State officials walked away from negotiations with the developer of the World Trade Center site after the two sides failed to come to terms over who should control the building of the 1,776-foot Freedom Tower at ground zero.
They also couldn’t agree on how to split billions of dollars in rebuilding money.
The dispute threatens to hold up the entire project.
The Port Authority of New York and New Jersey, which owns the trade center site, wants to take over construction of the tower, saying it fears developer Larry Silverstein could run out of money before finishing the job. The agency has proposed to leave Silverstein in charge of the smaller office buildings planned at the site.
Talks broke down Tuesday night after officials said Silverstein asked for too many financial concessions in return. Silverstein held the $3.2 billion lease on the World Trade Center complex before the Sept. 11, 2001, attacks.
Silverstein said he was shocked by the breakdown in negotiations because he felt they were making progress.
“It is inexcusable that the Port Authority abruptly abandoned the talks (Tuesday) night without a plan to move forward,” Silverstein said. “We are not sure where this leaves us now.”
Silverstein said he was still prepared for an April groundbreaking on the Freedom Tower — provided he receives more than $3 billion in bonds meant for the site.
But Gov. George Pataki and Mayor Michael Bloomberg put a hold on the bonds pending a resolution of the negotiations. Pataki had given the two sides until Tuesday to work out their differences.
State officials and Silverstein have been negotiating who should build the five towers on the site, how much Silverstein should pay in monthly rent afterward, and how to divide the $4.6 billion in insurance proceeds from the trade center and the $3.35 billion in tax-exempt bonds meant for the site.
Port Authority officials and Pataki said Silverstein had put his own interests ahead of the public’s and presented an unacceptable offer 20 minutes before a midnight deadline.
Pataki, who has sought to make rebuilding ground zero the centerpiece of his legacy in his last year of office, said that Silverstein’s development company “has betrayed the public’s trust and that of all New Yorkers.”
Bloomberg urged Silverstein Properties “to temper its individual interests and focus on what’s best for New York City.”
Kenneth Ringler, executive director of the Port Authority, said that talks with Silverstein had been “terminated,” although he said he would look at reasonable proposals.
“We’re not going to sit down with them,” Ringler said. “We’re not going to be held hostage at this site.”