Port Authority Puts 5 WTC Plans on Ice

Nearly three years after the state announced a deal to move forward with the project, plans to build housing at 5 World Trade Center are on ice.

During a Manhattan Community Board meeting this week, a Port Authority of New York and New Jersey official indicated that the plan for a development team led by Silverstein Properties and Brookfield Properties to build 1,200 apartments, of which a third would be affordable, is “currently on pause” as the parties involved figure out “exactly what is possible on the site.”

“The cost of everything is going up right now, so whatever the budget was a few years ago, we’ve seen increases of 50 percent on certain construction costs as well, and the situation in Iran and the Middle East certainly isn’t helping at all,” said Hersh Parekh, Port Authority’s deputy chief of intergovernmental affairs.

Perekh provided this update this week at a meeting held by Manhattan Community Board 1’s Quality of Life, Health, Housing & Human Services Committee.

He said the project hasn’t been “scrapped” and could still move forward in its current form, but said the parties were exploring whether modifications to the mix of affordable and market-rate units need to be made to “make sure that a residential tower with affordable units can be built.”

A spokesperson for Silverstein declined to comment Friday, and a request sent to Brookfield didn’t receive a response.

Thomas Topousis, a spokesperson for the Port Authority, said in a statement that the agency “remains fully committed to delivering a world-class tower at site 5, including the goal of one-third of the units being affordable.”

The Public Authorities Control Board approved the project in July 2023. At the time, Gov. Kathy Hochul touted a $65 million funding package from the state and the Battery Park City Authority’s joint purpose fund to help increase the number of affordable housing units planned. Under the proposal, 400 apartments would be affordable to those earning between 40 and 120 percent of the area median income. Residents who lived and worked in Lower Manhattan during and right after the 9/11 attacks would also be given priority for 20 percent of the affordable units.

The Port Authority board also approved a $12.5 million rent credit to help get the project off the ground. This credit, however, was contingent on the state funding being provided to the project by April 2024 and the developers maintaining the 33 percent affordability level. It’s unclear if these arrangements played a role in the project’s delay.

During this week’s meeting, Perekh indicated that the project affordability levels depend on “what the deal is and who the deal is with,” which on its face seems to raise the possibility that the development team may change. He repeatedly said that “conditions change” when explaining why the project, as previously envisioned, may no longer be feasible.

The agency, which owns the site, tapped Silverstein, Brookfield, Omni New York and Dabar Development Partners to build the tower in 2021. Minutes from a September 2023 board meeting indicated that the development team entered into a 27-month interim agreement with Port Authority, placing its long-term ground lease deal with Port Authority in escrow until the developers completed project designs and arranged financing.

The Broadsheet was first to report on Perekh’s comments.

Advocates and some lawmakers called for all 1,200 to be affordable, so the prospect of affordability levels being rolled back even further likely won’t sit well with those who demanded 100 percent of the units be offered at below-market rate rents.

The latest delay for 5 WTC comes a month after another long-stalled portion of the megadevelopment reached an important milestone. American Express announced in February that it will anchor 2 WTC, after Silverstein struggled for years to find a tenant to move forward with the office tower. These projects are the final pieces of the World Trade Center development, following the completion of 1, 3, 4 and 7 WTC.