[NYguy]

One for the archives...


https://nypost.com/2001/01/30/larry-...ail-potential/

LARRY LUSTS FOR TWIN TOWERS ; SILVERSTEIN HAS AN EYE ON WTC’S ; UNTAPPED RETAIL POTENTIAL

By Steve Cuozzo
January 30, 2001

LARRY Silverstein, shopping for control of the World Trade Center, has a buddy to browse with. He’s quietly joined forces with mall development giant Westfield America in his quest to take over the giant complex.

“We’re lusting for the World Trade Center, the prize of all prizes,” Silverstein says. And for privately held Silverstein Properties, the alliance with NYSE-traded Westfield – which builds and manages shopping centers coast-to-coast, with a portfolio of 39 malls encompassing 37 million square feet – sounds like a shrewd strategic partnership.

Silverstein is among four final bidders on a 99-year lease from the Port Authority for most of the WTC complex – including its vast, 400,000-square-foot shopping concourse.

Final bids – expected to run as high as $3 billion – are due tomorrow. The PA is likely to take a few months to decide.

“It’s one of the most well-recognized pieces of real estate worldwide,” says top real estate lawyer Jonathan Mechanic, “and the choice of ultimate ownership is critical to its ongoing vitality.”

Silverstein’s three rivals for the WTC are all publicly traded giants -Vornado Realty Trust, the city’s largest commercial landlord; Brookfield Properties, owners of most of the World Financial Center, and Boston Properties, developers of two new towers in Times Square.

Silverstein already controls four office buildings downtown with 5.6 million square feet, and he’s just opened his new River Place apartment complex on West 42nd Street. But it’s the WTC that makes his heart beat faster.

“There’s only one World Trade Center. Its majesty, magnitude, presence, visibility, put it into a class unto itself,” he chuckles over the list of superlatives. “There is nothing comparable.”

Silverstein knows the PA well. His company owns 7 WTC, the 2-million-square foot tower he built in 1987 on land leased from the authority. That tower is not included in the PA’s request for proposals, which the agency prefers not to call an auction.

“We’ve lived with the PA for 20 years at 7 WTC,” Silverstein says. “We enjoy working with them.” Of course, the PA’s decision will be based strictly on the perceived value of the four proposals.

The Westfield America partnership lends Silverstein’s bid a heavyweight dose of retail expertise. The WTC mall, smartly upgraded by the PA and boasting stores including Borders and Banana Republic, bears little resemblance to the low-rent concourse of 10 years ago – but it still has untapped potential, according to marketing specialists.

Insignia/ESG downtown honcho Bruce Surry says, “All the bidders are looking at areas in the World Trade Center where they could increase value – and a big one is retail.”

Alliance for Downtown chief Carl Weisbrod says privatization will “provide an opportunity to build on the tremendous advance the PA has made the past few years investing in the property – and particulary the retail.”

Whoever gets the PA’s nod wins control of one of the world’s best-known set of buildings – the twin towers, the plaza buildings known as 3 and 4 WTC, and the shopping concourse.

Privatization will at last add the WTC to city tax rolls. The PA now pays the city only around $25 million a year, less than half of what a private owner will pay. That means, of course, that office tenants – who now include the PA itself, with about 600,000 square feet – face paying true market rents.

In today’s downtown class-A market, that means $50 to $60 per square foot. Coincidentally, a rare chunk of that kind of space available happens to be in one of Silverstein’s own buildings, 140 Broadway.

A piece of bad luck has left 500,000 square feet temporarily vacant in the quirkily angled 1967 tower of black aluminum and bronze glass. A few months ago Silverstein was set to ink a deal with Goldman, Sachs.

“A few days before the signing, Goldman advised us it wasn’t going forward,” Silverstein recalls. “They perceived changes in the capital markets. Taking our space would represent an expansion, so they canceled.”

Silverstein is in talks with new tenants he declined to name. He’s confident of a deal soon – thanks partly to the investment he put into the tower he bought from Leona Helmsley in 1998.

“It was in poor shape,” Silverstein says. “The exterior plaza leaked into the concourse spaces. Marine Midland had computers and [a] lunch room down there constantly being rained upon.”

Silverstein replaced all the plaza stone, redid the lobby and entrance, and made scores of other improvements inside and out. Asked how much the job cost, Silverstein would say only, “A big, big number.”

Pressed, he said tantalizingly, “It used to be that $100 million was a big number.”

Silverstein is bullish on downtown. He loves the proposal for the new Frank Gehry-designed Guggenheim Museum on the East River – “a stroke of genius” – even though it would “obliterate views” from his own building at 120 Wall Street: “It took me 20 seconds to see the positive outweighed the negative.”

He is just as sanguine about the outcome of the World Trade Center bidding. “In the end, whoever gets the WTC, we’re all the beneficiaries of its going into private hands. Everyone benefits.

“Only more if we win.”

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https://observer.com/2001/04/silvers...-trade-center/

Silverstein Recovers: Dark Horse May Win World Trade Center


By Andrew Rice
04/09/01

A little before 10 p.m. on Jan. 25, Larry Silverstein, the 69-year-old, red-haired real estate developer, was crossing East 57th Street near Madison Avenue when he was run down by a 1997 Ford sedan. His pelvis broken, he was taken to the New York University Medical Center. As Mr. Silverstein would later tell his daughter, the accident was a bad break at the worst possible time: He was one of three bidders in the running to win a 99-year lease on the World Trade Center. Mr. Silverstein faced a Jan. 31 deadline to submit his bid to the Trade Center’s current owner, the Port Authority of New York and New Jersey.

For the next few days, business partners, advisers and acolytes lined up in chairs along the hallway outside Mr. Silverstein’s hospital room as the bid’s final details were worked out. Just five days after his brush with death, Mr. Silverstein made a blunt declaration in the New York Post : “We’re lusting after the World Trade Center, the prize of all prizes.”

Few gave Mr. Silverstein much chance of consummating what was about to become the biggest real estate deal in New York’s history. Of the Port Authority’s three finalists, “he was the dark horse,” said Michael Cohen, chief executive of the real estate brokerage GVA Williams. The conventional wisdom only seemed to be confirmed when the bids were unsealed and Vornado Realty Trust blew away the competition with a bid of $3.25 billion–$600 million more than Mr. Silverstein offered.

That’s when Mr. Silverstein showed why, through booms and busts, he has retained his reputation as one of the city’s smartest real estate minds. He brushed himself off and kept going, upping his bid to just $30 million less than Vornado’s. He waited, quietly, as negotiations between the Port Authority’s board and Vornado’s chairman, Steven Roth, broke down. Then he stepped into the breach.

Now it’s Mr. Silverstein’s turn, and this time the negotiations are going far more smoothly, according to people following the process. When asked to comment on his bid, Mr. Silverstein said: “There is nothing comparable to the World Trade Center. It is unique in magnitude, location, prominence and visibility. It has been my dream.” As recently as late March, many predicted that Mr. Silverstein would be unable to close the deal and that the complex would go to the third-place bidder, a partnership between Mortimer Zuckerman’s Boston Properties and Brookfield Financial Properties. Now, however, there is a growing consensus that Mr . Silverstein will win his prize.

Then again, hardly anything has gone as predicted so far in the Port Authority’s topsy-turvy auction. Though Mr. Silverstein’s personal style is to wheedle and charm, people who have dealt with him say he can be just as tough a negotiator as Mr. Roth. “You think you’re finished,” recalled one bruised survivor of a negotiation with him. “You’re never finished.”

Lewis Eisenberg, the Port Authority’s chairman, said he doubted the deal would be done by April 5, the next scheduled meeting of the authority’s board of directors. Still, he said, “everything’s going well.” Mr. Eisenberg has reason to be happy: According to people involved with the process, Mr. Silverstein has been willing to go along with conditions on the lease that Vornado balked at. Vornado, a publicly traded company, wanted a shorter lease in order to show less debt on its balance sheet (not an issue for Mr. Silverstein’s private company), and also assurances that Vornado would not be on the hook if, as expected, the city sues to make the developer pick up close to $100 million a year in real estate taxes on the property.

Mr. Silverstein’s allies attribute the relative comity to his years of friendly coexistence with the Port Authority, which is his landlord at 7 World Trade Center, an office building he developed in the late 1980’s on Port Authority land. When the Twin Towers were bombed on Friday, Feb. 26, 1993, former Port Authority chief financial officer Barry Weintrob remembers, Mr. Silverstein immediately offered free space in his building to the Port Authority’s staff. “By Monday, the staff was back to work,” he said.

It can’t hurt either that when Mr. Silverstein sits at the bargaining table, he sees some familiar faces on the other side–Ben Needell, for one. Mr. Needell, a lawyer at Skadden, Arps, Slate, Meagher and Flom, is one of the attorneys negotiating the deal for the Port Authority. Normally, he’s Mr. Silverstein’s lawyer. “All I’ll tell you is, Larry’s a great guy,” Mr. Needell said.

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https://money.cnn.com/2001/04/26/deals/wtc/index.htm

Westfield in WTC lease
Owner of regional shopping malls joins Silverstein to buy 99-year WTC lease

April 26, 2001

Westfield America Inc. and developer Larry Silverstein inked an agreement Thursday for a 99-year lease of New York City's World Trade Center.

The deal culminates weeks of negotiations which began on March 19. The lease includes the famous 110-story twin towers in lower Manhattan, as well as 75 specialty stores and restaurants.

Press reports pegged the deal at $3.2 billion. In March, Silverstein began negotiating with the Port Authority of New York & New Jersey for the lease when a deal with Vornado Realty Trust fell through, the interactive version of the Wall Street Journal reported.

"The World Trade Center is one of the most prominent office and retail complexes in the world, and we look forward to putting our management, leasing and development experience to work at this premier property," said Westfield CEO Peter Lowy in a statement.

Terms of the deal call for Westfield to control 427,448 square feet of retail space while Silverstein will get the 10 million square foot office complex.

Los Angeles-based Westfield America (WEA: down $0.06 to $16.20, Research, Estimates) is one of the nation's leading owners of regional shopping malls.