Row Threatens to Derail Ground Zero Project

The future of Manhattan’s Ground Zero was thrown into uncertainty yesterday after negotiations between New York authorities and the tycoon who owns the lease of the site were acrimoniously abandoned.

The governor of New York state, George Pataki, accused the developer Larry Silverstein of betraying the public’s trust over plans to rebuild the area destroyed in the terrorist attacks of September 11 2001. Another senior official told Mr. Silverstein he should start construction on the proposed Freedom Tower or "move out of the way".

"We cannot and will not allow profit margins and financial interests to be put ahead of public interest in expediting the rebuilding of the site of the greatest tragedy on American soil," Governor Pataki said in a statement after nearly 16 hours of talks were called off at midnight on Wednesday. "This rebuilding project is unlike any other in the history of New York City and our nation, and must be treated as such."

The architect Daniel Libeskind’s vision for Ground Zero includes a $2.3bn (£1.3bn) Freedom Tower, about 1,100 feet high - scaled back from 1,776 feet, a symbolic number representing the year of America’s independence. Construction on the tower had been scheduled to begin next month.

Under the terms of his lease Mr. Silverstein must build five towers with 930,000 square meters of office space and 28,000 square meters of retail space, but Governor Pataki and the Port Authority of New York and New Jersey, which owns the land, doubt he has the financial resources to complete the project. The two sides had been considering a plan under which the Port Authority would build the Freedom Tower and one other, but reportedly could not reach agreement on what financial compensation Mr. Silverstein would receive.

He had been accused of trying to retain the most profitable work for his firm while shifting most of the financial risk to state authorities. Charles Gargano, New York’s most senior development official, said at a press conference that starting work on the Freedom Tower next month "is a commitment he made to the public ... and if he does not, then we want him to move out of the way".

Complicating matters, Governor Pataki has made the reconstruction a "legacy issue", something he wants well under way by the time he leaves office at the end of this year - possibly to launch a bid for the Republican nomination for president, though his chances are considered slim.

Dara McQuillan, a spokesman for Mr. Silverstein, said he hoped negotiations would restart but that the firm would begin the Freedom Tower next month. It has rebuilt one building, 7 World Trade Centre, he said.

But, more than four years after the attacks, the absence of significant visible changes at Ground Zero are a source of embarrassment for the city and state. "Osama bin Laden must be laughing in his cave," one commentator wrote in the New York Post yesterday.

Work on the memorial component of the site began without ceremony last week. But that project has also become controversial, with a group of about 100 people bereaved on 9/11 trying to stop it going ahead because one section would be underground, allowing redevelopment on parts of the two towers’ footprints.