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Vornado wins WTC lease

February 22, 2001
Web posted at: 23 1 GMT

NEW YORK (Reuters) - Vornado Realty Trust Thursday won the bidding for a 99-year lease on New York City's famed World Trade Center with a $3.25 billion offer.

The Port Authority of New York and New Jersey chose Paramus, N.J.-based Vornado (VNO: Research, Estimates) from a group of bidders including Silverstein Properties and a joint bid by Brookfield Properties Corp. and Boston Properties Inc.

After a meeting of the Port Authority's board, it said it had entered into a 20-day exclusive negotiating period with Vornado.

graphicThe winning bid grants a 99-year lease on the two 110-floor, 1,368-foot twin towers, two other office buildings and a 90-store mall. The Port Authority will remain the landlord with title to the land the properties occupy.

The World Trade Center, which sits on 16 acres in lower Manhattan, has seven times the office space of another of New York's landmark buildings, the 102-story Empire State Building.

"It has been a long process but a good process, and we are now continuing with Gov. George Pataki's promise to privatize assets that are not related to the core mission of the Port Authority, such as the Vista Hotel, which was privatized, and now the World Trade Center," Charles Gargano, vice chairman of the board, told Reuters.

"We can move forward with a lot of funds now to work on more transportation for the region which is what we're all about," he added.

The Port Authority is scheduled to meet March 14 to approve a final contract. A Port Authority source said the manner of payment is one of the items that will be under negotiation.

The twin towers have become a major New York tourist attraction since they were opened in 1970, with a sightseeing platform on the roof and a popular restaurant bar called Windows on the World, where cocktail drinkers can watch the sun go down over the Statue of Liberty and New Jersey.

The World Trade Center has seen hang-gliders jump off the roof, "Spiderman" climbers rappel up the side and a tight-rope walker's high-wire stroll between the towers. It has also seen tragedy with suicides in the early years and a February 1993 terrorist bombing that killed six people.

Whether New York City will get tax revenue from the World Trade Center under Vornado as lease holder was not immediately known. Currently, the Port Authority gives the city a payment in lieu of taxes, which amounted to about $29 million last year. City officials have said they could get four times that in taxes from the tenants of the complex.

Shares of Vornado closed Thursday down 95 cents at $34.57.

Copyright 2000 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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