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Rebuilding Ground Zero

Rebuilding Ground Zero

Sep 07, 2007
By By: Adam Piore | Portfolio.com | Portfolio.com

John “Janno” Lieber may have the best view in Manhattan-and he’s working hard to ruin it.

From his 38th-floor office at 7 World Trade Center, the gap-toothed, 45-year-old redhead gazes out a full wall of glass at tiny boats cruising along the Hudson under the Verrazano Narrows Bridge. In the distance is the Statue of Liberty. It’s a stunning vista on a beautiful, summer day. But the youthful, Harvard-educated executive spends most of his time worrying about the muddy construction site directly below-and the buildings that will rise out of it.

“I’d trade my view for a completed building pretty quick,” says Lieber, project manager of Silverstein Properties’ World Trade Center site, as he traces his finger across the part of the skyline he hopes an office tower will someday obscure.

Lieber is developer Larry Silverstein’s right-hand man and the day-to-day manager of the World Trade Center project, easily the most sensitive and scrutinized urban development in years. Silverstein, 76, is staking $7 billion-one of the biggest real estate gambles of all time-and his reputation on transforming the site of the September 11 terrorist attacks into a thriving business center again. “There’s really nothing quite like the World Trade Center project in terms of the complexity, design, and development,” Lieber says. “It’s a huge project.”

So far, the challenges have been enormous. Since taking the job in spring 2003, Lieber has reassured grieving family groups, kept feuding architects from coming to blows, and sat through marathon negotiating sessions-all before any construction began.

Now comes the hard part. The foundations for the 1,776-foot-tall Freedom Tower have already been laid, and construction of three additional office towers are slated to begin after the first of the year, once the Port Authority of New York and New Jersey finally clears the site of debris. Then things will get hectic in a hurry. The $17 billion project on the 16-acre site will be equivalent to building about same amount of office space-about 10 million square feet-as “downtown Denver all at the same time,” Lieber says.

That day won’t arrive too soon for Lieber and his staff. It’s been an agonizingly long road to get here, so long that many New Yorkers have long since shrugged their shoulders in disgust and stopped paying attention.

Lieber’s boss Larry Silverstein bid $3.2 billion and signed a 99-year lease for the World Trade Center with the Port Authority of New York and New Jersey on July 24, 2001. This lease gave Silverstein the legal right to rebuild the buildings should they ever be destroyed.

Six weeks later was September 11.

For Lieber, it has taken Wilsonian diplomatic skills and Buddha-like patience to cook up a redevelopment plan to satisfy all the stakeholders: the city, the states of New York and New Jersey, victims groups, and downtown business lobbyists-not to mention his boss, Silverstein. It has not always been pretty.

“People from the private sector who work with the public sector often find it incredibly frustrating,” says Dan Doctoroff, deputy mayor in charge of economic development, who has a private equity background. “There are many different decisionmakers and points of pressure and influence that are given legitimate weight. It takes someone with a deft political touch to bridge all those competing interests.”

That’s where Lieber comes in. A native New Yorker born on the Upper West Side, Lieber lives in Brooklyn with his wife and three young children, close enough-thanks to a 10 minute commute-to tuck his kids into bed most nights.

Lieber attended Harvard University and then went to law school at New York University. He worked for Mayor Ed Koch and did a stint as a writer for the New Republic. Before joining Silverstein, he got some valuable experience in the private sector as a vice president for Lawrence Ruben Co., overseeing an $800 million development project at the Port Authority Bus Terminal.

But it was Lieber’s job in the Clinton administration from 1994 to 1998 that best prepared him for his role with Silverstein. As an assistant secretary at the U.S. Department of Transportation, Lieber was Clinton’s point man as Congress rewrote the blueprint dictating how billions in federal transportation funds would be doled out.

Lieber’s job was to protect Clinton’s priorities as hundreds of squabbling congressmen and senators fought for funds to build highways and bridges in their districts. This required him to lobby influential lawmakers and travel around giving speeches like a candidate running for office, highlighting the Clinton administration’s interests. He went to Denver for an H.O.V.-lane ribbon-cutting ceremony to tout the importance of carpooling and cutting down on traffic. He stopped off in Seattle for the opening of a new Amtrak line and played up the importance of public transit. His work in the field helped steer federal money toward more practical projects.

When Silverstein, a go-from-the-gut New York developer, was in need of someone with political and organizational skills, he sought out Lieber through a mutual friend. Soon after, Lieber plunged into the scrum of competing interests weighing in on the redevelopment of Ground Zero. During the negotiations over the future of the site in 2006, Governor George Pataki publicly accused Silverstein of being “greedy,” while Silverstein complained that Mayor Michael Bloomberg was attempting to use “Soviet style” confiscation tactics to take away his right to build.

Through it all, those involved say Lieber was a crucial “back channel” and a fount of equanimity.

“You have a very public principal in Larry Silverstein who elicits very strong reactions-a very strong personality,” says Doctoroff. “Janno has been there largely in the background-carefully developing relationships, exchanging information. In the most difficult days of the various relationships, he has proven to be a lifeline.”

To overcome opposition, Lieber cultivated potential adversaries, inviting victim family groups and local politicians to tour the newly opened 7 World Trade Center. He encouraged the local community board to hold meetings on the top floor of 7 World Trade Center. He even sponsored a “rafflemania fundraiser” for local public school 234.

But it’s his diplomatic efforts with state and city negotiators that have proved most important. Lieber ignored the media firestorm and the public battles, and quietly worked the phones, reaching out to those he had gotten to know among the staffs of Pataki, Corzine, Bloomberg, and other government officials, even as some of them attacked his boss in public. Over breakfasts, lunches, and phone calls, Lieber was able to piece together what it would take to break the impasse. Silverstein and the New York and New Jersey officials agreed on how to move forward in April 2006: In exchange for millions in rent reductions and 1.2 million square feet of guaranteed government lessees, Silverstein accepted a reduced role at the site, allowing the state to take over the Freedom Tower and a fifth building a block to the south. Silverstein retained the right to build and operate three of the new buildings.

This May, New York’s new governor, Eliot Spitzer, announced a settlement of the final seven insurance claims at Ground Zero, ending a years-long legal battle that had threatened to drag out for decades. The deal almost doubled to $4.55 billion, the amount of insurance money available to rebuild the site.

It was the last piece of a puzzle, clearing the way for construction to begin in earnest. Overall, the $17 billion project calls for five towers, retail space, a new transportation hub, a state-of-the-art performing arts center and a 9/11 memorial and museum spread out across the 16-acre Trade Center site, most of it slated for completion in five years.

Lieber is also currently overseeing the leasing of the 1.7 million square foot, 52-story 7 World Trade Center, which opened last year and was the first building to go up in the area of the terrorist attacks. Even that job is proving political. When Lieber and Silverstein decided it was not in their best interests to lease the top floor to the Chinese real-estate company Beijing Vantone at a rock-bottom price, the canny political operator warned they’d be in for criticism from state and city officials desperate to draw anchor clients to Ground Zero.

“At the time, the paper was calling Larry greedy, and the mayor was saying he should rent space for $35,” recalled Mary Ann Tighe, the chief executive of the New York tristate region for CB Richard Ellis, recalls. “Janno came back and said, ‘There will be problems, but we can ride out these problems. It’s more important that we position ourselves.'”

Lieber has done so by renting out the top floor with its stunning panorama of New York City at a fee of $25,000 a day, for lavish events. Calvin Klein and Valentino held elegant soirees, drawing celebrities like Lindsey Lohan and Drew Barrymore.

The building is now two-thirds leased; with rents double what Beijing Vantone would have paid. And Tighe expects all of it, including the top floor, to be rented by the end of the year.

“I get all the plaudits for good things happening,” says Larry Silverstein. “It’s Janno toiling down there to effectuate things that need to be done.”

 

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