A new report predicts that the World Trade Center complex will be well worth the $16.7 billion Port Authority will spend on its redevelopment.
New York University’s Rudin Center for Transportation released a report on Thursday that estimates that the agency will eventually recoup 97.4 to 98.6 percent of its hefty investment in the project. The report asserts that despite bleak financial outlooks for the project, the World Trade Center’s redevelopment will essentially pay for itself through anticipated revenue, federal funds, lease payments and other sources.
Between 2002 and 2014, the Port Authority poured roughly $12.6 billion into redeveloping the site. The report estimates that Port Authority will spend more than $16.7 billion by the end of 2019 — $4 billion on the transportation hub alone — when its portion of the site is expected to be completed.
The costs have been partially offset by a series of capital contributions and insurance proceeds, including $3.1 billion in insurance from the destruction of the World Trade Center and $2.6 billion in contributions from the federal government and other public agencies. Silverstein Properties, which built 4 World Trade Center and is in the process of building 3 World Trade Center, paid $1.5 billion for lease and other payments and the Westfield Group paid $752 million for a partial interest in the World Trade Center retail complex.
The report also points out a number of anticipated future revenues that the agency will rake in, including between $800 million and $1 billion for the sale or lease of The 5 World Trade Center development site, $177 million annually from lease payments from Silverstein and other One World Trade Center tenants, starting in 2020. Westfield Group, which announced this week that their retail complex is fully leased, will pay more than $1 billion in retail-related payments, the report notes.
“The general view of New Yorkers, the media, and the civic community has been that the rebuilding of the World Trade Center, while necessary, has come at a major cost to the Port Authority’s bottom line,” said Mitchell Moss, director of the Rudin Center for Transportation. “Our findings tell a different story: The World Trade Center project will ultimately generate enormous economic return for New York and the region, while preserving the Port Authority’s ability to invest in its core transportation assets.”
The report also estimates that the project will indirectly generate $13 billion in wages and $33.8 billion in regional economic output through its various tenants. — Kathryn Brenzel