Silverstein Properties and Brookfield Asset Management will lead the development of 900-foot-tall residential tower.
Preliminary plans for the first residential tower at the World Trade Center gained approval on Thursday, marking a new direction for the lower Manhattan site that in the past two decades has grown into an office district and a memorial to those who died in the Sept. 11, 2001, terrorist attacks.
Silverstein Properties and Brookfield Asset Management will lead the development of the 900-foot-tall residential tower that will replace the former Deutsche Bank building. The developers propose a 1.6 million-square-foot tower containing 1,325 apartments at an estimated construction cost of $1.2 billion.
The boards of the Port Authority of New York and New Jersey and the Lower Manhattan Development Corporation, which jointly own the development site, approved the start of negotiations with developers in separate meetings on Thursday. It isn’t clear how much money the Port Authority and LMDC would receive if the deal goes ahead.
The tower would include 330 units of affordable housing for qualifying families of three, or equivalent, with a household income of up to $51,000. Construction is expected to begin in 2023, with completion targeted for 2028.
Port Authority Vice Chairman Jeffrey Lynford, addressing the fact that the building will be the first and only residential development at the World Trade Center, said: ”It takes a community of not just office buildings to make a vibrant downtown.”
Developer Larry Silverstein, the 89-year-old chairman of Silverstein Properties, said in a statement: “This announcement is a giant vote of confidence for Lower Manhattan.”
Port Authority and LMDC officials hailed the announcement as a milestone toward completing the rebuild of the World Trade Center campus after the Twin Towers and several surrounding buildings were destroyed or badly damaged in the 9/11 attacks. The officials began their search for a developer for the last vacant plot of land at the site in 2019 and received five proposals suggesting commercial and residential options.
Building owners have struggled to fill commercial office space at the World Trade Center in the past decade. The Port Authority celebrated reaching 93% occupancy at One World Trade Center only last year. This year, its anchor tenant at the building, Condé Nast, started withholding rent as it tries to reduce its footprint and rent per square foot in the building.
The commercial office market has been hit hard by the Covid-19 pandemic. The future of office-space demand in Manhattan remains unclear as many employers consider allowing white-collar workers to telecommute at least a few days a week after the pandemic is over.
The new tower, known as Five World Trade Center, is the final piece in the development of the World Trade Center site in lower Manhattan. It will be built on a 33,000-square-foot plot at the southeastern edge of the campus on the corner of Greenwich and Albany streets.
Mr. Silverstein is no stranger to the campus. His firm built Three and Four World Center. The company hasn’t begun construction on Two World Trade Center after failing to find an anchor tenant for the building. Media companies 21st Century Fox and News Corp, which owns Dow Jones, publisher of The Wall Street Journal, dropped tentative plans to move to that tower in 2016.
The redevelopment program, which was approved years ago for the 16-acre World Trade Center campus, didn’t include residential development. Port Authority and LMDC officials said the plans for a residential tower require an environmental and public review process that is expected to take up to a year.