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After Sept. 11, rebuilding is still a question

Developer faces uncertainties at ground zero

NEW YORK -- Larry Silverstein had been running the World Trade Center for only six weeks, having signed a lucrative lease for the twin towers in the summer of 2001, and then he saw the buildings go down on Sept. 11.

Since then, he has been in the middle of a messy rebuilding saga at ground zero. He is battling to rebuild every bit of lost office space; critics say he cannot pay for it, or do it quickly enough.

Time could be running out for Silverstein. He faces a deadline next week ordered by Governor George E. Pataki that could dramatically reduce his rights to rebuild the site.

''I want to see this get done in my lifetime," said Silverstein, who is 74 years old.

Colleagues say Silverstein has been guided by a mission that began just after Sept. 11.

''He really does believe that it's his destiny, so to speak, to do it, and to do it right," said David Childs, the architect of the iconic Freedom Tower.

Critics, among them Mayor Michael Bloomberg in recent months, say that Silverstein will probably run out of rent money.

Silverstein has paid $10 million a month since September 2001, without the rebuilding factored into the five-structure plan. Some of the critics say he is misjudging the market and the downtown community's need for so much office space.

''It's a very big part of this city," Bloomberg said last week of the 16-acre site and of the development. ''It's not just something where a private developer, I believe, can go off and do whatever he or she wants and is in their economic interest."

''We're at a point now where we have some grave concerns about his ability to the complete the entire site," said Charles Gargano, a deputy chairman of the Port Authority of New York and New Jersey, the site's owner, which is renegotiating Silverstein's lease.

Supporters say the problem with rebuilding and delays is not Silverstein.

''The one building he's had total control over, he rebuilt," said Steven Spinola, president of the Real Estate Board of New York.

Silverstein plans an opening in May for Seven World Trade Center, a building that also collapsed on Sept. 11 but that is not on ground zero and that thus is not under the same scrutiny as other planned properties.

His acquisition of the trade center, six weeks before the towers collapsed, was seen as a gamble.

The trade center ''wasn't considered the most desirable office space in the world" because it went years with high vacancy rates and was bombed in 1993, said Kathryn Wylde, president of the Partnership for New York City, a business leadership group.

After another developer dropped out, Silverstein led a group of investors with a $3.2 billion bid.

Raised in Washington Heights, Silverstein joined his father's real estate business while he was still in law school; he later founded his own firm.

He first did business with the Port Authority in 1980, building the first Seven World Trade Center. After that, he set his sights on the Twin Towers.

On Sept. 11, 2001, he would normally have had breakfast early at the Windows on the World restaurant, at the World Trade Center. Instead, he was heading to a dermatologist's appointment.

His two children who worked at his company, Silverstein Properties, were also spared. A week after the attacks, he announced that he would rebuild the towers.

Business and political leaders have said for months that this could not happen. Silverstein has used the trade center's insurance policy to pay for rent, legal fees, and construction costs for the Freedom Tower.

After a lengthy legal battle to determine whether his $3.5 billion insurance policy should count once or twice for the attacks by hijacked jetliners on both towers, Silverstein reportedly ended up with $4.6 billion.

Silverstein Properties has $3.2 billion left of that, a senior vice president, Janno Lieber, said at a City Council hearing last week. Lieber also said that Silverstein can build all the towers on the site as soon as the Port Authority excavates the land in question to make it available for development.

''I'm frustrated," Silverstein said last week. ''I'm paying $10 million a month and I can't even use the site."

In December, Pataki asked Silverstein and the Port Authority to renegotiate the developer's role. The deadline is Tuesday.

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