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Learning From the WTC Rebuilding Fiasco

by Sanford Ikeda
Fri, 4 Jul 2008 at 1:07 AM

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So the Port Authority of New York and New Jersey has finally come clean and publicly confirmed what most of us have suspected: that the rebuilding of the World Trade Center site is distressingly behind schedule and seriously over budget.

The Sun reports that the cost overruns will be upwards of $1 billion on the PATH hub alone, in "PATH Hub First Target of WTC Revisions."

In addition, the 9/11 Memorial and Museum and the proposed Trade Center Towers 2, 3, 4, and 5 (which involve dismantling as well as construction) are all also way over budget with problematic completion dates. (You can also read about it here.)

Moreover, according to an article in Monday's Wall Street Journal (this is a gated article),

The challenges center on the Port Authority's planned transit hub and the memorial, which sits above commuter-rail tracks. Decisions at one project affect the other, but they are being designed and built by different teams.

And the New York Times reports that to address some of the cost problems and design flaws,

the roof [of the Hub] 'will no longer open and close,' said Christopher O. Ward, the executive director of the Port Authority of New York and New Jersey, which is building the hub. … Scrapping the idea would also eliminate the problem of the south wing coming within three or four feet of Tower 3, one of the office buildings being developed by Silverstein Properties. 'God forbid something failed,' Mr. Ward said.

Tuesday's Daily News headline sums it up the best: "It's a total mess!"

It goes on to report that "Ward blamed skyrocketing budgets, planning delays, and a dismal lack of coordination and rosy projection dates for the mess."

Most if not all of this can be explained by the breathtakingly bureaucratic structure of this project. It's an imbroglio of a major private developer, Larry Silverstein, a bunch celebrity architects, and a host of governmental and quasi-governmental entities, including the states of New York and New Jersey, the New York City municipal government, and the Lower Manhattan Development Corporation. And did I mention loud 9/11 victims' groups and the imperious New York City Police Department?

But perhaps the current mess is a blessing in terms of a genuine long-term economic resurgence for the site. Jane Jacobs said about the Ground Zero rebuilding and memorial, back in 2004, the last time I heard her speak in public, that "time gives perspective." Meaning, we shouldn't try, as these groups did, to rebuild the entire site all at once.

Rather, it would be better to redevelop slowly and in stages, with no major structures built on it until financial circumstances are expected to improve. In the meantime, Mr. Silverstein can rent smaller parcels to whomever he chooses, with the understanding, if he so wishes, that this is contingent on the construction of a larger project later.

Now, undoubtedly he would earn less than under the current plan, and I can sympathize with him, having taken out a 99-year lease on the site just months before the attacks in 2001. But while what happened to his investment (not to mention of course to the victims and their friends and families) because of the attack is terrible, he did get an insurance pay-out (though about half of what he wanted) and events like the terrorist attacks are just bad luck and, unfortunately, part of doing business these days.

If a building that I or any smaller investor owned/leased were destroyed by terrorists, in addition to collecting on my private insurance, should I be entitled to have the government rebuild it to status quo ante? I don't think so.

Admitting one's mistakes is the first step in correcting them. Reducing the governmental bureaucracy that both helps and hinders Mr. Silverstein recoup his investment, keeping things simple, is the right way to go from here.

***

As if all the havoc visited upon almost every single one of New York's recent public-private mega-projects — WTC, Hudson Yards, Moynihan Station, Atlantic Yards — hasn't been enough to caution the mayor. Mr. Bloomberg continues to push ahead with a major-redevelopment of Willets Point, Queens. You can read a recent Sun article about it here.

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