The Real Deal New York

Port Authority’s scandalous real estate investments: OPINION

Track record shows agency doesn't belong in the property business, writes NYT's Nocera

April 22, 2014 02:25PM

Renderings of 3 World Trade

Renderings of 3 World Trade

The Port Authority of New York and New Jersey’s real scandal isn’t the lane-closing on the George Washington Bridge — it is a decades-long practice of diverting the body’s funds into real estate investments, according to New York Times columnist Joe Nocera.

The Port Authority, Nocera wrote yesterday, is charged with improving transportation infrastructure in both states. Yet tolls creep up while needed funds are funneled into real estate projects like the World Trade Center, which claimed at least $7.7 billion in the rebuilding of the area around Ground Zero after Sept. 11. An additional $4 billion “went to an over-the-top PATH station,” Nocera opined, while another $3.3 billion went to the building of One World Trade Center.

“Whether or not building commercial skyscrapers was the right way to rebuild Ground Zero, what can be said for sure is that the Port Authority has shown, yet again, that it doesn’t belong in the real estate business,” Nocera wrote. One World Trade center, he added, is the “most expensive high-rise ever built in America, and it is costing Port Authority a fortune.” And yet only 55 percent of the property’s 2.6 million square feet have been leased, “and most of that is at significant loss,” Nocera wrote.

His arguments then circle back to Silverstein Properties’ current push for an additional $1.2 billion in loans to build 3 World Trade Center, which Nocera referred to as Silverstein’s “funder of last resort.”

The debate surrounding the potential loan is unusual, according to Nocera, who wrote that in the past commissioners typically voted unanimously to approve such ventures. But now, with a glut of empty office space in the area, the market is projecting the message that this is not the time for another commercial skyscraper downtown.

“If, after that, Silverstein gets his loan guarantees, well, there will finally be no doubt that a scandal has taken place,” Nocera wrote. [NYT]Julie Strickland

  • WannaBeLandlord

    Port Authority shouldn’t be in the airport, bridge, tunnel, bridge, or bus business either.

  • noclist

    When you charge $15 to cross a river, you can afford losing on real estate investments.

  • BustoHell

    The Port Authority Bus Terminal is the closest thing to Hell on Earth that I have ever seen.

  • JohnACritic

    The officials at the Port Authority are in a word “fools” involved in a game in which they have absolutely no understanding. Their ignorance has resulted in massive cost overruns from the first WTC to the present one. That money is sorely needed for bridges, tunnels, airports, ports etc. not office buildings. Silverstein should not get another nickel from the Port. If they give him any more money they should all be fired. He has milked that cash cow long enough and gotten away with it.

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