Tower Struggle It's not unusual for developers, politicians, and architects to clash over real estate projects in New York City. But there's never been anything like the battle over the World Trade Center site.
By Devin Leonard

(FORTUNE Magazine) – On Dec. 19, New York Governor George Pataki joined developer Larry Silverstein and architects David Childs and Daniel Libeskind at Federal Hall in lower Manhattan to unveil the long-awaited design of the Freedom Tower, the first skyscraper to rise at ground zero. They exchanged handshakes and forced grins. The collaboration between Childs and Libeskind had been stormy. The city's newspapers had portrayed them as divas who couldn't stand the thought of sharing the limelight. Obviously the four men wanted to put that behind them. "Today is a celebration of a successful collaboration of two brilliant architects," Pataki insisted.

It was a little early to celebrate. In truth, the struggle over the Freedom Tower is far from over. This is not a simple tale of two architects whose egos are larger than the building they are supposed to be designing. In the weeks before and after the Freedom Tower's unveiling, FORTUNE interviewed Pataki, Silverstein, Childs, Libeskind, and dozens of other people involved in the project. What emerged is a story about commerce colliding with politics over the most emotionally charged real estate project in New York City's history.

The primary combatants are Silverstein, the developer who is financing the skyscraper, and Pataki, who wields vast influence over the project because it will be constructed on government land. For Silverstein, the Freedom Tower must attract tenants to be a success--hordes of them. When it is completed, the skyscraper promises to be the world's tallest building, with 2.6 million square feet of office space. Silverstein wanted an architect with extensive experience to design it. He found one in Childs, a partner in the venerable firm Skidmore Owings & Merrill.

For Pataki, on the other hand, ground zero is a political symbol. He wants anything built on the site to honor the dead and inspire (i.e., not offend) the living, most notably the families of 9/11 victims. Indeed, it was largely to mollify those families that Pataki forced Childs to collaborate with Libeskind, who is most famous for designing the haunting Jewish Museum Berlin. He has never created an office tower before.

With such radically different visions for ground zero, it was inevitable that the governor and the developer would clash. What was less predictable was that they would do so using cat's-paws: their architects.

"The mission here," says Larry Silverstein, "was to create a great product that generations forward will look back at and say, 'Spectacular! Spectacular! Wonderful building!' Right? That's the mission. That's the goal."

The 72-year-old developer sits in the boardroom of his office on Fifth Avenue in Manhattan. His voice is husky, and he speaks with studied, dramatic pauses. He says he has no interest in gaining personal glory by erecting the world's tallest building. He says he wants to rebuild to send a message to the terrorists. "We have an obligation to our children, an obligation to our grandchildren, not to cower," he says.

It's a nice sentiment. But Silverstein is clearly savoring this moment. Until six weeks before Sept. 11, 2001, when he leased the World Trade Center for 99 years from the Port Authority of New York and New Jersey, Silverstein had a lucrative but rather undistinguished career. By the '90s he controlled millions of square feet of office space in the city. But Silverstein never got the attention enjoyed by some other members of Manhattan's skyscraper club. "He's after the limelight," says a competing developer. "He's never really had it, and he always wanted it."

That changed after the Twin Towers were destroyed. Silverstein was deluged with telephone calls and letters from people urging him to lead a rebuilding effort. With messianic zeal, he heeded the call. Instead of settling for a $3.5 billion payout from the World Trade Center's insurers, he demanded $7 billion, arguing that the destruction of the Twin Towers was two events. Silverstein's insurers objected; the case goes to trial in February. Even if he loses, Silverstein is entitled to $3.5 billion--plenty to build on the site.

But what exactly should rise there? For the answer, Silverstein turned to David Childs. The architect was already working for him. Just before 9/11, the developer had asked him to spruce up the World Trade Center. Childs wasn't thrilled. To him, it was a failed urban-renewal project from the 1960s. He felt that the Port Authority had surgically removed a section of the city when it built the complex and inserted something alien. "It was anti-urban--cold, harsh, hard to get to," the architect says.

Developers don't always suffer such critiques gladly. To them, a beautiful building is one that's fully rented. But Childs, 62 and 6-foot-3, commands respect. His list of projects is exhaustive--everything from the headquarters of Bear Stearns and Time Warner (FORTUNE's parent) in New York City to an airport terminal and railway stations in Singapore. Real estate moguls are reassured by his resume and his affable, WASP-y manner. But by all accounts, Childs can be ruthless. When Skidmore was on the brink of insolvency in the early '90s, he took control, laying off two-thirds of the firm's employees. As a reward, he was named Skidmore's first chairman. Childs gave up the position when he turned 60, and he is now a consulting design partner.

Much to his credit, Childs helped Silverstein reimagine the World Trade Center site after 9/11. He convinced Silverstein to restore the streets that once ran through the 16 acres. Childs also talked him into hiring five different firms to design the towers that the developer planned for the site. "Larry was a little nervous," says the architect. "But he bought into it. He really wants to do great things here."

Things were moving too quickly at ground zero for George Pataki. A shrewd politician with a preternatural ability to co-opt his enemies, the Republican governor was seeking a third term in November 2002. He wasn't about to entrust the rebuilding of ground zero entirely to Silverstein, a major contributor to Democratic candidates. "This is not a private development," Pataki, 58, says earnestly in a telephone interview. "Whatever the legalities may or may not be, this is a public trust."

Ground zero was also a political minefield. Some relatives of 9/11 victims felt that any commercial development there would be sacrilege. But the governor couldn't let the site sit empty. The Port Authority, which he controls with New Jersey Governor James McGreevey, was counting on $120 million in annual lease payments from Silverstein. It was understood in Albany that the only way the developer could make those payments was to rebuild ten million square feet of office space--the same amount as the original trade center--at ground zero. If not, the Port Authority might have to raise the tolls at its bridges and tunnels in the city. That was unthinkable in an election year.

Pataki created the Lower Manhattan Development Corporation, a government agency that would oversee the revitalization of downtown. Silverstein chafed under the LMDC's authority. He was going to be putting up the money to rebuild ground zero. Anyway, his lease was with the Port Authority, not with the LMDC. But state officials say that under the terms of his lease, he can build something other than a replica of the Twin Towers only if he gets the Port Authority's consent. What's more, the Port Authority has the right to cancel Silverstein's lease. If it does, however, there is no way he will be able to win enough money from his insurers to cover the cost of ground zero's redevelopment. Under his contract he is entitled to the full sum only if he rebuilds. Pataki and Silverstein, then, were locked in an uneasy partnership.

The LMDC slowed the pace of activity at ground zero to a crawl. Pataki was intent on involving every possible constituency in the process. In July 2002 the LMDC and the Port Authority released six plans for the site. The various office buildings were represented by ghostly rectangles. That is a common first step in a major real estate development. But, says Silverstein, "people looked at the plans, and their first reaction was, 'This is ugly! This is terrible! This is awful!' because they didn't really know what they were looking at."

Pataki sympathized with the public. He says the schemes failed to capture the "emotion" of 9/11. With his blessing, the LMDC and the Port Authority solicited "innovative designs" for the site in August 2002. Submissions poured in from famous architects around the world. The LMDC made it clear that this was not a competition, that it was only looking for more imaginative ideas for the site plan. But the architects treated it like a competition anyway. They drew up plans with dazzling buildings, hoping Silverstein would hire them to design his actual skyscrapers. The process morphed into an architectural beauty contest. The winner was Daniel Libeskind.

Libeskind watched the debate over what should be built at ground zero from Berlin. He was mesmerized. "New Yorkers were divided," he says. "Half of the people said, 'Don't build anything.' And the other half said, 'Build significantly. This is New York.' And I thought, How do you combine these seemingly opposite points of view?"

Sitting in his office just blocks away from ground zero, where he relocated his architecture firm last year, Libeskind is every bit the artiste in his black suit and goggle-like glasses. He says he feels a personal kinship with the site. Born in Poland in 1946, he first saw the lower Manhattan skyline from the boat that transported him to America as a teenager. He studied architecture at Manhattan's Cooper Union. "We used to come down here at lunch when the trade center was being built," says Libeskind. "It was the most incredible building in New York."

Libeskind taught architecture for 16 years without designing a single completed building. Then, in 1989, he won a competition to design the Jewish Museum in Berlin. A decade later the museum--a thunderbolt-shaped building--opened to widespread acclaim. Says Mitchell Moss, director of New York University's Taub Urban Research Center: "Libeskind is a poet of death."

Fresh from his success, Libeskind submitted a site plan for ground zero. More than any of his competitors, he understood the need to make a bald emotional statement. The centerpiece of his plan would be a setting for the memorial. (Libeskind didn't design the memorial; earlier this month the LMDC selected architects Michael Arad and Peter Walker to do that.) It would be below ground, in the foundation of the World Trade Center. Rising above there would be five office buildings with angular tops like shards of glass. They would twine upward, culminating in a skyscraper with a spire that climbed 1,776 feet. The spire would hail the Statue of Liberty.

When Libeskind unveiled his plan in December 2002, relatives of the victims' families wept. Pataki, too, was smitten. "He took a lot of his cues from the families," says someone involved with the LMDC. The agency's site plan committee voted 7-1 to select a competing architect's plan. But the governor wanted Libeskind. "The governor simply overrode those recommendations based on his personal preference for the Libeskind plan," says Silverstein.

So much for consensus. Pataki christened the 1,776-foot building the Freedom Tower. He asked Silverstein to be ready to break ground by Sept. 11, 2004. Many believe the governor wants to lay the cornerstone at the Republican Convention next summer in New York to boost a possible presidential bid in 2008. Pataki strongly denies it.

Nobody questioned Silverstein's right to pick his own architect. All Libeskind had been hired to do by the LMDC and the Port Authority was handle the site plan. Says Joseph Seymour, executive director of the Port Authority: "He wasn't hired to do the designs of the actual buildings."

But Libeskind had other ideas. When Childs and Silverstein met with him to explain how they were going to proceed, Libeskind told them: "I'm going to design the Freedom Tower."

"I'm sorry, but I've hired David Childs to do that," said Silverstein. "Danny, you've never designed a tall building. If I'm going to have heart surgery, I don't want a surgeon who's never done heart surgery before."

Some relatives of 9/11 victims didn't like the idea that Libeskind might be cast aside. Neither did Pataki. After an eight-hour negotiation monitored by the governor's aides, Childs agreed to take Libeskind on as a "collaborating architect."

Childs wasn't about to let Libeskind dominate the project, though. He had already started to conjure a roughly 2,000-foot torqued tower. He felt it would pay homage to the Statue of Liberty in a more powerful way than Libeskind's building. After all, as Lady Liberty raised her torch in New York Harbor, she turned with a graceful twist. The tower's twist would do something intriguing: It would catch the winds and lift them skyward. That inspired Childs to design a windmill farm atop the tower, which could generate 20% of the skyscraper's power.

Libeskind was miffed. As the design took shape, he complained that it wasn't consistent with his "vision." In particular, it didn't have his spire. Libeskind didn't have veto power, so he tried to buy time. According to the Childs team, he told Childs he liked the torque. Then he changed his mind. That happened at least four times. (Nina Libeskind, the architect's wife and business partner, disputes this.)

Finally, in October, there was a blowup. Childs says Libeskind walked off the project; Libeskind denies it but says they "reached a stalemate." The news hit the papers immediately. Pataki met with Silverstein and told him to get the architects to be team players. Oh, and he wanted a final model by Dec. 15.

The collaboration continued. Yet Libeskind refused to sign off on a design. In one meeting, he grabbed a model of Childs's Freedom Tower and twisted it in another direction. "Why can't we turn it like this?" he asked.

The room exploded. Turning the Freedom Tower would throw Libeskind's entire master plan out of kilter, the Skidmore architects shouted. The tower, after all, had been designed to rise out of the very street grid that Libeskind himself had come up with. Even the normally unflappable Childs was shaken. "This meeting is over," he said. "I feel like I just skidded on a patch of ice."

In November, Silverstein's contractor, Tishman Construction, raised grave concerns about the asymmetrical spire that Libeskind was proposing. Tishman said the spire would be difficult and time-consuming to build. What's more, someone familiar with the project says the spire might create safety problems for construction workers, because it would act like a sail in heavy winds. Nina Libeskind says her firm's engineers gave the spire a clean bill of health.

By now, tensions were running higher than ever. In early December, in what the Silverstein team has called a "Watergate break-in," members of the Libeskind team who were working at Skidmore's Wall Street office made off with schematics of Childs's Freedom Tower to share with Pataki's chief of staff, John Cahill. Libeskind's attorney, Ed Hayes, says the Libeskind team had every right to take them.

There is little disagreement about what happened next. Hayes accompanied Libeskind to a design meeting. The Silverstein team was stunned. "You're deviating from the master plan," Hayes told them. "You have no authority to do that."

"This is a design meeting," said Janno Lieber, Silverstein's manager for the project. "I'm not meeting with lawyers."

"We've got instructions," said Hayes. "If you don't believe me, let's call Cahill now."

Lieber said, "Fine, but I'm still not meeting with you."

Said Hayes: "You can't fucking do this." He got on the phone, but he couldn't find anybody who would order the meeting to take place with Libeskind's attorney present. The Silverstein team was delighted. It looked as though Libeskind had used up all his political capital.

But after championing Libeskind, Pataki would have looked foolish endorsing a building that was solely the work of the developer's architect. So he stuck it to Silverstein one last time. In mid-December, Pataki insisted that Childs compromise. The cobbled-together result, a tower with a spire that rises to 1,776 feet, is "inspirational," says Pataki.

The tower still has to go through a gauntlet of tests to make sure it works as an office building. Inevitably, further changes will result. Childs is already lobbying to restore the height of his design. He says that needs to happen so that the windmill farm can operate at peak efficiency. Watch for the spire to disappear too.

You can count on Libeskind's protesting loudly if those things happen. He talks as if dark forces (read: Silverstein and Childs) may still try to turn ground zero into a Houston office park. That, he says, will never happen as long as he's around. "Long after the developer is gone, the architects are gone, the politicians are even gone, I'll still be here to make sure," Libeskind says. "That's my role. That's what my responsibility is. Somebody has to make sure that this site is treated with the proper respect."

But the malignant powers that Libeskind warns against don't exist. Silverstein clearly understands that this is the crowning moment of his career. Childs isn't going to let him blow it either. Silverstein has made good on his vow to recruit other architects: He has named three prominent ones--Norman Foster, Fumihiko Maki, and Jean Nouvel--to design three of the remaining four office buildings at ground zero. He has bonded with Santiago Calatrava, the renowned Spanish architect, hired by the Port Authority to design a new transportation center on the site.

Great things are happening at ground zero. So why is Libeskind still fighting? Well, partly because Pataki is letting him. But if he and everyone else just relaxed a little, the site might actually get the tower it deserves.