Gotham Gazette

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Rebuilding NYC

Money for Rebuilding

From the beginning, 9/11 has been a story about money. Terrorists attacked the Twin Towers because they symbolized finance and power. People from around the world responded to the attack by donating money to charities. The city lost huge amounts of income and revenue and is still struggling as a result. And, as authorities draw closer to deciding on a final design for Ground Zero, some wonder where the money will come from to build whichever plan is chosen. Money remains a much more central question than television and newspaper reports may suggest.

Funding the grand plan for the World Trade Center site is just one of many money troubles left over from 9/11. Politicians fight over the rebuilding funds. Relatives of victims say that the federal funds for compensating the families are being distributed unfairly. And lower Manhattan businesses and residents complain that they are not getting the financial help they need.

After September 11, the federal government set aside $5 billion for victim´s families and agreed to spend over $21 billion to help New York recover. But the attacks´ ultimate costs to the city, in areas like jobs and tourism, will be some five times greater than that – as high as $95 billion, according to city Comptroller William C. Thompson, leaving people with competing plans and needs scrambling for the funds.

How are the city and state going to untangle the confusing mess of 9/11 funds and make sure there is money to pay the most important bills and to build a worthy project where the World Trade Center once stood?

Grand Plans and Empty Coffers

If not exactly a consensus, there is clear movement toward the selection of a design for the World Trade Center site. Rebuilding officials gathered in closed-door meetings last week to discuss the designs for Ground Zero, and announced on February 4 that they had decided on two finalists, Studio Daniel Libeskind and the THINK team.

Libeskind's design exposes the Twin Towers´ original foundations and leaves the hole at Ground Zero for a memorial. The plan has been trumpeted on the New York Times editorial page and in the New York Observer, while the civic group R.Dot, endorsed the Berlin-based Libeskind as the "best man to help rebuild New York's spirit and skyline."

The World Cultural Center plan by the THINK team, with its open steel latticework towers, has also gotten its share of praise. Times critic Herbert Muschamp has said the design is his favorite and called it a "a work of genius, a towering affirmation of humanism in modern times." THINK architect Rafael Viñoly has said that this plan requires a great investment -- as much as $1 billion -- in public spaces, because the towers would not be filled with offices, but with a museum, an amphitheater and other cultural spaces.

But some wonder whether there will be enough money to build either of these plans, and if they make economic sense. World Trade Center lease holder Larry Silverstein could bring billions in insurance money to the rebuilding effort, from $2.4 billion to $3.55 billion to $7.1 billion, depending on how federal judges interpret his insurance agreements, particularly whether they agree with Silverstein that the attack was two separate events. But Silverstein has said that the designs do not fit his requirements, and that he wants to have more of a say in the design for a master plan.

Some have suggested that the Port Authority or the city buy out Silverstein´s lease, but as the New York Times wrote the day after the new plans were released, no developer would necessarily be obligated to build any of the designs. "The demand for office space, which is remarkably weak today, and the nature of the corporations, businesses and institutions that will move into any buildings on the site will have just as great an influence on what the buildings will look like and when they are built" as the architects´ ideas, wrote Charles Bagli.

Bob Yaro, president of the Regional Plan Association, has said that it will take a decade to fill the 17 million square feet of vacant or available office space that already exists downtown. Yaro advocates spending the next ten years building and improving transportation and public spaces in Lower Manhattan, instead of constructing more office towers.

Funding has been secured for one part of the rebuilding puzzle: $4.55 billion in aid from the Federal Emergency Management Agency and the federal Department of Transportation has been aside to remake lower Manhattan´s transportation system. Washington has agreed to spend some of that money on rebuilding the World Trade Center PATH station. The federal government will also fund a total renovation of the Broadway Nassau subway station near Ground Zero, as well as the new underground concourse that each of the architecture teams included in their designs. Whether the aid will be extended to Mayor Michael Bloomberg´s idea for a direct rail link between downtown and Kennedy Airport is still unresolved.

But Washington won´t release any of the money for transportation projects until there is a transportation plan, one of reasons that officials have been pushing for a quick decision on a master plan for the World Trade Center site. Some also say that businesses will be more likely to invest downtown after they have a better idea the site´s future. "Once everyone is committed to a plan, it´s going to spur even more economic activity than construction itself," Deputy Mayor Daniel Doctoroff told Newsday.

Political Wrangles

"When there is a big pot of money, everybody gets creative," Bloomberg has said about the federal rebuilding funds. And, although the money will not cover all of New York´s losses, there is undoubtedly a lot of it.

New York City´s federal aid package is being distributed by several different agencies. In a September 2002 report, the White House´s Office of Management and Budget described(pdf) how $20.8 billion of the aid will be distributed: The Federal Emergency Management Agency is in charge of giving out $8.8 billion, much of which has already been spent or allocated for projects like the cleanup at Ground Zero, Project Liberty crisis counseling and rebuilding lower Manhattan transportation. The federal Department of Transportation has $2.3 billion to distribute. The Empire State Development Corporation and the Lower Manhattan Development Corporation are spending $3.7 billion on small business loans and development grants. Another $1 billion will come from other federal agencies for things like job training and reimbursement for hospitals. The package also includes at least $5 billion in tax-free bonds to encourage developers and investors to build in New York City, aid that has gone largely untouched in the city´s current economic climate.

Such money would be coveted in any time, but particularly when the state and city face serious fiscal difficulties. So, for example, Mayor Michael Bloomberg – saying that he needs a new emergency bunker and help paying extra police and fire department costs – has asked the Federal Emergency Management Agency to give him about $690 million that was already promised to other projects.

The federal agency has set aside $800 million for the Port Authority, but Bloomberg suggested that the Port Authority receive just half of that. The mayor also thinks that nearly a third can be shaved from the Federal Emergency Management Agency´s budget to rebuild Fiterman Hall, a Borough of Manhattan Community College building near Ground Zero, and that the Project Liberty counseling project can spare $55 million, since it has had a lower use than expected.

Bloomberg included $1.3 billion in federal funds in the budget for his $10.6 billion vision for lower Manhattan, but he will need to vie with other agencies and even other states to secure the federal money. The mayor had counted on $100 million from the Department of Transportation to be used exclusively for New York City ferry projects. Instead, the department recently pledged $43.4 million of that for New Jersey´s ferry plans.

Meanwhile, in his budget released last week, Governor George Pataki pulled what the Daily News called a "budgetary sleight of hand," and included federal 9/11 disaster funds as part of the total the state is giving to New York City. Critics chided Pataki for taking credit for money that the federal government had already promised the city.

As politicians squabble, funding for a health program for rescue workers is uncertain. President George W. Bush initially included $90 million for the program in his major aid package for the city, but then Democrats shifted the program into a different spending plan. Bush rejected that spending plan outright last August, and the health program didn´t get the funding. Since then, Senator Hillary Clinton and other New York representatives have been lobbying the president and the Federal Emergency Management Agency to support the health program.

9/11 Scams
In order to reap some of the charity and federal disaster relief money after September 11 2001, people invented brothers, husbands, wives -- one man even posed as his brother in order to report himself killed. A San Diego man collected more than $136,000 from disaster relief agencies after falsely claiming that his wife had died in the attacks. By the time he was indicted, he had gambled away all of the money.

Cassaundrea Montgomery, from Missouri, described her made-up brother Joseph – including his preferred cigarette, Marlboro Light 100s -- in applications for aid from the Red Cross, the September 11th fund, Safe Horizon and the Robin Hood Relief Fund. She said he had gone to the World Trade Center for a job interview on 9/11. Now awaiting a federal court trial, she managed to collect $63,817 before she was caught.

The Manhattan District Attorney’s office has prosecuted nearly 500 cases of 9/11 fraud, and expects to see several hundred more.

A worker at the city morgue took coffins that charities had donated to 9/11 victims, sold them to funeral homes and pocketed the money. An elderly millionaire who had already begun renovations on her lower Manhattan apartment tried to get federal rebuilding funds and charity money to cover $500,000 in home improvements.

Companies even took advantage of a Federal Emergency Management Agency program that reimbursed people for air filters or vacuums to clean 9/11 dust from their apartments. The companies advertised products as "FEMA approved" and raised prices so that they could keep an extra chunk of the federal rebate as profit.

Unfair Compensation?

On January 25, the families of seven 9/11 victims who worked at Cantor Fitzgerald in the trade center sued Kenneth Feinberg, the administrator of the federal fund to compensate victims´ families. They are upset about the way Feinberg has treated family members and say that he is unfairly and illegally calculating families´ awards.

Families who agree not to sue the airlines involved n the September 11 attacks are eligible for federal compensation based on a formula The formula tabulates the amounts of the award using a victim´s age, income and number of dependents. But the lawsuit says that Feinberg is not giving enough to families of victims who were not married and puts a cap on the amount--around $6 million—that any family can receive even if, under the formula, the award should much higher.

Feinberg, who has the unenviable task of assigning a dollar amount to people´s suffering, has made few friends. He earlier aroused fury when a New Yorker profile reported that he said "Staten Island, that´s a Third World country," during a drive to the island for a meeting with victims´ families. Feinberg´s remarks prompted Staten Island Representative Vito Fossella to call for his resignation.

Help for Businesses and Residents

The Federal Emergency Management Agency, used to dealing with tornadoes and floods, has struggled with spending the nearly $9 billion it is in charge of distributing to help New York City recover from September 11. Many of the agency´s programs, now coming to a close, were fraught with glitches, criticisms and calls for extensions. Last November, the agency missed payments on the Albany post office box where New Yorkers had been told to send aid applications. The box closed, and hundreds of applications were stamped "return to sender." The Urban Justice Center analyzed the agency´s awards and found that people from less affluent areas like the Lower East Side and Chinatown applied in fewer numbers and got less help than Tribeca residents.

On January 31, the agency stopped taking applications for one of its most contentious programs, which was set up to help people struggling to pay their home mortgage and rent after September 11. The Federal Emergency Management Agency did not begin publishing brochures for the program in languages other than English until last June, when it relaxed some of the program´s eligibility requirements. Right up until last week´s deadline, advocates for immigrants, local politicians and others called for an extension, saying that not enough people who needed help knew about the program.

The agency´s federal recovery officer, Brad Gair, has said that he is confident the agency reached the people who really needed help. However, when the Federal Emergency Management Agency´s Inspector General´s office did its own review of how well the agency did its job, it concluded that it should have been more flexible and fair when distributing aid after 9/11. The review, released in January, also said that the agency should have worked harder to understand the indirect economic effects of the attacks.

But the Federal Emergency Management Agency is not the only office under fire. Residents and businesses have also criticized the state and city agencies that administer 9/11 programs, saying that people entitled to rebuilding funds cannot always get them because of circumstances beyond their control. The Lower Manhattan Development Corporation is giving out $281 million in federal funds to tenants near Ground Zero, but people who live in buildings with outstanding fire or building code violations can´t get grants until their landlords make repairs. Meanwhile, 9/11 scam artists have managed to bilk charities and government agencies alike (see box).

The World Trade Center Business Recovery Grant Program, which stopped taking applications from small businesses at the end of last year, will give out at least $492 billion, $11 million more than the fund actually has in its coffers. The agency in charge of the program, the Empire State Development Corporation, has said it may need to reallocate money from other 9/11 programs to make sure that every qualifying business gets its grant.

But even though the program will give more than it planned, many small businesses say the individual grants are small change compared to actual losses. As of last November, half of the grants given out were for less than $13,000.

While such programs have helped some people and businesses that suffered losses from the attack, their importance will fade in the months ahead, as many cease operation and government and business begin to rebuild downtown. For that to succeed – and for any of the proposed designs to appear on the skyline – business deals and the overall economy could prove more important than any government aid package. Whoever funds the redevelopment projects, assuming anyone does, the story will continue to be about money.

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