Towers 3 and 4 To Start Rising at Ground ZeroMar 13, 2008
Construction is finally set to commence on towers 3 and 4 at the World Trade Center site after five years of delay. Developer Larry Silverstein described the start of construction later this month as “nothing short of historic” and added that he was confident that a 2012 completion date for the project can be met.
The $20 billion development has been plagued by a number of setbacks, but is moving forward at a time when other projects are facing budget shortfalls at the city and state level, a drying up of available credit, and uncertainty about the incoming governor, David Paterson.
“We have finally reached the day when we are able to hand the ball to you in the design and construction industry,” Mr. Silverstein said yesterday in his first public remarks since the Port Authority handed the excavated sites for the two towers over to him on February 18.
In a speech to members of the New York Building Congress, Mr. Silverstein laid out a detailed construction schedule that will stretch over the next four years. According to the plan, Silverstein Properties will build towers 2, 3, and 4, with all three expected to reach street level in one year. By the middle of 2010, towers 3 and 4 will reach their maximum height, with Tower 2 following in 2011.
The three skyscrapers will offer a total of 7.6 million square feet of office space, which experts say could help alleviate a shortage of space that has plagued the Manhattan market for the last eight years.
The executive vice president of CresaPartners, Robert Stella, said the lack of office space in Manhattan is due in large part to the difficulty of constructing anything new. With vacancy rates at around 6%, demand is still strong, but the softening of the economy makes its difficult to predict Mr. Silverstein’s leasing potential, he said.
“Keep in mind those properties won’t become available for quite some time,” Mr. Stella said. “And it won’t be likely that he will be dumping a lot of space onto the market without having lined up an anchor tenant.”
Mr. Silverstein has just one anchor tenant lined up, the Port Authority, which has signed a lease to occupy 600,000 square feet in Tower 4. The city also has agreed to lease 600,000 square feet in the tower if Mr. Silverstein cannot find a private tenant to occupy the space.
“There will be significant demand by global corporations for the type of 21st-century office space that Silverstein will offer, but the overall pace of space absorption will be dependent upon economic conditions at time of delivery,” the managing director of Real Capital Analytics, Dan Fasulo, said.
Two large cranes are being erected at the site, and contractors will begin test blasting this week. Builders should be “knee deep” in the foundation work by the end of the month, Mr. Silverstein said.
Speaking to reporters after the luncheon, Mr. Silverstein said he was not worried about lining up tenants and speculated that the project’s completion date, December 2012, may be a blessing, as he could leapfrog over an economic slowdown.
“Between now and 2011 and 2012 we could be through three more cycles, so it’s impossible to tell,” he said, referring to his ability to lease out the space. “At the moment we are going through a much more difficult time, and presumably by the time these buildings are done those circumstances will be well be behind us.”
The instability in Albany is a concern to developers, as Governor Spitzer, the scion of a large New York real estate family, has been viewed as a friend to the industry. His resignation yesterday and the impending promotion of Mr. Paterson to governor come at a precarious time for the development and construction industries.
Mr. Silverstein said he was sad to see Mr. Spitzer “passing from the scene,” but was lighthearted when asked about Mr. Paterson. “First thing I would tell Paterson is that all the agreements have been signed,” he joked.