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Profile: Larry Silverstein
Larry Silverstein was a participant or observer in the following events:
[Source: Silverstein Properties publicity photo]Real estate development and investment firm Silverstein Properties and real estate investment trust Westfield America Inc. finalize a deal worth $3.2 billion to purchase a 99-year lease on the World Trade Center. The agreement covers the Twin Towers, World Trade Center Buildings 4 and 5 (two nine-story office buildings), and about 425,000 square feet of retail space. [New York Times, 4/27/2001; Port Authority of New York and New Jersey, 7/24/2001; IREIzine, 7/26/2001] Westfield America Inc. will be responsible for the retail space, known as the Mall. Silverstein Properties’ lease will cover the roughly 10 million square feet of office space of the Twin Towers and Buildings 4 and 5. Silverstein Properties already owns Building 7 of the WTC, which it built in 1987. This is the only time the WTC has ever changed hands since it was opened in 1973. [International Council of Shopping Centers, 4/27/2001; Westfield Group, 7/24/2001; Daily Telegraph, 9/11/2001; New York Times, 11/29/2001; CNN, 8/31/2002] It was previously controlled by the New York Port Authority, a bi-state government agency. [Wall Street Journal, 5/12/2007] Silverstein and Westfield are given the right to rebuild the structures if they are destroyed. [New Yorker, 5/20/2002]
Silverstein Properties Not the Highest Bidder - Silverstein Properties’ bid for the WTC, at $3.22 billion, was the second highest after Vornado Realty Trust’s, at $3.25 billion. Silverstein Properties won the contract only after protracted negotiations between the Port Authority and Vornado Realty Trust failed. The privatization of the WTC has been overseen by Lewis M. Eisenberg, the chairman of the Port Authority. Eisenberg, a financier, is involved in Republican politics. [New York Times, 3/17/2001; Forward, 8/20/2004]
Banks Provide Most Money for Deal - Larry Silverstein, the president of Silverstein Properties, only uses $14 million of his own money for the deal. His partners, who include real estate investors Lloyd Goldman and Joseph Cayre, put up a further $111 million, and banks provide $563 million in loans. [Brill, 2003, pp. 156; New York Times, 11/22/2003; South Florida CEO, 2/2005; Wall Street Journal, 9/11/2008]
Silverstein's Lenders Want More Insurance - The Port Authority had carried only $1.5 billion in insurance coverage on all its buildings, including the WTC, but Silverstein’s lenders insist on more, eventually demanding $3.55 billion in cover. [American Lawyer, 9/3/2002] After 9/11, Larry Silverstein will claim the attacks on the World Trade Center constituted two separate events, thereby entitling him to a double payout totaling over $7 billion. [Daily Telegraph, 10/9/2001; Guardian, 8/18/2002] Eventually, after several years of legal wrangling, a total of $4.55 billion of insurance money will be paid out for the destruction of the WTC (see May 23, 2007). Most of this appears to go to Silverstein Properties. How much goes to Westfield America Inc. is unclear. [New York Post, 5/24/2007]
John O’Neill begins his new job as head of security at the WTC. O’Neill had been the special agent in charge of the FBI’s National Security Division in New York, and was the bureau’s top expert on al-Qaeda and Osama bin Laden. [New York Magazine, 12/17/2001; New Yorker, 1/14/2002] He’d left his job with the FBI just the day before (see August 22, 2001). His friend Jerome Hauer, who is the former head of New York’s Office of Emergency Management, had found him the job at the World Trade Center. Developer Larry Silverstein, who recently took over the lease of the WTC (see July 24, 2001), had been highly impressed with O’Neill but insisted he start in the post no later than the first week of September, when his firm Silverstein Properties is set to assume control of the buildings. O’Neill had agreed to this. [Weiss, 2003, pp. 336-338, 345-346 and 349-351] After hearing that O’Neill has got this job, Chris Isham, a senior producer at ABC News who is a close friend, says to him, “Well, that will be an easy job. They’re not going to bomb that place again.” O’Neill replies, “Well actually they’ve always wanted to finish that job. I think they’re going to try again.” [PBS Frontline, 5/31/2002] After a few days as the WTC security director, O’Neill will move into his new office on the 34th floor of the South Tower. [Weiss, 2003, pp. 353-354 and 366]
Silverstein Properties, Larry Silverstein’s company which took over the lease of the WTC weeks earlier (see July 24, 2001), has a meeting planned for the morning of 9/11 in it’s temporary offices on the 88th floor of the WTC North Tower, along with Port Authority officials. It is to discuss what to do in the event of a terrorist attack. However, this evening the meeting is canceled because one participant cannot attend. [New York Times, 9/12/2001; Ha'aretz, 11/21/2001] Of Silverstein Properties’ 160 staff, 54 are in the North Tower when it is hit, and four of them die. [Globe and Mail, 9/7/2002]
WTC leaseholder Larry Silverstein is supposed to be working today in the temporary offices of his company, Silverstein Properties, on the 88th floor of the North Tower. However, at his Park Avenue apartment, Silverstein’s wife reportedly “laid down the law: The developer could not cancel an appointment with his dermatologist, even to meet with tenants at his most important property.” [New York Observer, 3/17/2003; New York Magazine, 4/18/2005] He is therefore not at the WTC when it is hit, and first hears of the attacks when an associate calls him from the lobby of one of the WTC buildings. [Real Deal, 1/2004] Two of Silverstein’s children—his son, Roger, and daughter, Lisa—work for his company and have been regularly attending meetings with WTC tenants at Windows on the World (the restaurant at the top of the North Tower). Yet this morning they are running late. According to the New York Observer, “If the attack had happened just a little later, Mr. Silverstein’s children would likely have been trapped at Windows.” [New York Observer, 3/17/2003] Fifty-four of Silverstein Properties’ 160 staff are in the North Tower when it is hit, and four of them die. [Globe and Mail, 9/7/2002] Silverstein signed the lease on the WTC less than two months previously, and later will attempt to get $7 billion in insurance for the destruction of the towers (see July 24, 2001).
Jeffrey Scott Shapiro. [Source: University of Florida]Larry Silverstein, who recently took over the lease of the World Trade Center complex (see July 24, 2001), discusses possibly bringing down WTC Building 7 in a controlled demolition in a telephone conversation with his insurance carrier, according to a reporter who is at the WTC site this afternoon. [Fox News, 4/22/2010] WTC 7 is a 47-story office building located just north of the Twin Towers. The National Institute of Standards and Technology (NIST) will say it suffered some structural damage (see 10:28 a.m. September 11, 2001) when the North Tower collapsed (see 10:28 a.m. September 11, 2001) and it has fires on several floors (see (10:28 a.m.-5:20 p.m.) September 11, 2001). It will collapse at 5:20 p.m., apparently becoming the first tall building ever to come down primarily as a result of fire (see (5:20 p.m.) September 11, 2001). [National Institute of Standards and Technology, 11/2008, pp. xxxv-xxxvi]
Silverstein Allegedly Wants WTC 7 Demolished - Investigative reporter Jeffrey Scott Shapiro, who is at the scene of the attacks in New York, will later recall: “Shortly before [WTC 7] collapsed, several NYPD officers and Con Edison workers told me that Larry Silverstein… was on the phone with his insurance carrier to see if they would authorize the controlled demolition of the building, since its foundation was already unstable and expected to fall. A controlled demolition would have minimized the damage caused by the building’s imminent collapse and potentially save lives.” Shapiro will add: “Many law enforcement personnel, firefighters, and other journalists were aware of this possible option. There was no secret.” [Fox News, 4/22/2010] Preparing a large building for demolition usually takes weeks, or even months. This time is spent on operations such as wrapping concrete columns to ensure pieces do not fly off. [Baltimore Sun, 2/26/1995; PBS NOVA, 12/1996; Construction Equipment Guide, 2/24/2005]
Discussion of Demolition Later Denied - Silverstein will later recall discussing WTC 7 over the phone with the commander of the New York Fire Department, and telling him, “We’ve had such terrible loss of life, maybe the smartest thing to do is pull it” (see After 12:00 Noon September 11, 2001), but a spokesman will subsequently claim that Silverstein was referring to withdrawing firefighters from the building, not bringing WTC 7 down with explosives. [US Department of State, 9/16/2005; BBC, 7/4/2008] At the end of a three-year investigation into the building’s collapse, NIST will say WTC 7 “did not collapse from explosives,” but critics will dispute this conclusion (see August 21, 2008). [Associated Press, 8/21/2008; New York Times, 8/21/2008]
At some point during the afternoon of 9/11, WTC leaseholder Larry Silverstein receives a phone call from the Fire Department commander, where they discuss the state of Building 7 of the WTC complex. Silverstein will discuss this call in a PBS documentary broadcast in 2002, saying that he told the commander, “You know, we’ve had such terrible loss of life, maybe the smartest thing to do is pull it. And they made that decision to pull and then we watched the building collapse.” [PBS, 9/10/2002] Some people suggest that by “pull it” Silverstein meant the deliberate demolition of the building. But a spokesman for Silverstein states that he was expressing “his view that the most important thing was to protect the safety of those firefighters, including, if necessary, to have them withdraw from the building.” [US Department of State, 9/16/2005] Yet this claim is contradicted by some accounts, according to which firefighters decided early on not to attempt fighting the fires in WTC 7 (see After 10:28 a.m. September 11, 2001)(see (11:30 a.m.) September 11, 2001). According to Haaretz, “In the afternoon of September 11, the Fire Department informed him that the smaller 7 World Trade Center building, which he owned, was going to collapse.” [Ha'aretz, 11/21/2001] Building 7 eventually collapses at around 5:20 in the afternoon (see (5:20 p.m.) September 11, 2001).
David Childs. [Source: Publicity photo]Developer Larry Silverstein, who recently took over the lease of the World Trade Center (see July 24, 2001), later tells journalist Steven Brill that he’d been so sickened by the destruction on 9/11, and by the deaths of four of his employees in the WTC, that he did not focus on insurance or financial matters until “perhaps two weeks later.” But according to two people who call him this morning to offer their sympathy, Silverstein soon changes the subject: “He had talked to his lawyers… and he had a clear legal strategy mapped out. They were going to prove, Silverstein told one of the callers, that the way his insurance policies were written the two planes crashing into the two towers had been two different ‘occurrences,’ not part of the same event. That would give him more than $7 billion to rebuild, instead of the $3.55 billion that his insurance policy said was the maximum for one ‘occurrence.’ And rebuild was just what he was going to do, he vowed.” By mid-morning, he calls his architect David Childs, and instructs him to start sketching out a plan for a new building. He tells Childs to plan to build the exact same area of office space as has been destroyed. In fact, Silverstein’s lawyers claim the developer had been on the phone to them on the evening of 9/11, wondering “whether his insurance policies could be read in a way that would construe the attacks as two separate, insurable incidents rather than one.” [Brill, 2003, pp. 18-19 and 39-40; Real Deal, 1/2004] Yet Jerome Hauer, the former director of New York’s Office of Emergency Management, had gone to Silverstein’s office on 9/11, and later claims that Silverstein’s primary concern that day had been his employees, and whether they had gotten out of the WTC. “Larry was absolutely devastated,” he says. [Weiss, 2003, pp. 374] Following a lengthy legal dispute, Silverstein will eventually receive $4.55 billion in insurance payouts for the destruction of the WTC (see May 23, 2007). [New York Post, 5/24/2007]
A New York Times article theorizes that diesel fuel tanks were responsible for the collapse of Building 7 of the WTC. It collapsed at 5:20 p.m. on 9/11, even though it was farther away from the Twin Towers than many other buildings that remained standing (see (5:20 p.m.) September 11, 2001). It was the first time a steel-reinforced high-rise in the US had ever collapsed in a fire. One of the fuel tanks had been installed in 1999 (see June 8, 1999) as part of a new “Command Center” for Mayor Rudolph Giuliani. [New York Times, 3/2/2002; Dow Jones Business News, 9/10/2002] However, in interviews, several Fire Department officers who were on the scene say they were not aware of any combustible liquid pool fires in WTC 7. [Fire Engineering, 9/2002] And, according to the National Institute of Standards and Technology (NIST), between 11:30 a.m. and 2:30 p.m. on 9/11, “No diesel smells [were] reported from the exterior, stairwells, or lobby areas” of WTC 7. [National Institute of Standards and Technology, 6/2004, pp. L-22] Curiously, given all the Wall Street scandals later in the year, Building 7 housed the SEC files related to numerous Wall Street investigations, as well as other federal investigative files. All the files for approximately 3,000 to 4,000 SEC cases were destroyed. Some were backed up in other places, but many were not, especially those classified as confidential. [New York Law Journal, 9/17/2001] Lost files include documents that could show the relationship between Citigroup and the WorldCom bankruptcy. [Street, 8/9/2002] The Equal Employment Opportunity Commission estimates over 10,000 cases will be affected. [New York Law Journal, 9/14/2001] The Secret Service had its largest field office, with more than 200 employees, in WTC 7 and also lost investigative files. Says one agent: “All the evidence that we stored at 7 World Trade, in all our cases, went down with the building.” [Tech TV, 7/23/2002] The IRS and Department of Defense were also tenants, along with the CIA, which, it has been revealed, had a secret office in Building 7. [CNN, 11/4/2001; New York Times, 11/4/2001; Federal Emergency Management Agency, 5/1/2002, pp. 5-2; New York Magazine, 3/20/2006] A few days later, the head of the WTC collapse investigation says he “would possibly consider examining” the collapse of Building 7, but by this time all the rubble has already been removed and destroyed. [US Congress, 3/6/2002]
Industrial Risk Insurers agrees to make a full payment under its $861 million policy for the loss of World Trade Center Building 7, a 47-story office building which completely collapsed late in the afternoon of 9/11. [Insurance Journal, 6/7/2002; Wall Street Journal, 7/10/2002; Newsday, 10/21/2003] WTC 7 was owned by Silverstein Properties, which also acquired the lease on the Twin Towers six weeks before 9/11. [International Council of Shopping Centers, 4/27/2001; Port Authority of New York and New Jersey, 7/24/2001] Larry Silverstein, the president of Silverstein Properties, intends to use $489 million of the insurance payment to cover an existing mortgage on WTC 7, and $65 million of it for other debts and costs. The remaining $307 million will go toward the construction costs of the new WTC 7. [Bloomberg, 1/14/2003; New York Daily News, 1/14/2003] He is currently in a dispute with the carriers of his insurance on the Twin Towers, over whether the 9/11 attack constituted one or two separate events, and this will not be settled until mid-2007 (see May 23, 2007). [Wall Street Journal, 9/11/2002; New York Times, 5/23/2007]
Insurance companies reach a $2 billion settlement with real estate development and investment firm Silverstein Properties for the destruction of the World Trade Center on 9/11. The agreement, which involves seven of the two-dozen insurers for the WTC, ends more than five years of legal wrangling. The other insurance companies involved have already paid out about $2.55 billion, meaning the total payout will be $4.55 billion. In September 2006, Silverstein Properties and the New York Port Authority had agreed to split the reconstruction of the WTC site between them, and to divide up the remaining insurance proceeds accordingly. Consequently, the Port Authority is to receive about $870 million from the latest settlement, while the remaining $1.13 billion will go to Silverstein Properties. [New York State, 5/23/2007; New York Times, 5/23/2007; Newsday, 5/23/2007; Reuters, 5/23/2007] Silverstein Properties acquired the lease on several of the World Trade Center buildings, including the Twin Towers, in July 2001 (see July 24, 2001). [Port Authority of New York and New Jersey, 7/24/2001] As the New York Times summarizes, “At that time, two dozen insurers had signed binders pledging to provide $3.5 billion in insurance coverage, but had not finished the documentation.” Therefore, after 9/11, an “ugly dispute developed over which insurance policy was in effect at the time of the attack. Mr. [Larry] Silverstein [the president of Silverstein Properties] argued that since two jetliners slammed into the two towers, he was entitled to a double payment on the $3.5 billion policy. But many of the insurers countered that they had agreed to a different policy that did not permit double claims.” [New York Times, 5/23/2007] In 2004, federal juries had decided that Silverstein Properties could collect a maximum of $4.68 billion for the loss of the WTC. The current settlement therefore means the insurers are obliged to pay 97.2 percent of that maximum. [Bloomberg, 5/23/2007; New York State, 5/23/2007; Newsday, 5/23/2007; Reuters, 5/23/2007] Silverstein Properties had separately been awarded $861 million of insurance money in 2002 for the loss of World Trade Center Building 7, which also collapsed on 9/11 (see May 2002).
It is revealed that Larry Silverstein, the developer of Ground Zero, is seeking $12.3 billion in damages from airlines and airport security companies for the attacks on 9/11. Silverstein sought the damages in a claim filed in 2004, alleging that the companies failed to prevent the hijackers from taking over the planes that destroyed the World Trade Center buildings. The size of his claim was previously unknown, but is now revealed at a status conference in the US District Court in Manhattan. [New York Times, 3/27/2008] Of the $12.3 billion sought, $8.4 billion would be to replace the property destroyed in the attacks, and the other $3.9 billion would cover lost income and expenses associated with renting the new buildings. Companies named in the suit include American Airlines, United Airlines, Continental Airlines, Boeing, and the Massachusetts Port Authority (Massport), which manages Logan Airport in Boston, from where the two planes that hit the WTC took off. [CNN, 3/27/2008] Silverstein’s case is consolidated with similar, earlier lawsuits by other property owners and some families of 9/11 victims. Silverstein is by far the biggest of the claimants. A lawyer for the airlines says that if Silverstein wins, it could push the total claims beyond the amount of insurance the airlines and security companies have available. Silverstein, the CEO and president of Silverstein Properties, only signed the 99-year lease on the World Trade Center six weeks before 9/11 (see July 24, 2001). He has already won nearly $4.6 billion in insurance payments stemming from the attacks (see May 23, 2007). [New York Times, 3/27/2008; NY1 News, 3/28/2008]
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