Date: Aug 05, 2010
Press Release Number: 52-2010
Private Sector Partnership Adds to Growing Market Confidence In One World Trade Center and Momentum of Entire WTC Site
The Port Authority Board of Commissioners today authorized the final terms of an agreement with The Durst Organization (“Durst”) for an equity membership interest in One World Trade Center.
The new partnership repositions One World Trade Center in the market with a private sector overlay and equity backing to increase its economic competitiveness, brings in best-in-class private sector expertise in development, construction, leasing and management whose economic interests are aligned with the Port Authority, and limits the Port Authority’s long-term financial risk by partnering with a private developer with a proven track record for developing large, Class A office buildings in New York City.
Under the agreement, Durst will make a minimum equity investment of $100 million for its membership interest in One World Trade Center LLC. At the Port Authority’s option to be determined in the future, Durst will commit an additional $100 million under the same terms as the initial $100 million, or an additional $200 million in preferred equity that would draw a fixed rate of return on the investment.
The agreement also will allow Durst to bring its expertise to advise the Port Authority with ongoing construction of One World Trade Center and take on primary responsibility for tenant fit-out, leasing and property management.
Durst and the Port Authority will receive a financial return tied to the equity interest of each partner and the long-term performance of the building.
The agreement follows an intensely competitive six-month process involving some of New York City’s and the nation’s most prominent private sector real estate interests – all vying for a stake in One World Trade Center.
Construction of One World Trade Center has now risen to the 32nd floor – more than 300 feet above street level. When completed in 2013, the LEED Gold Certified tower will contain approximately 2.6 million square feet of world-class office space, along with an observation deck and a skytop restaurant. One World Trade Center will also be connected to 500,000 square feet of world-class retail and a vast mass-transit network.
Port Authority Chairman Anthony R. Coscia said, “Our joint venture with the Durst Organization signals the Port Authority’s commitment to making One World Trade Center a world-class office building with first-class tenants. It’s a great step forward for the building, for the World Trade Center site, and for the region.”
Port Authority Executive Director Chris Ward said, “This partnership continues the momentum downtown and adds to the growing private sector confidence in the new World Trade Center. We very much look forward to partnering with a world-class organization in Durst to truly make One World Trade Center New York’s first address.”
Jonathan (Jody) Durst, President of The Durst Organization, said, “We are grateful to Board of Commissioners for the opportunity to assist in the development of One World Trade Center, and are eager to build upon the significant success that the Port Authority has already made in the construction and leasing of One World Trade Center.”
The family-owned Durst Organization controls over 10 million square feet of commercial office space with a current occupancy rate of 97 percent. Most recently, it successfully developed and opened One Bryant Park, the 2.1 million square foot tower on 42nd Street, which is home to Bank of America.
In the upcoming months, the Port Authority and Durst will complete the deal documents according to the final terms authorized by the Board in today’s meeting. Until that time, Durst will begin partnering with the Port Authority immediately on One World Trade Center under an interim agreement.
The Port Authority of New York and New Jersey
John Kelly or Steve Coleman, 212 435-7777
The Port Authority of New York and New Jersey operates many of the busiest and most important transportation links in the region. They include John F. Kennedy International, Newark Liberty International, LaGuardia, Stewart International and Teterboro airports; AirTrain JFK and AirTrain Newark; the George Washington Bridge and Bus Station; the Lincoln and Holland tunnels; the three bridges between Staten Island and New Jersey; the PATH (Port Authority Trans-Hudson) rapid-transit system; Port Newark; the Elizabeth-Port Authority Marine Terminal; the Howland Hook Marine Terminal on Staten Island; the Brooklyn Piers/Red Hook Container Terminal; and the Port Authority Bus Terminal in midtown Manhattan. The agency also owns the 16-acre World Trade Center site in Lower Manhattan.