Insurance spat threatens WTC rebuilding: developer

NEW YORK (Reuters) – Construction of the new Freedom Tower
on the site of the World Trade Center cannot proceed if
insurance companies withhold payments as they have suggested
they may do, the developer of the site told a state Assembly
hearing on Thursday.

Developer Larry Silverstein said the insurance companies
had suggested they might withhold payments as a result of the
new agreement he reached with the landowner, the Port Authority
of New York and New Jersey.

Silverstein’s framework deal with the Port Authority would
divide as much as $4.6 billion in insurance proceeds between
them as well as tax-free Liberty Bonds.

The agreement also calls for Silverstein to meet aggressive
deadlines in speeding the rebuilding at the site, which was
destroyed in the September 11, 2001, hijacked airplane attacks
and has long been stalled.

“If the insurance company proceeds are not available you
won’t be able to build the building,” Silverstein said. He
stressed that building the Freedom Tower required both the
insurance proceeds and the tax-free Liberty Bonds.

Silverstein, speaking at a state Assembly hearing in Lower
Manhattan, said both the governors of New York and New Jersey,
the New York mayor, and the New York state superintendent of
insurance were aware of the issue and he called on them for
their help.

Silverstein said litigation was not an option in solving
the new battle with the insurers and that the issue had to be
solved if he was to avoid missing the tight deadlines in
agreement with the Port Authority.

“Without the insurance company proceeds, you don’t meet the
milestones,” he said, adding he received insurance proceeds on
a monthly basis.

The Assembly hearing was held at 7 World Trade Center, the
first building to be erected as part of the redevelopment.
Silverstein noted the Liberty Bonds for 7 World Trade Center
were not sold until it was two-thirds completed.