Two Insurers Reach Deal with World Trade Center Site Owner

August 10, 2006

A deal in which the World Trade Center site’s owner would take control of two towers being built there from a private developer is a step closer to being finalized.

The Port Authority of New York and New Jersey filed a lawsuit in June after seven of its site’s insurance companies said the deal, inked in April, could impede how much money would be provided to rebuild. The suit sought assurances from the companies that property claims would be settled.

On Tuesday, the Zurich American Insurance Co. and the Employers Insurance Company of Wausau agreed the deal would not be a problem. That leaves five companies tied up in the suit, Port Authority officials said.

Under the deal, known as a conceptual framework, developer Larry Silverstein would build three towers on the site and pay an additional $1.75 billion (euro1.36 billion) in rent over his 99-year lease in exchange for promises to fill more than 1 million square feet of office space under his control with state and city leases. The Port Authority promised to secure additional leases and would move executive offices into the Freedom Tower.

The Port Authority would take over the Freedom Tower and a fifth tower, located just off the site, which Silverstein said likely would become an apartment building.

Port Authority and city and state officials praised the two insurance companies’ decision.

“I urge the remaining insurance carriers to follow Zurich’s lead so that we can continue to move full steam ahead with the rebuilding,” Mayor Michael Bloomberg said in a statement.

The Port Authority hoped to finalize the deal at its board meeting Sept. 21.

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