As Governor Pataki watches steel rise at the site of the Freedom Tower and ponders a presidential run, the ground zero developer derided as "greedy" by a Pataki aide is looking forward to working with the incoming Spitzer administration, which he says is likely to be far more competent.
In a wide-ranging interview with The New York Sun, the developer, Larry Silverstein, sat in his corner office on the 38th floor of Seven World Trade Center, overlooking busy construction crews at the former World Trade Center site. Mr. Silverstein discussed progress in rebuilding ground zero, offered a bullish outlook on the 2007 real estate market, and served up a critique of Mr. Pataki's staff.
"You look at the resumes of the incoming administration, these guys are not political hacks," Mr. Silverstein said. "If loyalty is the first object of your subordinates you will have lousy subordinates. If productivity and ability is the object of your subordinates, you have good people.
"You could look at the staff of Michael Bloomberg. He has got a crackerjack staff," he continued. "Look at, by comparison, the staff of the outgoing governor. Look at their credentials, look at their accomplishments, and look at their backgrounds. You will see a different world.
"This governor had a groundbreaking we didn't need. A cornerstone laying we didn't need. However, it comes with the territory. They want photo ops, give them photo ops," Mr. Silverstein said.
The developer, 75, was entangled in months of bitter negotiations with the city, state, and the Port Authority about development rights at the 16-acre former World Trade Center site. During the public standoff, the governor's lead development official, Charles Gargano, called Mr. Silverstein "greedy." In the end, Mr. Silverstein relinquished about one-third of his development rights to the Port Authority, which owns the land.
In a telephone call yesterday to clarify his comments in the interview, Mr. Silverstein said, "The governor's staff is one thing," but he said he had "tremendous respect" for Mr. Pataki and his chief of staff, John Cahill.
"They worked very hard to effectuate what has been accomplished," he said.
Silverstein Properties is planning to begin construction in January 2008 on two large office towers at ground zero, and the developer will begin construction in July 2008 on a third. If the Port Authority does not prepare the site in time, it will end up writing a $300,000 check to the developer every day. Real estate experts believe that Mr. Silverstein ended up with ground zero's commercial prize, the three towers along Church Street, closer to public transit and without the high profile of the Freedom Tower, which is seen by some as a potential target for terrorism.
"'06 was one hell of a year. We began in disaster," he said. "Where we were a year ago to where we are today — light years."
At a press event yesterday, Governor-elect Spitzer said he would leave open the possibility of altering plans for the Freedom Tower, the 1,776-foot centerpiece of plans to rebuild ground zero that was championed most forcefully by Mr. Pataki.
Mr. Silverstein, who relinquished his rights to lease the Freedom Tower but is building it for the Port Authority, said Mr. Spitzer should examine the project's finances, but he said changes were unlikely and unwarranted.
"To make any changes would delay the entire process and New Yorkers don't want that to happen," he said.
The developer said he expects that Mr. Spitzer, who as attorney general is a tenant in a building owned by Silverstein Properties, would be an ally in his ongoing battle to recover hundreds of millions of dollars of outstanding insurance proceeds.
"I suspect he will take a very activist view toward the one ingredient here that could stymie us: the unwillingness of the insurance companies to live up to their obligations," he said.
In November, Silverstein Properties acquired an 11-story office building at 99 Church Street from Moody's Investor Services $150 million. Mr. Silverstein said it was likely the building would be razed to make way for a 58-story residential tower.
The developer said his three towers, comprising more than six million square feet of office space, would be complete by 2013. The developer would not say whether Merrill Lynch, which is reported to be looking for a new headquarters, would seek to anchor one of the towers.
The office construction in Lower Manhattan will likely face competition from around 10 million square feet of office space planned for the area around Madison Square Garden by two of the city's most active developers, the Related Companies and Vornado Realty Trust.
Mr. Silverstein said price-discriminating corporations and public companies would prefer his buildings in Lower Manhattan, which he said would have competitive advantage because insurance proceeds would keep prices low. He said developers Stephen Ross of the Related Companies and Steven Roth of Vornado are still far from realizing their vision for Midtown South.
"These buildings here are going into the ground now. They first have to demolish, to design, to get approvals, and there are all kinds of political approvals," Mr. Silverstein said. "What we have gone through down here, they will have to go through. It will take a couple of years, they will get there, but it will take a couple of years."
To the west of Madison Square Garden, Mr. Silverstein said the Bloomberg administration's plans for tall commercial buildings along Eleventh Avenue in the Hudson Yards district are misguided.
"It is only serviced by one mass transit line, the 7. Otherwise it's a long walk to Eighth Avenue, one hell of a walk," he said. "The sites on Eighth Avenue, great sites, the Pennsylvania Hotel, great site. But the stuff all the way over on the West Yards, is much better as residential."
Looking ahead, Mr. Silverstein said that all signs point to another strong year for the New York real estate industry in 2007, but that growing inflation was a concern.
"By and large, there will not be any dilution in the enormous amount of capital coming from around the globe seeking a home here in New York, looking for hard assets, looking for buildings to acquire," he said. "The Dubai interests have all been in here."
Despite the recent string of record-setting office building sales, Mr. Silverstein said his company is unlikely to liquidate its real estate holdings.
"I tell my kids when I'm no longer here, don't sell. Hold on to this. The assets only get better with time," he said. "You can't prognosticate indefinitely, but ‘07 looks like a good year. New York is in a very good time and in a very good place."