May 22, 2006

In a meeting held in Lower Manhattan last Thursday by New York State Assembly Speaker Sheldon Silver, Larry Silverstein, who is developing several new buildings at Ground Zero, said that construction on the projects could be delayed because insurance companies could withhold payments.

Silverstein’s company, Silverstein Properties, is developing the 1,776-foot Freedom Tower, but won’t own it upon completion. The firm is also developing towers two three and four on the site. Silverstein said that several of the more-than-twenty insurers of the Twin Towers had recently “suggested to our attorneys that they might try and use the agreement between us and the Port Authority as a new excuse to avoid paying out claims.”

This agreement, reached in principle last month, allowed the Port Authority of New York and New Jersey to control two towers at Ground Zero, and much of the insurance proceeds related to building them. The Port Authority owns the land on the World Trade Center site.

Silverstein obtained the lease to the Twin towers just months before the September 11 terrorist attacks. He has begun receiving $4.6 billion in insurance proceeds, although insurance companies are still fighting this in court. Silverstein has been using the insurance to pay rent on the site and to build the Freedom Tower, which began construction in late April.

“We cannot let the insurance companies derail the deal that has been agreed to between us and the many different branches of government involved in the rebuilding,” said Silverstein. He added that without the insurers’ funds, "the World Trade Center cannot be rebuilt."

Silverstein has the support of the Port Authority regarding the insurance claims. In a joint letter sent May 15 to several of the insurance companies, Silverstein and Port Authority Executive Director Kenneth Ringler, said, “we do not believe that the implementation of the conceptual framework on this basis will have any impact on the insurance recovery.” The Port Authority claims it was a “co-insured party” at the Trade Center.

Jacques E. Dubois, chairman of Swiss Re, the largest insurer at ground zero, told the New York Times that the insurance agreement had not changed, but that his company needed to analyze the new agreement between Silverstein and the Port Authority before determining if the deal would affect insurance payouts.

Sam Lubell