Trade Center Dispute Goes to ArbitrationNov 21, 2008
An arbitration panel on Monday will begin hearing a dispute between the developer and the owner of the World Trade Center site involving issues that could lead to the delay of completing at least one of the towers set to rise by 2012.
WTC developer Larry Silverstein contends that site owner, the Port Authority of New York & New Jersey, failed to deliver to him a construction-ready plot for one of his towers last month, claiming a wall on the parcel interferes with his ability to complete the building’s foundation. The Port counters that the parcel meets the specifications laid out in the original lease agreement between the two parties.
A three-person arbitration panel will hear testimony for three days in a closed-door session. A binding agreement on the issue is expected in early December.
The two parties decided on arbitration earlier this month when they could not reach an agreement on the state of the site. In early October, the Port told Mr. Silverstein it had delivered a construction site on Oct. 5, effectively ending the $300,000 a day in fines it was paying him for missing the original June 30 deadline. To date, the Port has paid Mr. Silverstein $43.5 million in fines for missing deadlines.
Mr. Silverstein says the site is not sufficiently clear for him to continue laying the foundation and wants the wall removed. He also wants the fines to resume.
But the larger issue will be if the Port can really tear down the wall. That’s because the structure is playing a crucial role propping up the box that surrounds the tracks for the No. 1 train that runs through the site. It was unclear how much longer the box will need to surround the train.
The panel, which includes a retired judge and a construction executive, will also hear a dispute about the parcel for what is called Tower 2. However, those issues were unclear.
Spokesmen for Mr. Silverstein and the Port each reiterated a Nov. 12 joint statement between the parties which said that arbitration is the most practical way to resolve their differences.