WTC site owner asks leaseholder how he plans to pay for rebuilding after court loss

Friday, May 14th 2004, 6:10 am

By: News On 6

NEW YORK (AP) _ The owner of the World Trade Center site wants details from leaseholder Larry Silverstein on how he plans to pay to rebuild the site following a loss in a court case that had aimed to double his insurance payout.

The Port Authority of New York and New Jersey is committed to working with Silverstein Properties ``to find out what their financial plan is for the rebuilding of the entire site,'' authority spokesman Steve Coleman said.

In a statement released Thursday, Silverstein said he has had several ``productive'' conversations with the Port Authority about financing.

``The Silverstein organization has an unconditional right and obligation to rebuild the 10 million square feet of office space lost on 9/11, and we will get the job done using insurance proceeds and traditional financing methods,'' the statement said.

Silverstein signed a 99-year lease for the trade center complex in July 2001 and obtained a $3.5 billion insurance policy. After the Sept. 11 attack, he went to court to try to obtain two payouts, one for each tower that fell.

A federal jury earlier this month significantly cut the amount of money Silverstein can seek to double. If he wins at a second trial later this year, the most he could collect from insurance would be $4.6 billion.

Estimates to rebuild the office space at the site, including the 1,776-foot Freedom Tower and four additional office buildings, have topped $7.5 billion.

Under Silverstein's lease, the Port Authority could find him in default if he fails to pay the $120 million-a-year rent or fails to rebuild all the office space that was lost. The lease doesn't set a rebuilding deadline.

Gov. George Pataki last week set a July 4 date to break ground on the Freedom Tower.