Silverstein makes it happen conceding to PA demands.

Larry Silverstein announced last week that he would agree to most of the terms laid out in the plan the Port Authority has presented him for the redevelopment of the World Trade Center site.

The agreement, which came after months of discord and years of stagnancy at Ground Zero, will put an end to the finger pointing and usher in a quick rebuilding schedule, Silverstein said. The deal will require Silverstein to surrender ownership of the Freedom Tower and Tower 5 but allow him to retain what are considered the most commercially viable development sites, the parcels on the eastern flank of Ground Zero where Silverstein will build Towers 2, 3, and 4.

Silverstein--who the Port Authority, Mayor Bloomberg, as well as Governor Pataki had branded as being greedy and negotiating in bad faith at times during their rocky negotiations in recent months--said that he had made significant concessions to make the deal happen. Among them was Silverstein's agreement to forgo rent credit or a refund on the five years of lease payments he made for the portions of the site that the Port Authority is now taking over, a figure that Silverstein estimated to be worth roughly $200 million. Silverstein also called the reduced rent that he will pay for the site going forward as still being well above market rate.

Silverstein also will give the Port Authority $250 million in insurance proceeds for the retail portion of the site, an amount that he indicated was double per s/f than what he received for the office space. He agreed further to a Port Authority request that it have a 15% share in his three towers on the site--an interest that Silverstein valued at $200 million--that would be payable on either a sale or refinancing of the properties.

"To my knowledge, no other developer seeking to qualify for Liberty Bonds or other economic development programs has ever been asked by government to make concessions remotely of this type or magnitude," Silverstein said in a statement. "Nevertheless, I have come to the conclusion that the most important thing at this juncture is to resolve things so that all the finger-pointing can stop and the rebuilding can proceed."

Among the provisions of the deal that Silverstein said would need revising before a formal agreement could be reached with the Port Authority was the lengthy deadline the it has to vote on the agreement. Silverstein claims that the Port Authority has until September to seek board approval for the deal, during which time the agreement could be further delayed if the leasing commitments the Port Authority has sought for the Freedom Tower and also Silverstein's buildings falls through or are delayed.

Silverstein has welcomed the Port Authority's offer to have government organizations, itself included, lease hundreds of thousands of s/f in one or more of his towers--a commitment that would significantly aid financing for the buildings. Other concerns that Silverstein mentioned were the strict construction schedule that is being imposed on him in the deal and the amount of money he would be required to contribute towards infrastructure on the site. Silverstein welcomed the tight construction deadlines but claimed that there were no provisions to prevent him from being "penalized for delays that result from matters beyond our reasonable control."

In a conversation with REW, Port Authority vice chairman Charles Gargano did offer assurance that Silverstein would not be held accountable for construction delays that were not his fault, such as delays incurred by interference from the development of the WTC memorial or the PATH station.

Silverstein said he agrees to the Port Authority's request for cash assistance towards the cost of the site's infrastructure, but said the amount hadn't yet been formalized.

The sticking points that Silverstein mentioned don't appear to be serious enough to significantly delay or stymie the deal and Silverstein sources said that they expect Silverstein's concerns to soon be addressed by the Port Authority and a finalized deal reached.