World Trade Center Talks Break Down

NEW YORK — State officials walked away from negotiations with the World Trade Center site developer Wednesday after failing to agree on who should build the 1,776-foot Freedom Tower and how to split billions of dollars in rebuilding money.

The dispute threatens to hold up the project.

The Port Authority of New York and New Jersey, which owns the site, wants to take over construction of the tower, saying it fears developer Larry Silverstein could run out of money before finishing the job.

The agency also proposed to build one other tower and leave Silverstein in charge of three smaller office buildings planned for the site.

Talks broke down Tuesday night after officials said Silverstein asked for too many financial concessions. Silverstein held the $3.2-billion lease on the World Trade Center complex before the Sept. 11, 2001, attacks.

Silverstein said he was shocked by the breakdown in negotiations because he thought progress was being made.

“It is inexcusable that the Port Authority abruptly abandoned the talks ... without a plan to move forward,” Silverstein said. “We are not sure where this leaves us now.”

Silverstein said he was prepared for an April groundbreaking on the Freedom Tower -- provided he received more than $3 billion in bonds meant for the site.

But Gov. George E. Pataki and Mayor Michael R. Bloomberg put a hold on the bonds pending a resolution of the negotiations. Pataki had given the two sides until Tuesday to work out their differences.

State officials and Silverstein have been negotiating who should build the five towers on the site, how much Silverstein should pay in monthly rent afterward, and how to divide the $4.6 billion in insurance proceeds from the trade center and the $3.35 billion in tax-exempt bonds meant for the site.

Port Authority officials and Pataki said Silverstein had put his own interests ahead of the public’s and presented an unacceptable offer 20 minutes before a midnight deadline.