Port Authority Confronts Silverstein

The New York Post reports that the Port Authority has asked WTC developer Larry Silverstein to explain how he expects to pay his share of rebuilding costs. Now that Silverstein has lost a lawsuit against most of his insurers, the most he could receive is $4.6 billion, and it could be as little as $3.5 billion depending on how the remaining court battles play out (and he has lost all of them so far). That's a far cry from the $7.0 billion Silverstein would have received, had he persuaded a jury that the 9/11 attacks counted as two separate occurrences.

Now, $4.6 billion isn't exactly chump change, but Silverstein has already blown $1.48 billion of it on legal fees, mortgage payments, and his $120 million-a-year lease with the Port Authority. It's estimated he'd owe another $630 million on lease payments before the 1,776-foot Freedom Tower, on which he's breaking ground this summer, could start generating income.

Silverstein estimates it will cost $1.6 billion to build the Freedom Tower, but the Port Authority believes he also owes a contribution to the sub-grade infrastructure, which could run to another billion. Add it all up, and it's more money than Silverstein is known to have. Banks are unlikely to lend Silverstein any more money when the Freedom Tower as yet has no principal tenant.

The bet here is that the Port Authority will have to find a way to buy Silverstein out of his lease.

August (the restuarant)

Note: August closed in June 2014 after facing a 200% rent increase. My review below dates from a decade earlier, under Executive Chef Tony Liu, who left the restaurant in 2007 to take over Keith McNally’s Morandi, and later Pulino’s. Terrence Gallivan replaced Liu, before moving to the ill-fated Alto in 2011. Jordan Frosolone, the former chef de cuisine at Hearth, replaced Gallivan. In November 2011, Josh Eden (formerly of Shorty’s.32) replaced Frosolone. The restaurant has re-opened on the Upper East Side at 791 Lexington Avenue at 61st Street.

*

I had a very happy experience the other night at August. Eric Asimov was absolutely right about the heavenly smell.

Arriving at 6:30pm for a pre-theater dinner, I had my choice of tables. When I left an hour later, they had started to fill up but still had two tables free. By 8:30pm, you would definitely have a wait. An outdoor garden is to open within the next couple of weeks. It will have a retractable roof, allowing it to be used year-round. This will double the capacity of the restaurant.

I ordered a Ramp Vichysoisse soup to start, which misfired. It is supposed to be served cold. If this were a blind taste test, you’d have trouble deciding whether it was a hot soup that had been left at room temperature too long, or a cold soup that had been allowed to warm up.

Things improved markedly with Softshell Crabs Grenobloise, served over a bed of haricots verts. The crabs, served whole, were done to perfect crispness, and an explosion of flavor greeted the tongue as I bit inside. Incidentally, the dish appears on the menu as “Skate Grenobloise,” but for now softshell crabs have replaced the skate. (This was fully disclosed before I ordered.)

I finished with the daily selection of artisinal cheeses, a selection of three very flavorful and contrasting chesses that the manager informed me he had selected and purchased himself. He recommended a glass of Castilla y Lyon Rioja that perfectly complemented the cheeses without overwhelming them.

Service was friendly and prompt, although I thought it took a tad too long for the cheese course to arrive. However, I had left plenty of time to finish dinner, and the Rioja kept me amused. One minor complaint is that the dessert menu had no prices. Silly me, I assumed the desserts would be priced in proportion to the rest of the menu, and didn’t bother to ask. Turns out the cheese course was $15, which was only $2 less than my entrée. Although I’ve no regrets about the evening, I really had no clue that I was selecting a $15 dessert.

August doesn’t take reservations, but apparently there are exceptions if you get to know them. While I was there, a lady came in and booked a table for 8pm on Sunday for her mother’s 91st birthday. “We don’t take reservations, but call me at 6pm Sunday to remind me, and I’ll set aside a table for you.” It was obvious from the conversation that the lady had been in before. I overheard a couple of other conversations along similar lines.

It really is time to rename the Eric Asimov’s New York Times column, “$25 and Under.” The arrival of a new critic starting June 1st may provide the occasion to do so. My 3-course meal, with two glasses of wine, ran to $73 including tax and tip. By no rational definition can this be considered a “$25-and-under” restaurant, unless you eat a one-course meal and drink sodas, which is probably not what most people have in mind. Nor is August the first restaurant the Asimov column has covered that stretched the $25 ceiling way beyond plausibility. The name hasn’t changed for about 20 years. Thanks to inflation, restaurants that realistically fall within that range, and yet are still worth reviewing, are a vanishing breed. Perhaps “Informal Dining,” although less catchy, would be a more sensible title.

August (359 Bleecker Street, between W. Tenth & Charles Streets, West Village)

Food: ★½
Service: ★
Ambiance: ★½
Overall: ★½

Fulton Street Transit Center

The MTA has posted the Draft Environmental Impact Statement (DEIS) for the Fulton Street Transit Center (FSTC). This is one of the major transit projects receiving Federal funding as part of the post-9/11 aid package.

The FSTC is a massive reconstruction of the Fulton-Broadway-Nassau station complex, the 9th busiest in the subway system, where the Broadway (2,3), Lexington (4,5), Eighth Avenue (A,C) and Nassau St (J,M,Z) Lines meet. It was originally four separate stations, constructed early in the 20th century by three competing companies that had no interest in working together. Free transfers between the lines were added when the city took over the entire subway system at mid-century, but the design of the complex was never rationalized. It is a bewildering array of ramps and staircases, with dozens of entrances, many of which are poorly located and far too narrow to accommodate peak passenger loads.

As part of this project:

The 2/3 and 4/5 stations, which are basically unchanged since they were built in the early 1900s, will be rehabilitated.

The A/C mezzanine will be totally rebuilt, eliminating a confusing series of ramps, and improving connections to the 2/3 and 4/5.

The whole station complex will become ADA compliant.

There will be a new "grand point of entry" on the east side of Broadway, between Fulton and John Streets. Five buildings on that block will be demolished, with only the historic Corbin Building (on the corner of John and Broadway) surviving.

There will be new entrances Broadway and Maiden Lane. The entrances on the west side of Broadway will be totally rebuilt, including a new headhouse at the corner of Dey and Broadway (with the low-rise building on the south corner of that intersection demolished). Most other entrances will be widened and made more accessible.

There will be a new underground passageway along Dey Street, connecting the complex to the World Trade Center.

There will be a new free transfer between the N/R and the E at the World Trade Center.

The MTA considered ten alternatives, of which two will receive further analysis in the Final Environmental Impact Statement (FEIS) later this year. The two surviving alternatives differ mainly in how they deal with the Corbin Building at the corner of John and Broadway. In one alternative, the Corbin Building is untouched; in the other, the Corbin building is acquired as part of the project, and integrated into the new entrance building along Broadway. The description in the DEIS strongly suggests that the MTA prefers this latter option.

Construction is set to start in late 2004, with completion in 2007.

Clueless Chowhounds

There are two online food boards that I follow regularly: eGullet and Chowhound. Both have discussion forums organized by geography. You’ll find eGullet’s New York board here, and you’ll find Chowhound’s Manhattan board here. (Chowhound management tosses a hissy fit if you mention Peter Luger on their Manhattan board, even though Luger is economically part of the Manhattan market. They insist it belongs on an “outer borough” board.)

eGullet is superior to Chowhound in almost every respect. It has a more intuitive user interface, it is easier to find things, and the average post is considerably more sophisticated. This is not to deny that you sometimes find useful comments on Chowhound - otherwise I wouldn’t bother to read it - but they’re fewer and far between.

I am particularly amused by clueless Chowhound posts like this one yesterday:

Looking for recommendations for good eats (dinner) in the West 50’s. Scene/buzz/beautiful people _not_ of interest; just wonderful eats.

All cuisines are in the ballpark except for Mexican and Indian (thanks to spice allergy).

Now, there are hundreds of restaurants in the West 50s. Menupages lists 274 of them, and of course not all restaurants are on Menupages. So to ask for “good eats” in the West 50s, with the only requirement that it not be Mexican or Indian, is an idiotic question. I mean, I’m pretty tolerant of those who are intellectually challenged, but this is just not a thoughtful question. And there are a few howlers like this on Chowhound’s Manhattan board almost every day.

And am I the only one who finds the ridiculous word “eats” totally unnecessary? I’m alright with “foodie” (another recurring word on these boards), as there is no other word of comparable length that conveys the same meaning. It is, in other words, a useful addition to the language. But “eats” merely means “food,” as far as I can tell, and both are four letters.

Lower Manhattan Projects Advance

It has been a busy week for the Lower Manhattan rebuilding program. In a speech today before the Association before a Better New York, Governor Pataki gave his semi-annual report on progress downtown. As usual, he took the occasion to make a bit of news:

• Freedom Tower. Construction of the 1,776-foot skyscraper will begin on July 4, 2004, about two months earlier than previously announced.
• The Memorial. Schematic drawings will be completed by the end of 2004 and detailed drawings by the end of 2005, with construction to begin by 2006. Some $350 million will need to be raised to pay for it. Major League Baseball got the ball rolling with a $1 million contribution.
• Fulton Street Transit Center. Design of the new transit hub that will link 12 subway lines at the corner of Fulton & Broadway will be unveiled on May 26, 2004.
• Deutsche Bank Building. Demolition of the crippled shell that was once Deutsche Bank's (and, before that, Bankers Trust's) downtown headquarters will begin in the fall and be completed in 2005.
• West Street Promenade. The project intended to turn West Street into New York's version of the Champs-Elysee will begin in September, and the first section - from Washington Street to West Thames Street - will be complete by the end of 2005.
• South Ferry Terminal. A new subway terminal at South Ferry has completed initial design and should open by 2007. The project will replace an antiquated subway station dating from 1905, and will also provide a new free transfer to the Whitehall Street Station on the Broadway Line.
• Battery Park Ferry Terminal. Construction on a new Battery Park City Ferry Terminal has begun, with completion scheduled for 2006.

Pataki also elaborated on plans leaked to the press earlier in the week for a JFK-LIRR-Lower Manhattan Rail Link. The Governor favors a new East River tunnel, which (along with infrastructure on either side of the river) would cost at least $6.0 billon. No one yet knows where such a vast sum would come from, but Pataki pledged to begin the environmental review process this summer, and to find the money somehow before that process is completed. The study will also consider using the existing Montague Street Tunnel, which serves M and R trains today, but has some spare capacity. The Montague option, although less expensive, would severely constrict the subway system's capacity to grow or adapt to service outages.

The Governor believes the new tunnel could be operational by 2013. He says it would carry 100,000 passengers a day and would result in an increased economic output of $6 to 8 billion annually in Lower Manhattan and Brooklyn, and as much as $9 to 12 billion in the region as a whole. You can expect that there will be plenty of skeptics wondering where those figures come from.

Famous Oyster Bar

Note: In January 2014, Famous Oyster Bar closed after 55 years in business, after it lost its lease.

*

Last night, a friend visiting from out of town invited me to join him for dinner in midtown. Restaurant plans were loose, and I cringed when he suggested the Famous Oyster Bar. The neon “Seafood” sign suggested it catered to tourists who are looking for something a bit better than Red Lobster. I’m sure the clientele is nearly all walk-ins staying at hotels like the Sheraton and the Milford Plaza.

The restaurant has been there since 1959, and it probably hasn’t had a renovation since then. Not even Zagat has noticed it. The décor is a trite assemblage of maritime detritus (a life preserver, an oar, etc.). The laminated menus are worn and and frayed, with a predictable offering of steaks, seafood, pasta fra diavolo, frutta di mare, clam chowder, and so forth. When you’ve finished your diet coke, the server brings an iced tea refill (that is, when she manages to notice you need one).

There are specials written on a board, and it is here that the Famous Oyster Bar comes alive. A whole trout stuffed with crabmeat was a pleasant surprise, crisp on the outside, and succulently moist inside. This was an entrée that actually required some thought, and they managed to get it right. My friend ordered soft-shell crabs and was also pleased.

We both had clam chowder to start; although unremarkable, it was a bargain at $3.95 for a cup. The seafood entrées were generally in the $19-23 range. The bill for two came to $82 (with only one of us drinking alcohol).

I’m willing to try anything once, and the Famous Oyster Bar managed to exceed expectations. It helps to have expected nothing.

Famous Oyster Bar (842 Seventh Ave at 54th Street, West Midtown)

Food: *
Service: Satisfactory
Ambiance: Fair
Overall: *

Silverstein's Loss is Lower Manhattan's Gain

Yesterday, developer Larry A. Silverstein lost yet another battle to collect a double insurance payment for the loss of the World Trade Center towers. Silverstein, who signed a lease for the property six fateful weeks before 9/11, argued that each airplane attack was a "separate occurrence," entitling him to a double recovery. Had that argument prevailed, Silvertstein would have been entitled to a whopping $7.0 billion payout, which he would have used to erect a glut of office space in Lower Manhattan.

The property was covered by a consortium of insurers, and the dispute has turned on which of two coverage forms, or "binders," was in effect on 9/11. It's a complex skein to unravel, because Silverstein negotiated with many insurers simultateously, and each one might have had a different understanding of what they were agreeing to cover. But one after another, courts and juries have held that Silverstein's insurance treated 9/11 as a single event.

There are still a few insurers for which the issue has yet to be decided, but even if Silverstein wins every remaining battle--which is highly unlikely given his track record thus far--the most he could collect is $4.68 billion. However, he has aleady collected $1.9 billion, of which $1.6 billion has gone to legal fees and rent payments.

The bottom line is that there will be far less insurance money to rebuild the World Trade Center than Silverstein and the Port Authority had expected. While that's undoubtedly bad news for Silverstein, it's good news for the city. As it is, Silverstein has two massive projects underway at the site: 7 World Trade Center (already under construction) and the 1,776-foot-tall Freedom Tower (to be started shortly). Neither has attracted a principal tenant. The last thing we need is for Silverstein to continue this glut of construction, as he had every intention of doing, despite the clear lack of appreciable demand.

Silverstein swears that he will continue to rebuld anyway, up to the 10 million square feet of commercial space he controlled previously. But no bank will lend Silverstein the money for more office towers until it's demonstrated he can fill them, and for the foreseeable future that seems highly unlikely.

Last year, the Port Authority bought out Westfield America, who had held the lease on the retail mall at the Trade Center. Westfield was balking at plans to build street-level retail, preferring to duplicate the subterranean mall that was on the site before 9/11. Getting rid of Westfield simplified matters for everybody. With Silverstein now losing money hand over fist in lease payments to the Port Authority, and with no chance of him rebuilding all of the lost space anytime soon, Silverstein becomes increasingly irrelevant.

I wouldn't be surprised to see him out of the picture, or with his influence severely curtailed, by year's end.