Swig takes a swipe at Pataki and the Port Authority.

Downtown landlord, Kent Swig, barreled into both the Port Authority and Governor George Pataki last week, blaming the public sector for creating the quagmire that has become the WTC site.

He told guests at the monthly luncheon of Associated Builders and Owners this week, "What created this [situation] in my opinion is the public sector taking a look at the World Trade Center site. On one side, they saw Larry Silverstein's 7 World Trade Center finished and, on the other side they saw One Liberty Street, the former Deutsche Bank building, shrouded in black--four years later, they can't even take the building down.

"Instead of looking right at Deutsche Bank they looked left and blamed Larry Silverstein. He is being criticized while they have a building no-one even seems to be able to take down.

"They are looking in the wrong direction and have damaged the market in a terrible way. The public sector should get their act together. It has layers of alphabet soup and gets nothing done."

Swig, president of Swig Equities whose $3 billion US portfolio includes such downtown properties as 40 and 48 Wall Street, 80 & 90 Broad Street and 110 William Street, pointed out that, even if developer Larry Silverstein wanted to go ahead and build every tower on the site, "there's no physical way to do it because the slurry walls are 18 months away from being finished. No-one can build on [the site] until the Port Authority finishes the slurry wall."

He said the delay in rebuilding is responsible for putting a major dent in downtown's leasing market, a market he said was more healthy just after the 9/11 attacks than it is today. "Last year, Manhattan leased 24 million square feet of office space--down-town leased 3.1 million square feet, the lowest amount since 1992," he said. "In 2002, New York, literally, was on fire, yet more leasing took place downtown in 2002 than last year in the best economy we've ever had."

Swig opined that, what needs to be done is for all of the construction in the 16-acres to be started, sustained and completed. "They [the public sector] have started and stopped several times. You walk into the hole today and nothing is happening. [Santiago] Calatrava had a great groundbreaking for his transportation hub and now they are re-engineering the engineering."

While the negotiations which stalled last week were an opportunity for both sides to work out a schedule that could accommodate every-one, Swig accused the Port Authority of failing to negotiate in good faith.

"As complex as this is, it's not that complex," he told the luncheon guests. "The Port Authority wants to be in the real estate business and whether Larry Silverstein is a good guy or not a good guy, whether he did everything right or wrong, we have a land owner and we have a deal."

While he said the Port Authority had no right to anything more than was detailed in the original lease agreement with Silverstein, it appeared that the developer was more than willing to bend on divvying up the site.

However, he said Governor Pataki should be held accountable for his failure to move the redevelopment ahead, a situation created, he claimed, by the governor's own vanity. "Governor Pataki took his entire legacy and put it into a tall phallic symbol that will be out-built by the Chinese before it ever gets built anyway," said Swig, referring to the Freedom Tower.

He suggested Pataki should have fashioned his legacy after developer Robert Moses, whose name today is synonymous with the shaping of New York City and its boroughs.

"Downtown today we have four of the most incredible transportation projects going on in the US," said Swig, referring to the Whitehall ferry terminal, Battery Park terminal, the Santiago Calatrava hub and the Broadway-Fulton Street. "I would have said, this is my legacy and called it a victory. Governor Pataki's name would have been on one of them and he would have been the hero."

While he anticipated that the rowing would drag the market down for another 14 months, Swig said he has nothing but confidence in downtown's resurgence.

"Today, the financial district is the fastest growing residential city in the US. The perception is transportation is terrible but, when you look underground there is more railroad track underground than anywhere else in the US. There are four new transportation hubs either finished or are under construction. Every single street south of Canal has had, or will have by the summer, underground replacement of Con Ed pipes, water mains, electrical pipes that's every street being dug up, which means every street will be repaved.

"This is a completely brand new city, without even factoring what's going on at the WTC site.

"Downtown has the third largest office concentration in the US. The gap in property values [between midtown and downtown] is going to come closer together not because midtown is falling but because downtown is rising."