IP: Terrorism escape clause in World Trade Center lease

[David Farber <dave () farber net>]

> From: GLIGOR1 () aol com
> Date: Sat, 15 Sep 2001 13:08:23 EDT
>
> Terrorism escape clause in World Trade Center lease
> By Norma Cohen, Property Correspondent, in London - Sep 14 2001 19:18:26
> FT.COM
>
> The owners of the demolished World Trade Center in lower Manhattan 
> acquired the buildings just two months ago under a 99-year lease allowing 
> them to walk away from their investment in the event of "an act of terrorism".
> The owners, Silverstein Properties and Westfield America - a shopping mall 
> specialist - purchased the buildings from the Port Authority of New York 
> and New Jersey for $3.2bn in July and completed the financing just two 
> weeks ago.
> Neither of the buyers would comment on terms of the lease, but such a 
> clause would be considered reasonable for the purchase of a building that 
> had already seen a terrorist bombing and was considered a possible future 
> target.
> The lease document is understood to spell out certain conditions under 
> which the lessees could walk away from their obligation to spend $200m in 
> capital improvements and pay annual rental charges.
> It is understood that the buildings are insured for more than $3bn, enough 
> to cover rebuilding costs.
> However, an executive connected to the buyers said: "Ultimately, the 
> decision will be made by politicians. It is a state and federal government 
> decision about whether or not to rebuild on the site."
> Larry Silverstein, chairman of Silverstein Properties, said yesterday that 
> he was determined to rebuild on the site. "It would be the tragedy of 
> tragedies not to rebuild on this part of New York," Mr Silverstein was 
> quoted as telling the Wall Street Journal.
> "It would give the terrorists the victory they seek," he said, adding that 
> he felt a moral obligation to rebuild on the site.
> Although there have been some suggestions that the site should be left 
> vacant as a memorial park, its location at the heart of America's 
> financial capital means it is probably far too valuable to lie undeveloped.
>
>
> © Copyright 
> <http://globalelements.ft.com/Common/Copyright/copyright_global.html>The 
> Financial Times Limited 2001.



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