Silverstein insurance on WTC7 (again)

[GlennB]

aarrgh

A few weeks ago I was investigoogling WTC7 insurance and came across a court report which suggested that Silverstein Properties were being stymied for approx 50% of the payout on WTC7, owing to (as I recall) a 2-year limitation on rebuildingor something similar.

Now, for the life of me, I can't find that report again.

Any help gratefully received. A lot of CT'ists talk of "Lucky Larry" as if he was written vast personal cheques to use for his own amusement. As far as I can see he's running serious losses so far.

 

[Chaos]

aarrgh

A few weeks ago I was investigoogling WTC7 insurance and came across a court report which suggested that Silverstein Properties were being stymied for approx 50% of the payout on WTC7, owing to (as I recall) a 2-year limitation on rebuildingor something similar.

Now, for the life of me, I can't find that report again.

Any help gratefully received. A lot of CT'ists talk of "Lucky Larry" as if he was written vast personal cheques to use for his own amusement. As far as I can see he's running serious losses so far.

He most definitely is running serious losses. First of all, the WTC 1 and 2 buildings were severely underinsured, AND, when the attacks were ruled to be one event, not two, he only got the insured sum once, not twice as he expected. This guy is so ****ed by 9/11, financially speaking, that I can just say anyone who calls him "Lucky Larry" doesn´t have enough functioning brain cells left to form a synapse.

 

[Bell]

What conspiracies (if any) would there have been about WTC7 if Larry Silverstein's name was John Johnson?

 

[defaultdotxbe]

the main argument i see is that even though the insuance payout was lower than the cost to rebuild, the towers needed asbestos removal, and the cost of that was more than the loss from the destruction of the towers (although that seems REALLY unlikely to me)

another thing that comes up is that the towers were as much as half-empty and no one was renting any space in them anymore, although that doesnt seem too likely either



i think we need to compile a comprehensive list of debits vs credits in this case, cost to rebuild, insurance payout, asbestos removal, rent income, lost rent from the last 5 years, rent larry pays to PANYNJ, etc etc

 

[GlennB]

... This guy is so ****ed by 9/11, financially speaking, that I can just say anyone who calls him "Lucky Larry" doesn´t have enough functioning brain cells left to form a synapse.

Doesn't quite answer my question, but I'd like to quote you if I may

 

[MikeW]

One argument tends to run that the Port Authority "got lucky" with 9/11 because they didn't have to pay the costs of dismantling the towers. Of course this is never actually accompanied with any evidence that the towers needed to be dismantled, and the Port Authority financial statements (http://www.panynj.gov/AboutthePortAuthority/InvestorRelations/AnnualReport/) show they didn't get lucky at all. Apart from the obvious initial material costs of 9/11, they point to other effects, like this:

The terrorist attacks shocked an already weakened U.S. economy into recession by sapping consumer confidence, causing demand for air travel to deteriorate. At the three major airports, passenger traffic, which was projected to achieve new highs, dropped by a total 11.5 percent for the year, the largest decline in our region’s history. Aircraft movements declined by 7.1 percent and cargo volume fell 23 percent from the prior year. Airport parking revenues were also down, by about 30 percent. In the wake of the terrorist attacks, more stringent security measures at the region’s airports posed challenges as airlines followed new federal mandates for passenger screening and baggage handling.

At the bistate region’s interstate tunnels and bridges, annual traffic volumes declined for the first time since 1994. Eastbound traffic for the year 2001 totaled 121.9 million vehicles — 3.5 percent below 2000 levels. Traffic at the Holland and Lincoln tunnels fell 10.6 percent, due primarily to the closure of the Holland Tunnel from September 11 through October 14, as well as by the single-occupancy vehicle restrictions at the two tunnels following the attacks. New York City’s ban on single occupancy automobiles remains in effect weekday mornings at the Holland and Lincoln tunnels. Commercial vehicles using the George Washington Bridge are currently restricted to the upper level.

Before September 11, PATH ridership was projected to reach another new record of 75.1 million passenger trips. As a result of the closure of the World Trade Center terminal and Exchange Place station, PATH’s 2001 ridership declined to 69.8 million. Weekday ridership declined from a pre-September 11 average of 257,967 to 202,092.
http://www.panynj.gov/AboutthePortA...ions/AnnualReport/pdfs/2001_Annual_Report.pdf

 

[Gravy]

He most definitely is running serious losses. First of all, the WTC 1 and 2 buildings were severely underinsured, AND, when the attacks were ruled to be one event, not two, he only got the insured sum once, not twice as he expected. This guy is so ****ed by 9/11, financially speaking, that I can just say anyone who calls him "Lucky Larry" doesn´t have enough functioning brain cells left to form a synapse.

I don't quite agree with that assessment. Some of the insurers were held liable for payouts on two attacks, according the clauses in their policies. That's why the total awarded to Silverstein Properties was $4.6 billion on policies valued at $3.5 billion. Not all of the money has been paid out yet.

AFAIK, the $861 million policy on WTC 7 was paid promptly. There was a clause in that policy that required Silverstein to begin rebuilding an office building of equal or greater floor space within two years. The City of New York kicked in with support for another $400 million in Liberty Bonds, without which Silverstein would have had to pursue financing for WTC 7 and would not have started building without an anchor tenant.

People sometimes mention Silversteins continuing lease payments and loss of rental income, but these expenses are mostly covered by the various insurance policies.

 

[Mancman]

the main argument i see is that even though the insuance payout was lower than the cost to rebuild, the towers needed asbestos removal, and the cost of that was more than the loss from the destruction of the towers (although that seems REALLY unlikely to me)

another thing that comes up is that the towers were as much as half-empty and no one was renting any space in them anymore, although that doesnt seem too likely either

Aye, the asbestos garbage is a common one. I've seen idiots claim it would have cost $15bn to remove it. They always neglect to state, or are ignorant of the fact that only WTC1 had asbestos, upto floor 38.

I did some back of envelope figures on it, extrapolating from the clean up cost touted for Tour Montparnasse in Paris (€4 per floor) and came up with a $481 million cost.

Debunking 9/11 has more on the asbestos and the occupancy, which was at 98% in February 2001: http://www.debunking911.com/fires.htm

 

[LashL]

aarrgh

A few weeks ago I was investigoogling WTC7 insurance and came across a court report which suggested that Silverstein Properties were being stymied for approx 50% of the payout on WTC7, owing to (as I recall) a 2-year limitation on rebuildingor something similar.

Now, for the life of me, I can't find that report again.

Any help gratefully received. A lot of CT'ists talk of "Lucky Larry" as if he was written vast personal cheques to use for his own amusement. As far as I can see he's running serious losses so far.

I don't recall seeing any news about insurers not paying out on WTC7.

I did see something to the effect that some of the insurers were balking at paying the totality of what they are on the hook for, on the basis of the agreement between Silverstein Properties and the Port Authority that certain of the buildings will revert to the Port Authority.

There is approximately $1.5 billion at issue on this point, it appears.

"Under the new arrangement put together in April, Mr. Silverstein, who leased the trade center six weeks before it was destroyed, would build three of the towers on the site. But he has surrendered control of the Freedom Tower and one other tower to the Port Authority of New York and New Jersey, which owns the 16-acre property. Some insurers seem to be balking at a payout that does not go exclusively to Silverstein."

http://www.silversteinproperties.com/news_content.aspx?news_id=21

I don't know if they ultimately went to court over the issue, but I don't see it listed on the NY District Court site that holds the consolidated litigation matters here: http://www.nysd.uscourts.gov/Sept11Litigation.htm

However, the list of linked documents on that page is not exhaustive of all of the proceedings.

 

[twinstead]

So can I assume that any claims that Silverstein profited from the destruction of the WTC are pulled out of, well, out of where the sun doesn't shine?

 

[defaultdotxbe]

So can I assume that any claims that Silverstein profited from the destruction of the WTC are pulled out of, well, out of where the sun doesn't shine?

if it smells like BS thats probably where it came from

 

[Brainster]

I don't quite agree with that assessment. Some of the insurers were held liable for payouts on two attacks, according the clauses in their policies. That's why the total awarded to Silverstein Properties was $4.6 billion on policies valued at $3.5 billion. Not all of the money has been paid out yet.

AFAIK, the $861 million policy on WTC 7 was paid promptly. There was a clause in that policy that required Silverstein to begin rebuilding an office building of equal or greater floor space within two years. The City of New York kicked in with support for another $400 million in Liberty Bonds, without which Silverstein would have had to pursue financing for WTC 7 and would not have started building without an anchor tenant.

People sometimes mention Silversteins continuing lease payments and loss of rental income, but these expenses are mostly covered by the various insurance policies.

I suspect you'll find that the rebuilding clause was not in his insurance policy but in his mortgage (or his agreement with Con Ed, who I assume owned the electrical substation). The insurance company has no real interest in whether the property gets rebuilt, while the mortgage holder does.

I'd be interested to hear what the length of time on Silverstein's rent insurance was; I doubt very strongly it was covered for five years, and of course it's going to be quite some time before he collects any income off the Port Authority leasehold property.

 

[T.A.M.]

I thought all of one and part fo the other WTC were fireproofed with asbestos. Am I incorrect. Was it only part of one building, and none in the other?

TAM

 

[Gravy]

I suspect you'll find that the rebuilding clause was not in his insurance policy but in his mortgage (or his agreement with Con Ed, who I assume owned the electrical substation). The insurance company has no real interest in whether the property gets rebuilt, while the mortgage holder does.

I also find that odd. I got the information from a New York Times article:

January 16, 2003
Even as Construction Begins, a New Trade Center Tower Faces Obstacles
By CHARLES V. BAGLI

...Another possible sticking point is a clause in Mr. Silverstein's insurance policy that requires him to rebuild within two years. He says he has fulfilled that term by signing contracts for at least some of the work on a new tower, although the insurance company may take a different view, according to a person working on the project for Mr. Silverstein. Mr. Silverstein does not expect to complete the tower until late 2005 or early 2006.

I'd be interested to hear what the length of time on Silverstein's rent insurance was; I doubt very strongly it was covered for five years, and of course it's going to be quite some time before he collects any income off the Port Authority leasehold property.

I don't have details on that. I'll see if I can get an answer from Silverstein's office later today.