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NYT/May 4, 2006

Sept. 11 Memorial Estimate Soars to $1 Billion, Report Says

The projected cost to build the World Trade Center Memorial complex at ground zero has soared to nearly $1 billion, according to a report with the most authoritative estimate to date.

Rebuilding officials concede that the new price tag is breathtaking — “beyond reason” in the words of one board member of the World Trade Center Memorial Foundation — and it is sure to set off another bruising battle over development at the 16-acre site, with calls to cut costs, scale back the design or even start over.

A few years ago, the problems faced by the memorial, the spiritual centerpiece of the site, would have been unimaginable. The underground complex, with its pools, waterfalls and galleries, was the product of a worldwide design competition that drew 5,000 entries and inspired tremendous public passion.

It was supposed to be immune to the controversies that had engulfed the commercial rebuilding at the site, with its completion assured by an outpouring of good will and open checkbooks. But fund-raising has lagged, with just $130 million raised so far from private contributions and many notable donors failing to step forward so far.

The new estimate, $972 million, would make this the most expensive memorial ever built in the United States. Then again, everything at ground zero carries a big ticket, from the $478 million vehicle screening center to the $2.2 billion PATH terminal. The latest figure comes from a lengthy report by Bovis Lend Lease, the construction manager hired by the foundation to come up with a rigorous analysis of the projected costs based on forecasts of labor rates and market prices for steel and concrete, which have been rapidly rising in recent months.

The report includes expenses not previously enumerated, like $25 million in insurance, $22 million for museum exhibit design and construction, as well a $22 million increase in the cost of the entry pavilion to the underground museum.The foundation has started briefing officials at City Hall, in the office of Gov. George E. Pataki and at the Port Authority of New York and New Jersey, which owns the land. A person involved in meetings about the memorial provided The New York Times with a copy of a confidential foundation memorandum, dated May 2, that summarizes the Bovis findings.

Even before the billion-dollar estimate has been officially released, Mayor Michael R. Bloomberg said yesterday that he had spoken to both Gov. George E. Pataki of New York and Gov. Jon S. Corzine of New Jersey about the escalating costs.

“Both governors and I think that $500 million is the amount of money that they’re going to have to learn to figure out how to deal with,” Mr. Bloomberg said. “We want to build the memorial but we have to realize that there are conflicting demands in this city.”

John Cahill, Mr. Pataki’s chief of staff, who is overseeing rebuilding at the trade center, issued a statement yesterday saying , “We remain committed to the creation of a prominent, powerful and moving memorial that our nation can be proud of. Generations to come will come to see this tribute. However, we must ensure that it is financially achievable, while remaining consistent with the” original vision.

The report estimates the cost of just the memorial and its related museum at $672 million, up 36 percent from $492 million only four months ago. The latest projections include $71.5 million for an underground chiller plant, up from $41.5 million four months ago, and $25.2 million in previously unreported insurance costs, which could be regarded as an operating expense.

Bovis also identified another $300 million in site preparations — nearly triple the previous $110 million estimate by the foundation, the Lower Manhattan Development Corporation and the Port Authority — that would be necessary before construction could begin. It contends that the Port Authority must deliver a “buildable site” and should bear those costs.

The authority will almost certainly contest that assertion. Last month it agreed to provide the memorial with $100 million, based on the prior estimate, as part of a major realignment of the plans to build four major office towers on the site. At the same time, the authority took on financial responsibility for the troubled $2 billion Freedom Tower. Yesterday, some state officials and Port Authority executives expressed misgivings about the validity of the sudden jump in infrastructure costs, but did not want to say so publicly until they had been briefed.

The ensuing debate over costs and potential design changes may also raise once again the possibility that the Port Authority would take over construction of the memorial from the foundation. Last fall, both Governor Pataki and Mayor Bloomberg seemed to endorse the idea. State officials in the last week have expressed a lack of confidence in the foundation’s ability to build the memorial complex.

The matter is complicated by what some officials regard as the foundation’s anemic effort to raise donations, more than four years after Sept. 11. In addition to the $130 million the foundation says it has raised, the Lower Manhattan Development Corporation has put up $200 million, which together with $100 million from the authority, would bring the total amount raised to $430 million.

The foundation has yet to address how it will handle the annual expense of running the memorial and the museum, which could reach tens of millions of dollars. The earlier estimate of the costs, $494 million, came from the Lower Manhattan Development Corporation in January, and some foundation executives have said the corporation’s analysis was inadequate, although Stefan Pryor, its president, noted that the Bovis estimate contains some additional big-ticket items.

Early this year, the foundation solicited contractors to build the footings for the complex. Peter Lehrer, a construction consultant working for the foundation, and Roland Betts, a former director of the Lower Manhattan Development Corporation, became alarmed when the responding bids ranged from $29 million to $61 million, two to four times higher than expected.

The foundation then withdrew the contract and asked Bovis for a new cost analysis of the entire project. That analysis is summarized in the confidential memorandum, which also mentions design changes that better reflect the complexity of the project and “additions to the scope of the project.”

Knowing that the cost of the complex was getting out of hand, the foundation’s executive committee met on April 18 with representatives of some victims family groups, including Anthony Gardner, a leader of the Coalition of 9/11 Families, which has sued to block the memorial design; as well as Edie Lutnick, Patricia Riley and Sally Regenhard. In an attempt to cut costs and appease their critics, the executives suggested a broad series of changes to the design, according to three people who attended the meeting.

In the current design, the names of the victims would be inscribed 30 feet below the surface, on a low parapet in front of a gallery surrounding an underground pool within the footprint of twin towers. Officials said that eliminating the gallery and moving the inscription of the names to plaza level would save money, resolve some security issues and perhaps assuage opponents.

“We’ve always made it clear to the foundation and to L.M.D.C. that we do not support this memorial as it stand now,” Mr. Gardner said yesterday, although he refused to discuss the April 18 meeting.

But supporters of the current design objected to what they said would be a major revision, to appease some critics. “I don’t think it’s appropriate to go back and start from scratch,” said Jeff H. Galloway, a member of Community Board 1 in Lower Manhattan. “The memorial design wasn’t thrown together in some haphazard way. It’s the result of a thorough and amazingly inclusive process.”

Monica Iken, a champion of the original design by Michael Arad and a member of the foundation board, expressed her dismay at what she called a “leadership failure.”

“Fund-raising would not have been a problem if the memorial and memorial museum was a priority in the first place, which it has never been,” she said. “If the original design hadn’t been treated like a Tinker Toy, we may have not have had these problems.”
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