literally can't operate without it.

Not sure about the chiller plant. There was an article a few months ago about Silverstein's towers needing their own systems so that the PA's was more "green."

The biggest problem is the Transportation Hub. Maybe I'll get flogged here for saying this, but if it comes down to the hub and the towers, then give me the towers.

[ZippyTheChimp]

First of all, you have to have some sort of transportation hub, since there's already a rail line, subways, and two underground connections. So what you're saying is build something like the present Penn Station.

Secondly, whether towers are built now or later, or whether it's Silverstein, some other developer, or even the PA reverting back to its former role - there will someday be towers on the site. The land is too valuable.

But once the transportation hub is done on the cheap, it will remain that way. And someday, there will be the same complaints as are made now about Penn Station.

BTW, the hub will make the towers more attractive to potential tenants.

[RandySavage]

It would be good to find out if 7WTC and the $0.8b insurance paid for it is included in that $4.6b total.

One thing I will give Silverstein: on the surface at least, it seems unfair that he would have to continue to pay the $300k/day rent the day after the towers were destroyed. As their destruction was the result of failures in national defense - something taxes are supposed to cover - it would seem natural that rent should have been waived or assumed by the Federal govt for a period after (say 5 years).

[HoveringCheesecake]

I'm going to take a crack at the insurance money.

Insurance payouts were capped at $4.577 billion for buildings 1, 2, 4, and 5 after the lawsuits in 2004.

$861 million from insurance for tower 7 with $400 million left on the mortgage leaving $461 million.

$475 million in Liberty Bonds to rebuild tower 7.

That gives us... $5.513 billion. Subtract $700 million for building tower 7. $4.813 billion left.

$102 million/year rent to the PA. About $816 million so far. $3.997 billion left. $100 million late fees from the PA. $4.097 billion.

$1.98 billion to the PA for Towers 1 and 5. $2.117 billion left.

Either I did something wrong or he had a bunch of money with Madoff. This doesn't make sense. Assuming that Tower 4 costs something like $1 billion that's still over one billion dollars left. As you said we need to find out if tower 7 was actually included in the original insurance settlement. It'd make more sense.

I swear I've seen articles quoting the costs of Towers 2, 3, and 4. Anyone have those numbers?

[RandySavage]

^ Was money received in insurance for the WTC earmarked to be spent solely at the WTC site? If not, some of it could have gone toward Silver Towers on 42nd st.


With regards to the cost of WTC 2, one of these articles said Slvrstn Properties needs $625m in financing from the frozen credit markets to build it, but no mention of what the total cost is.