Work to Start Today on Freedom Tower

New York, NY —

An agreement signed yesterday between World Trade Center developer Larry Silverstein and the Port Authority means work will start today on constructing the Freedom Tower. WNYC's Bob Hennelly has more.

REPORTER: Under the terms of the deal that gets heavy equipment rolling-- Larry Silverstein will build the Freedom Tower but the Port Authority will own and run it. Silverstein will build and manage the smaller scale, but more marketable buildings 2, 3 and 4. When asked if there was enough demand for the 2.6 million square feet that the Freedom Tower will contain, Port Authority vice-chairman Charles Gargano was upbeat.

GARGANO: Well we are confident. We have five years to create that kind of a market. With all the infrastructure improvement going on in lower Manhattan --the transit hub an so many others it is certainly going to help the market and we are confident that it will be.

REPORTER: The Port Authority, which developed the original World Trade Center in the 1970s, had signed the twin towers over to Silverstein just weeks before the September 11th attack. Petra Todorovich, with the Regional Plan Association, says the bi-state agency's move to get out of the real estate business back than was a prudent one.

TODOROVICH: Prior to 9-11 when the Port Authority entered into the lease with Larry Silverstein, the purpose was exactly for the Port Authority to get out of the business of real estate business development and to do what it does best which is airports and bridges and building infrastructure. So there are some doubts when we see a deal with the Port Authority taking over the Freedom Tower again and building this major office building for which the market is questionable.

REPORTER: Critics of building out the entire site with office space say there is not the market demand for it. They point to the fact that Silverstein's brand new Number 7 World Trade Center, is only 15% rented.

Mayor Bloomberg, who played a pivotal role in breaking the logjam which was holding up development of the 16-acre site, is aware that a total build out could lead to a glut of office space.

BLOOMBERG: My concern has always been that you want to do all of these building simultaneously. It may very well lead to too much space coming on the market at any one point in time. But one of the great disincentives to rent downtown is if you look at something that is going to be a construction site for the foreseeable future.

REPORTER: The Port Authority estimates that its Freedom Tower will cost more than $2 billion to construct. But with the double-digit run-up in the cost of fuel, concrete and steel, that price is likely to rise with the building.