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Poker at Ground Zero

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What Silverstein cannot say out loud, given the political sensitivities involved, is that if his project is economically tenuous, the fault lies elsewhere: with the Freedom Tower. Outside the governor’s office, there’s near-universal agreement that the tower—vast, expensive, iconic, incendiary (it’s the architectural equivalent of a bright-red flag being waved at a charging bull), and thus possibly unrentable—is the biggest single obstacle to the rebuilding of ground zero. And yet not only is Pataki insistent that it be erected, he’s insistent that it be erected first, placing a huge strain on Silverstein’s limited resources. (Even the notoriously impractical Daniel Libeskind suggested that it not be put up until much later.)

No wonder, then, that Silverstein would be happy to off-load the Freedom Tower onto the Port Authority. But it’s also no wonder that he resents being asked to cough up maybe $1 billion of his insurance proceeds in the bargain. Increasing that resentment, I suspect, is that Silverstein knows that the Port Authority has no intention of building anything like the Freedom Tower as it’s currently conceived. “The Port Authority has told the governor that they wouldn’t move into the Freedom Tower as it’s now designed,” I was told by someone close to the rebuilding efforts. “And they told him that if they take it back, it’ll be to redesign it yet again.”

All of which brings us to the game that Pataki is playing. All along, the governor’s ardor for the Freedom Tower could be explained only in terms of his putative candidacy for the Republican presidential nomination. To Pataki’s way of thinking, the tower would be a vivid symbol of his post-9/11 leadership (which, he believes, however improbably, rivals Giuliani’s). With less than nine months remaining in his term, Pataki knows that the decisions about what gets built at ground zero will belong to his successor. But he’s desperate to have at least some demonstrable signs of progress that he can tout on the campaign trail.

In setting the March 14 deadline, Pataki made a rational assumption: that Silverstein would be so frantic to get hold of the $1.7 billion in Liberty Bonds the governor was dangling in front of him, and so relieved to shed himself of the Freedom Tower, that a deal was inevitable. But Pataki bet wrong, for Silverstein apparently presumed that the governor was so hell-bent on breaking ground on the tower that his people at the Port Authority would accede to virtually any demand, no matter how egregious. Silverstein, too, bet wrong—at least for now.

The question is how much longer both sides will continue to throw ever larger stacks of chips into the pot. When the Port Authority challenged Silverstein last week either to build the Freedom Tower or “move out of the way,” the unstated threat was that it would attempt to find him in default on his lease. Though Silverstein replied that he had every intention of breaking ground on schedule next month, he’s almost certainly bluffing: For him to do so without the Liberty Bonds in hand would be borderline suicidal, since completing the tower would consume the vast majority of the insurance money he has at his disposal. Pataki is gambling that fear of this prospect will force Silverstein back to the table.

Pataki’s ardor for the Freedom Tower can be explained only in terms of his putative presidential campaign.

It may turn out that Pataki, however, is overplaying his hand. If the Port Authority finds Silverstein in default, the entire matter will inevitably wind up in court—and could easily be mired there for the duration of Pataki’s term. Silverstein has amply demonstrated that he has little fear of litigation. He also seems remarkably immune to public opinion. He might well reason that it makes more sense to employ a courtroom stall until Pataki is gone, wagering that whoever replaces him will arrive in office panting for a compromise that will end the ground-zero stalemate.

But Silverstein’s endgame strategy is every bit as precarious as Pataki’s. Silverstein at the moment is paying $10 million a month in rent on buildings that don’t exist, a figure that is slated to rise come July. A drawn-out lawsuit would only further deplete his pool of capital. And there’s no guarantee that the incoming governor—especially if it’s Eliot Spitzer—will be any more accommodating than Pataki and the Port Authority are being now.

Indeed, after spending much of the past four years currying Pataki’s favor, Silverstein finds himself today in the worst place imaginable: utterly without allies, and with an emerging, determined, and possibly lethal enemy in Bloomberg, who mused last year during the campaign that “it would be in the city’s interest to get Silverstein out,” and now suddenly seems engaged enough in the contretemps around ground zero to do something about it.


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