News Column

Vote on loan to test Port Authority reform

April 28, 2014

By Larry Higgs, Asbury Park Press, N.J.

April 28--NEW YORK -- A rare thing happened at Wednesday's Port Authority meeting. There was debate and dissent between normally silent commissioners over lending $1 billion to developer Larry Silverstein to complete the tower at 3 World Trade Center.

Some long time Port Authority watchdogs said that how commissioners ultimately vote on whether to provide $1.2 billion in loan guarantees to developer Larry Silverstein to build the entire 3 World Trade Center tower will indicate whether reform is real at the authority.

Others said the fate of reform efforts fare will hinge who replaces David Samson as board chairman and on how much pressure can be kept on the governors of both states to relinquish some of their power over the agency.

"The telltale sign is if they vote for the (3 WTC) guarantees, then it's business as usual.... There is no reform; it is window dressing," said Richard Hughes, co-founder of the Twin Towers Alliance, which has served as a watchdog group on the World Trade Center redevelopment. "If they vote it down, then reform is taking place."

Acting chairman Scott Rechler of New York kicked off a long and different board meeting by announcing an e-mail address at reform@panynj.gov for the public to suggest ideas how the troubled bi-state agency can reform itself. He also directed the agency's general counsel to "take a shot" at updating authority by-laws to reflect ideas brought up at Monday's reform panel discussion.

Then, after a presentation about the agency's negotiations with Silverstein about World Trade Center 3, Rechler invited the debate, asking all the commissioners for their opinion about proceeding with negotiations.

New York representative Kenneth Lipper was first to oppose fronting the money to Silverstein, even after the Alliance for Downtown New York president Jessica Lappin said it was the authority's duty to complete the entire WTC site to "heal the wounds of 9/11." Lipper disagreed.

"I've concluded it would not be appropriate for a public agency using public money through tolls to build a speculative real estate project, no matter how patriotic our feelings," Lipper said, listing what has been built so far, Towers 1, 7 and 4, a 9/11 memorial and a museum. "It's a commercial deal."

Lipper was joined in his opposition to proceeding by two New Jersey board members, David S. Steiner and William "Pat" Schuber.

"My opinion would be not to support one more dime," Schuber said. "I have significant problems with the deal and would not be able to support it."

Steiner said he wanted a deal with substantially less risk to the authority.

"I wouldn't be in favor. Larry Silverstein has had too good of a deal," he said.

The Twin Towers Alliance has filed numerous freedom of information requests with the authority, seeking disclosure of negotiations which led to the authority, rather than Silverstein, redeveloping the World Trade Center and has filed suit against the authority, seeking the information. Redevelopment of the World Trade Center site is estimated to cost $14.7 billion, about $7 billion of which are cost overruns.

Margaret Donovan, alliance co-founder said that commuters and travelers who use the agency's bridges, tunnels and terminals' old and congested facilities are paying the price for the WTC redevelopment overruns, blaming interference in the process by former New York Gov. George Pataki.

"The commuters and people of New Jersey have been screwed royally by the activity at ground zero," Hughes said.

Martin Robins, who was on a panel of five experts which addressed the oversight committee, said there is a tremendous opportunity for change, but completion hinges on several factors.

"Ultimately the aim is to get the governors to sign on to a different code of conduct; this has to happen," said Robins, Voorhees Transportation Institute director emeritus and a former authority planning director. "The special oversight committee has to issue a ringing report, identifying what went wrong, what can be done and asking for the public support."

However, Robins conceded the committee would be put in an awkward position if the governors refuse to buy into its recommendations. He said pressure from the media and the public will be needed to get gubernatorial support for change in that case.

"At this time, (the media's) thoughts carry weight because the public is catching on, if you articulate what's wrong and don't pull punches," Robins said, echoing statements he made to the committee on Monday.

Some change took place at the agency, starting with Wednesday's rare debate among the commissioners.

"April 23 was a watershed at the Port Authority," Hughes said.

"It's a new day at the Port Authority and a good way to go," Rechler said after the discussion and direction to have executive director Patrick Foye return with a new deal in May for consideration.

How well reforms proceed also depends on who replaces David Samson as chairman, an nomination made by Gov. Chris Christie, Robins said.

"The chairman is very important" to the reform effort. "My hope is that person in the near future is Rich Bagger.... He has performed in a trustworthy matter," Robins said.

Bagger, who served as Christie's chief of staff and headed his transition team, also is on the special oversight committee and suggested several of the recent changes to increase transparency in how the board does business.

"If the choice of chairman is for a (sitting) commissioner, everything can be different," Robins said. "He'd restore confidence in the Port Authority."

Samson was nominated to the board by Christie in January 2011 and was elected chairman one month later.

Hughes called for all commissioners but Lipper, to follow the lead of former commissioner Anthony Sartor and resign.

Sartor's conflicts of interest and other issues were detailed in a special Press investigation, the Port Authority money machine. Sartor's connection to engineering firm STV caused a firestorm in 2008 when STV and its partners won lucrative contracts for design of the World Trade Center Transportation Hub and other ground zero work. At the same time, STV was negotiating to buy the smaller engineering firm run by Sartor. The purchase of Paulus, Sokolowski & Sartor eventually fell through. Sartor did not respond to requests for comment earlier this month.

Hughes also criticized Rechler for being a "real estate man" and developer and not a "transportation man" at a transportation agency.

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(c)2014 Asbury Park Press (Neptune, N.J.)

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Source: Asbury Park Press (NJ)