Port Signs Off on Durst Deal at 1 WTC
Last Updated: August 5, 2010 06:03pm ET
By Paul Bubny
NEW YORK CITY-Sealing a deal that was announced last month, the board of commissioners at the Port Authority of New York and New Jersey approved the sale of a minority equity stake in 1 World Trade Center to the Durst Organization. The family-run owner/developer, which opened the Bank of America Tower at 1 Bryant Park in Midtown this past spring, will take over leasing, tenant fit-out and management at the 2.6-million-square-foot office tower under the agreement approved Thursday.
Durst will make a minimum investment of $100 million for its membership interest in One World Trade Center LLC, the Port says. At the Port’s option, Durst could eventually commit $100 million more under the same terms, or an additional $200 million in preferred equity that would draw a fixed rate of return.
Although details were not disclosed, Durst and the Port each will receive a financial return tied to their respective equity interests and to the long-term performance of the 1,776-foot tower. The two parties will begin working together immediately under an interim agreement, and will complete the deal documents in the coming months.
Jody Durst, president of The Durst Organization, says in a statement, “We are grateful to Board of Commissioners for the opportunity to assist in the development of 1 World Trade Center, and are eager to build upon the significant success that the Port Authority has already made in the construction and leasing of 1 World Trade Center.” Chris Ward, executive director at the Port, says in a statement that the deal “continues the momentum downtown and adds to the growing private-sector confidence in the new World Trade Center.”
At Thursday’s board meeting, the Port commissioners also reauthorized the 1 WTC project, estimating the total cost at approximately $3.2 billion. The board also voted on several agenda items related to Ground Zero redevelopment, including authorization of a project to design and construct the $667-million World Trade Center Vehicle Security Center. The commissioners also voted to approve Delta Air Lines’ plan to build a new terminal at John F. Kennedy International Airport’s Terminal 4 at an estimated cost of $1.2 billion.
The board’s vote Thursday on the Durst deal follows published reports earlier this week that Conde Nast may be relocating from Durst’s 4 Times Square into about one million square feet at 1 WTC. Although not yet a done deal, the Conde Nast move would represent the largest of what has been a recent spate of media-tenant relocations Downtown.
Two weeks ago, the New York Daily News and its sister organization, US News & World Report, announced a move from Midtown to Harbor Group International’s 4 New York Plaza. The long-term lease is for 100,000 square feet. In June, American Media, which publishes the National Enquirer, said it was taking 85,000 square feet at the same property. According to the Alliance for Downtown New York, Lower Manhattan is already home to 59 media tenants, including ALM Media, parent company of GlobeSt.com.
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