Port Authority Delays Could Put Money Back in Goldman's Pocket

Blankfein
Goldman Sachs CEO Lloyd Blankfein is about to get a small return on the bank's WTC investment. Photo: Patrick McMullan

It's a scenario every New Yorker who doesn't own his own place fantasizes about: years of free rent because a landlord screwed up on the terms of a lease. So how about 64 years of free rent, worth $161 million in total rent? Nobody would make that kind of screwup, right? Of course they wouldn't — unless they were the city and state governments of New York.

And that's exactly what seems to be happening right now. Because of egregious Port Authority delays in the reconstruction of the World Trade Center site, the city and state stand to lose $321 million that investment bank Goldman Sachs was ready to pay in rent and sales tax for the land under the $2.4 billion tower it is building nearby. The Daily News' I-Team uncovered this loophole while perusing the SEC Website. Turns out that according to the deal signed by Mayor Bloomberg and former governor George Pataki, if certain progress is not made by the end of 2009, the money set aside by GS would revert back to the bank. City and state officials say that won't happen, but since no buildings are anywhere near complete on the site, the News argues there's no way that taxpayers won't lose the money.

You can't blame Goldman Sachs for eyeing that cash right now. It's a tough economic time for banks, after all. It's certainly not the moment to be throwing away money on projects that show no signs of coming to fruition, ever.

Port Authority's inability to rebuild quickly at WTC site will cost taxpayers [NYDN]