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4th October 2001

The World Trade Center is a gold mine. And Larry Silverstein knows it.

Silverstein already owned number Seven WTC, but he led a consortium that just months ago signed a new $3.2 billion US, 99-year lease on the WTC complex. That was the first time the WTC had changed hands in its thirty year history.

The Port Authority of New York and New Jersey signed the deal with the Silverstein-led Westfield America on the 26th April, 2001. Westfield America leased the concourse mall, and Silverstein the office portion.

The deal was finalized and celebrated on the 23rd July -just seven weeks before almost the entire complex was destroyed. Port Authority officers gave a giant set of keys to the complex to Silverstein and to Westfield CEO Lowy.

Silverstein was ecstatic at that time. "This is a dream come true," he had said. "We will be in control of a prized asset, and we will seek to develop its potential, raising it to new heights." An ironic choice of words, in retrospect.

The leased buildings included Numbers One and Two (the Twin Towers), Four, Five and 400,000 square feet of retail space. The Marriott Hotel (3WTC), U.S. Customs building (6WTC) and Silverstein's own 47-story office building were already under lease.

Despite the transfer to private hands, the tax payments would still come from the Port Authority -who had been making yearly $25 million payments in lieu of taxes to New York City. The proper figure should be more like $100 million according to city administrators.

Silverstein is undeterred by the demolition of the complex. He already has somewhat insensitive plans to rebuild. Four towers this time. Although the complex was not insured against an act of war, new policies insured against terrorist damage.

Which leaves everybody financially consoled, even if not emotionally so. The vendors still have the $3.2 billion they made on the sale. The purchasers lease deal had spanking new insurance --with new beneficiaries-- for capital value and loss of income.

Silverstein has insurance money to rebuild and get the $110 million of annual rental income flowing again. Or double that with his planned four towers. Nice money if you can get it. Can he?

Not if the insurers could help it. They are the big losers. And they detest having to pay a claim on a policy taken out only weeks before. Indeed, they often delay payment to investigate cases where immediate claims are made against brand new policies.

See also: Silverstein Makes a Huge Profit off of 9/11 Attacks

What Really Happened

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