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The Screwy Economics Behind 1 WTC

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An emotionally induced misuse of money", “You can only understand this as a political statement" and “It makes no sense as a commercial real estate endeavor" are just a few quotes from opponents of the construction at 1 World Trade Center. The New York Times did a piece criticizing the economics of the building and the numbers speak for themselves with the building costing a whopping $3.3 billion (the cost for the Bank of America was about $2 Billion). To balance the cost out the rent will have to be higher than rents in Midtown, which are typically more expensive than downtown. To make the building economically feasible they will have to charge $130 per sq/ft compared to the norm of $55-60 for downtown.

So who will paying? The taxpayers! 1 WTC is owned by the Port Authority of New York and New Jersey and users of "the people who pay the toll to cross the George Washington Bridge, or use the Lincoln Tunnel, or ride the PATH rail system" will be picking up the tab.

It's not all economic inefficiency. If you'll remember, the Port Authority sold about 5% of the building to the Durst Corporation for an estimated $100 Million. This is a nice moment of warm fuzzies and making up, since the head of the corporation Douglas Durst was one of the first vocal critics of the 1 World Trade Center plan.

· In Skyscraper at Ground Zero, Sentiment Trumped Numbers [NY Times]
· 1 World Trade Center Coverage [Curbed]