Control of World Trade Center complex changes hands for first time on July 2001

[rollingrock]

The World Trade Center switches to private hands for the first time since it opened. Larry Silverstein's bid for the WTC property was accepted by the NY Port Authority on April 26, 2001 and was finalized July 24, 2001. One of those fascinating coincidences again?

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The only time the WTC ever changed hands since it was opened in 1973 . . . It was previously controlled by the New York Port Authority, a bi-state government agency . . . Larry Silverstein, the president of Silverstein Properties, only uses $14 million of his own money for the deal. His partners put up a further $111 million, and banks provide $563 million in loans . . . . The Port Authority had carried only $1.5 billion in insurance coverage on all its buildings, including the WTC, but Silverstein’s lenders insist on more, eventually demanding $3.55 billion in cover . . . After 9/11, Larry Silverstein will claim the attacks on the World Trade Center constituted two separate events, thereby entitling him to a double payout totaling over $7 billion.

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In 1998, the Port Authority approved plans to privatize the World Trade Center.<102> In 2001, the Port Authority sought to lease the World Trade Center to a private entity. Bids for the lease came from Vornado Realty Trust, a joint bid between Brookfield Properties Corporation and Boston Properties,<103> and a joint bid by Silverstein Properties and The Westfield Group.<104> By privatizing the World Trade Center, it would be added to the city's tax rolls<104> and provide funds for other Port Authority projects.<105> On February 15, 2001, the Port Authority announced that Vornado Trust Realty had won the lease for the World Trade Center, paying $3.25 billion for the 99-year lease.<106> Vornado Realty outbid Silverstein by $600 million though Silverstein upped his offer to $3.22 billion. However, Vornado insisted on last minute changes to the deal, including a shorter 39-year lease which the Port Authority considered nonnegotiable.<107> Vornado later withdrew and Silverstein's bid for the lease to the World Trade Center was accepted on April 26, 2001,<108> and closed on July 24, 2001.<109>

http://en.wikipedia.org/wiki/World_Trade_Center#cite_note-101

[Make7]

1. Why is this information just coming to light now? ( n/t )

[Theobald]

7. What makes you think it is just coming to light now?

Because you didn't know about it?

It was reported in 1998 that the Port Authority would privatize the buildings. The open bidding process was extensivley reported on while it was occuring. The fact that Vorando realty backed out was reported, the fact that Silverstein won was reported. What part of this did you think was a secret?

[Bolo Boffin]

8. Make7 is being sarcastic. n/t

[rollingrock]

2. The new owners had it less than two months

Less than two months before the new owner of the World Trade Center complex was able to cash in (twice) on the $3.5 billion dollar insurance policy he had taken on the property.

Not bad for a $14 million investment, eh?

7 billion dollar ROI in less than two months. Talk about making a killing.

[seemslikeadream]

4. and he didn't have to pay for that asbestos removal

[rollingrock]

11. Nice

the port authority handed them a nice sweetheart deal there.

I wonder how much they got for waiving those OSHA requirements.

[Theobald]

26. You believe Silverstein got a sweet deal do ya?

So how about offering some pre 9/11 evidence that suggests that anyone thought Larry was getting a sweetheart deal. New York is not a big media city so it's possible that this sweetheart of a deal flew under the radar, but with a little research you might be able to come up with something. Maybe something from the New York Times, New York Post, Daily News, Wall Street Journal, Village Voice, Crain's New York Business, the New York Observer, the Financial Times or Newsday. I know there is a paucity of sources, but I'm sure with your innate intellect you can dig something up.

[rollingrock]

42. Or, maybe the removal requirement wasn't waived

if so, you have to wonder why anyone would want to buy something that requires them to pay a huge expense for asbestos removal, something that takes years to undergo and costing upwards of $1 billion and likely much higher. Not many people want to work in a toxic asbestos environment for long. As the landlord, the asbestos problem is costing you your tenants and tons of money. Why would anyone in their right mind want to invest in such a big money loser?











uhhh, lemme guess.....for the insurance money perhaps?

[Theobald]

55. He didn't have to remove the asbestos so your point is moot.

The asbestos was contained in the walls and so did not present a health hazard. So your ignorant wild eyed speculation is unfounded.

[Theobald]

57. Please provide one pre 9/11 news article that

states that asbestos remediation had to be done on the twin towers. The gauntlet has been thrown and you will fail to respond, because without such evidence your whole theory falls apart, so instead of answering you will obfuscate or resort to name calling.

[Bolo Boffin]

58. Have you heard just how much asbestos was actually in the towers?

As I recall, it was the first forty floors in the North Tower that got asbestos. Then the new regulations came on line and the contractors switched to a non-asbestos fireproofing for the other sixty floors. The South Tower had no asbestos whatsoever.

And over the years, as tenants moved in and out, the Port Authority would remove the asbestos when requested to do so by the incoming tenant. They had gotten about twenty floors done by the time the buildings collapsed.

So all of these dark aspirations are being woven around 20 floors of the North Tower. SLAD doesn't like admitting that, nor does any other Silverstein/Israel/Zionism hater in here. The only surprise in this thread is that SLAD hasn't pulled out her picture of an asbestos ad featuring the WTC.

[AZCat]

62. It's too bad.

Asbestos insulation is pretty damn good.

[Theobald]

72. I'm still waiting

Quote from Rolling Rock "why anyone would want to buy something that requires them to pay a huge expense for asbestos removal"

Do you have any evidence to back up this assertion other than your wild eyed speculations? A pre 9/11 story about the asbestos needing to be removed?

[Bolo Boffin]

12. How much asbestos was in the buildings? n/t

[seemslikeadream]

17. Estimates vary from 400 tons up to 2000 tons.

you can look it up

[Bolo Boffin]

19. How many floors in the buildings? All of them in both buildings?

Why don't you look it up? It's your fucking assertion.

[seemslikeadream]

22. it is your fucking post

[Bolo Boffin]

27. Excuse me, you appear to have been responding to yourself and replied to my post. n/t

[seemslikeadream]

28. one can never be sure of a story worth $3.2 billion.

[Bolo Boffin]

31. How many floors in the buildings? All of them in both buildings? n/t

[seemslikeadream]

33. lots and lots, many many but BOOM all gone now

[Bolo Boffin]

35. Can you put numbers to the problem?

And citations to back up your numbers?

"lots and lots, many many but BOOM all gone now"

This is not very precise of you. Can you track down your assertions and make them more precise?

Precision isn't something that you are afraid of, is it?

[Bolo Boffin]

5. Slight correction to accord more fully with the facts.

"the $3.5 billion dollar insurance policy he had taken been forced to take on the property"

And your gross oversimplification of the insurance issues isn't even worth correcting. Better to scrap it and try actually investigating what happened with an open mind.

[rollingrock]

6. Not forced

He would have taken out an insurance policy whether the lenders required it or not.
It's a non-issue.

[Bolo Boffin]

10. Yes, forced.

It is an issue for people that think he took out an insurance policy in order to profit from 9/11. The fact that he was forced to take out the policy that he took out (and actually worked down the amount he had to ensure against) is most definitely an issue that people saying he took out these policies as part of the 9/11 attacks need to deal with.

[seemslikeadream]

15. pray tell who else had taken out terrorists insurance policies weeks before 9/11?

[Bolo Boffin]

18. Silverstein was forced to, and forced to take out as much as he did, and was trying

to take out less.

[rollingrock]

21. Any lender

is going to require you to take out insurance when they loan you that kind of money, obviously. you act like as if it was something unusual.

[seemslikeadream]

23. anyone with any sense knows that but then again look who you're responding to

[Bolo Boffin]

25. Excuse me, you appear to have been responding to SLAD and replied to my post instead. n/t

[rollingrock]

29. No, it was to you bolo /nt

[Bolo Boffin]

30. ?

Why do you think I think it's unusual that a lender was requiring Silverstein to take out insurance? What makes you say that at all?

[Name removed]

32. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Bolo Boffin]

34. There are some differences in what I said to you and to rollingrock. You must be confused.

And thus, your confusing posts.

[Name removed]

36. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Bolo Boffin]

37. I see that you and SLAD's response to a civil request for precision in your assertions

and support of those assertions is a very uncivil discussion of me, completely off topic and intended to be offensive.

Thank you for another demonstration of your general reasons for being here. The moderators will be reviewing this thread shortly.

[rollingrock]

38. Move along, nothing to see

WTC changes hands just two months before 9/11, and then the new owner makes $7b from the attacks. Yep, nothing more than a coincidence there. What was I thinking? Move along folks.

[Bolo Boffin]

41. "the new owner makes $7b from the attacks" baseless and factually inaccurate assertion

[seemslikeadream]

20. why do you NEVER provide links to ANYTHING you post?

[Bolo Boffin]

24. What in my post do you request a link for, SLAD? n/t

[Theobald]

9. Correct me if I'm wrong, but you seem to be

insinuating that Silverstein had something to do with the destruction of the buildings; do I understand you correctly?

If you don't believe that to be true then what significance does his insurance policies have with regards to the 9/11 attacks?

[seemslikeadream]

13. like I said one lucky guy that Silverstein taking out terrorists insurance policies

7 weeks before the attack, talk about psychic

[OnTheOtherHand]

14. as opposed to insuring the buildings before he owned them?

You're funny.

[Theobald]

16. Yes, why the hell would anybody take out terrorist

insurance on a building that was attacked by terrorists in the past. Taking out terrorist insurance is pretty f'in stupid in a situation like that, don't you agree.

[rollingrock]

39. sorry dupe

[rollingrock]

40. Nah, it's just a coincidence

you know, like when you win the State Lottery? It can happen to anyone.

[seemslikeadream]

43. pull it

[seemslikeadream]

3. Like I said

One lucky SOB

[KDLarsen]

44. Lucky?

Let's say he got $7 billion out of the insurers. I believe it's a lot less in reality, but let's go with the nice and round figure.

He's had to pay for the reconstruction of the entire WTC complex, at an estimated cost of $6,3 billion (estimate from 2006: http://query.nytimes.com/gst/fullpage.html?res=940CE7DC133FF934A15757C0A9609C8B63 )

He's had to pay the PANYNJ $120 million per year in lease, that's $840 million so far ( http://www.mindfully.org/Reform/2004/Larry-Silverstein-WTC6dec04.htm )

That's already more than the $7 billion "profit" you seem to be talking about. Add to that legal costs to even get the insurance paid out. Some deal.

[victordrazen]

45. He had to pay the lease anyway and your point is moot

because the wtc were white elephants which would bring asbestos litigation and exorbitant prices for even simple repairs, let alone remodels or renovation because of the asbestos. Here are excerpts from a 1996 NYT article talking about the Windows of the World restaurant:

The success of that restaurant, opening at the top of New York's most disliked building toward the end of one of the city's most painful recessions, stunned everyone except its creator, Joseph Baum.

http://query.nytimes.com/gst/fullpage.html?res=950DE6D81439F93AA25755C0A960958260&scp=7&sq=asbestos+world+trade+center&st=nyt

The banal World Trade Center offers only views, not architecture, and as for Warren Platner's original Windows design, it seemed neither fresh enough to provide direct inspiration nor strong enough to be the stuff of historic preservation.

Funny how the towers became NYC's most beloved & cherished buildings after 9-11.

[AZCat]

46. Not everyone's a fan of Modern architecture.

Personally I always liked the towers. I have copies of some of the concept renderings. Beautiful stuff, IMO. But then again, I like Le Corbusier. :shrug:

[KDLarsen]

47. My bad, forgot to add something

He had to pay lease on a piece of real estate that wasn't generating any income at all. If 9/11 had not happened, the income from renting out space in the towers should easily have covered the lease.

[victordrazen]

70. Do you know what income was being generated?

As I recall there was a mass exodus planned from Wall Street to New Jersey. The reason wtc7 was filled with government is because that is all they could get.

[rollingrock]

48. He receives 7 billion to put up a spanking new piece of property

that's a nice chunk of seed money to start a shiny new, asbestos free, modern facility...while allowing him to get rid of the old money losing white elephant in the process. Not a bad deal. that's 7 billion more then he had when he started, right? minus the small initial down payment of course. He comes out ahead regardless. And what if when Silverstein decides to sell the rebuilt center when it is completed? Well then he really comes out ahead. Even if it costs 7 billion to rebuild and he sells it for only 5 billion, what does he care? He still makes a net gain of 5 billion.

[hack89]

49. So how did he co-opt the Government to do his dirty work?

that's what I don't understand.

[rollingrock]

50. Or the other way around

the government co-opted Silverstein to do their dirty work,
to the mutual benefit of both parties.

[hack89]

51. I look forward to your evidence. nt

[rollingrock]

52. Like I said

it's just another one of those amazing coincidences that happened on that day.

you know, like when someone wins the state lottery once or twice in a row? it can happen to anybody. which reminds me, I have some tickets to buy before tonight's drawing. aahaha.

[Name removed]

53. Deleted message

Message removed by moderator. Click here to review the message board rules.

[KDLarsen]

54. Silverstein doesn't own the WTC

Freedom Tower and possibly tower 5 will be owned by PANYNJ, so there goes that plan. Oh, and those $7 billion dollars? Turns out I was right, it was actually capped at $4.577 billion. Much less than it will cost to build the new buildings. Not to mention, he's still paying $10 million dollars pr month in lease on a piece of real estate that is generating zero income.

[rollingrock]

56. Not quite

World Trade Center Building 7 was rebuilt in 2006 and has been generating income ever since. By March 2007, 60 percent of the rebuilt WTC 7 had been leased. Moody's signed a 20-year lease to rent 15 floors of 7 World Trade Center. Other tenants that signed leases include ABN AMRO, Ameriprise Financial Inc. Darby & Darby P.C.,Mansueto Ventures LLC, business publisher of Fast Company and Inc., the New York Academy of Sciences, several architectural and engineering firms, etc.

By 2008, just the upper 10 floors of the building remain unoccupied. Not quite zero income.

The cost of rebuilding the world Trade Center is being shared among several parties including the state of New York, the US government (which has put up '$8 billion in tax-exempt Liberty Bonds to fund private development of the World Trade Center at lower-than-market interest rates'), Silverstein Properties and others. JP Morgan Chase acquired the rights to rebuild WTC 5, for example, and the Freedom Tower is being rebuilt by the port authority. He is by no means footing the costs of redevelopment by himself as you suggested.

Commenting on a completion date, Larry Silverstein stated "By 2012 we should have a completely rebuilt World Trade Center more magnificent, more spectacular than it ever was." Hmm, sounds like a pretty happy camper to me, not like someone who is in any way struggling financially. Far from it.

Approximately $1 billion of insurance money recouped by Silverstein is slated for construction of the Freedom Tower. The State of New York is expected to provide $250 million toward construction costs, and the Port Authority would finance another $1 billion for the Freedom Tower, through bonds.

[Bolo Boffin]

59. Did Silverstein have an asbestos abatement problem in 7? No?

And 7 was the building he owned. That wasn't part of the magical July 2001 transfer. And when the other guys control the other buildings, that means they get the rent. Or didn't you understand that part of the holdup in building the buildings was Silverstein desperately trying to maintain control of the entire site?

Tell me something, why would Silverstein agree to this plan if it meant he had to give up half the site in the end?

[rollingrock]

60. How do your questions

have any relevance to the discussion?

[Bolo Boffin]

63. My questions deal directly with your post

So if they have no relevance to the discussion, in your view, what does that say about your post?

[rollingrock]

67. Not relevant to my post

We were talking about redevelopment costs and property income.

Asbestos abatement and Silverstein's motives for ceding some control is a separate issue.

You like to change the subject, don't you?

[rollingrock]

61. He ceded control of half the site

in return for reduced lease payments.

obviously, he benefits from the financial savings.
no use in paying for something that isn't making you any money.

[Bolo Boffin]

64. ceded = forced to in court

corrected that for you

Is there any set of circumstances that you could not twist somehow to Silverstein's advantage?

[rollingrock]

65. Maybe you're not very big on math

but saving yourself millions in lease payments that aren't producing any income is quite an advantage.

[Bolo Boffin]

66. So before that time, Silverstein was in a much worse financial position, you agree? n/t

[rollingrock]

68. Not really

he had 4 billion in insurance money to draw upon, and the ability to renegotaite the lease payments in case of a catastrophic event was no doubt written into the contract lease agreement he held with the port authority before he signed it. He had all the bases covered.

[Bolo Boffin]

69. And that deserves a well-placed

:rofl:

[rollingrock]

71. You have an odd sense of humor.

he ceded some control in return for reduced lease payments.

In other words, the original lease terms were changed. Why do you find that amusing?