newjerseynewsroom.com

BY AVI FRISCH

NEWJERSEYNEWSROOM.COM

COMMENTARY

The crashing economy and the end of New York City's building boom have made completion of the World Trade Center project seemingly impossible, unless the Port Authority itself agrees to finance the office towers. So far though, the Port Authority has resisted providing financing for more than one of the buildings, though there is political pressure for them to build more. As has been reported in the New York Times, Sheldon Silver, the Speaker of the New York State Assembly has called for the Port Authority to assist Silverstein Properties, Inc., in building two towers, along with the one tower being built by the Port Authority, while, according to the Times, New Jersey Governor Jon Corzine and New York Governor David Paterson "have expressed wariness about pouring additional public funds into the office towers."

The oft-delayed World Trade Center redevelopment has long been mired in delays and setbacks almost from the beginning. Deadlines have been missed and buildings downsized. Arts organizations have been expelled from the redevelopment program and the architecture of the memorial and PATH station have been significantly redesigned to keep escalating costs down. Certainly those difficulties relate to the effort to replace the Twin Towers.

Silverstein Properties, Inc., which held the lease on the World Trade Center before the events of September 11, 2001 has planned to rebuild three towers at the site, other than the building known as 7 World Trade Center which replaced a prior building of the same name.

One item that does not appear to have been discussed is the Port Authority's lack of any legal right to spend money on private development.

Contrary to popular belief and the image held out by the Port Authority, the Port Authority does not have unlimited powers to do as it pleases. Its functions and powers are strictly defined by laws enacted by New Jersey and New York.

The Port Authority was originally created in the 1920's to build a bi-state freight rail connection so that freight from New Jersey would no longer need to be floated across the Hudson to Manhattan and Brooklyn and to generally improve the movement of freight around the region. As many know, the Port Authority expanded into many areas, but never actually accomplished its initial purpose.

Shortly after its creation, the Port Authority was given control over the building of bridges and tunnels across the Hudson and then later gained supremacy over the region's airports. The cash cows that the crossings turned into left the Port Authority with huge toll revenue money, but not many means or places to spend it.

Because the P.A. wanted to avoid having the money siphoned off to transit projects to appease bondholders, the agency began creating special projects that were specifically approved by sponsored legislation. In the 1960's, this led to the Port Authority taking control of the PATH system and the beginning of the original World Trade Center. In subsequent years, the Authority built office buildings, waterfront redevelopments and industrial parks. In general, the Authority got legislative approval for each of the projects it undertook that expanded on its core transportation and mobility mission. This includes the legislation authorizing the World Trade Center.

Redevelopment of the World Trade Center has not been approved by new legislation. In 1962, the Port Authority was granted permission to build the World Trade Center as a way of creating a central location for all of the participants in trade at the port, but that is not what materialized and the buildings turned into standard, if very tall, office towers. In retrospect, the basis on which the Port Authority got permission to build what it wanted was never fulfilled, leading to some doubt as to whether redevelopment of the Trade Center site is encompassed within that original legislation.

It is clear that the Port Authority has the right to rebuild the PATH terminal at the World Trade Center, as the legislature has given the Port Authority dominion over PATH, and authorized the development of facilities for PATH to improve its service, a purpose that is as valid today as ever. Nowhere in the authorizing legislation, however, is the Port Authority given authority to pay for the growth of private development at the World Trade Center or elsewhere.

Even if the Port Authority is itself authorized to rebuild the office towers at the World Trade Center, which is questionable since the purpose given in the statute no longer applies, it has no authority to pay for office buildings built by private developers for a private purpose. The Port Authority Media Relations Office declined to comment for this article explaining that Mayor Bloomberg had ordered a press blackout in regard to all substantive issues relating to these office towers. It is well beyond the Port Authority's role to be the lender of last resort for Silverstein Properties, which did not respond to an emailed request for comment for this column.

As a specially formed entity meant to serve specific purposes, and authorized to borrow funds to do so, the Port Authority is not allowed to spend money on unrelated private projects, as nowhere does the bi-state compact or related statute allow such expenditures. It is important to remember that the New Jersey Constitution has strict limits on borrowing by the State and frowns upon expansive borrowing without voter approval. The New York Constitution has similar limitations on borrowing. A court reviewing these types of expenditures would have to look at the legal powers of the Authority and decide if this is within those powers, and as this would be a challenge to corporate authority, the Port Authority's determination should not be entitled to any deference.

Clearly, the impulse to rebuild the World Trade Center is strong. Emotions certainly run high when thinking about the site - particularly for New York politicians who are ever eager to take a larger share of the Port Authority's funding for New York projects. The political forces should guide the money toward true rebuilding of the region through well planned projects and not waste money on redundant office towers. There are plenty of worthy projects that could be undertaken to ensure that the New York region remains vibrant well into the future, but these office towers are not among them. If the Authority does provide financing, even for one tower, a court challenge to its actions would be appropriate and hopefully successful.