The New York Observer

2010-07-07

Eliot Brown

Douglas Durst, the taciturn scion of a three-generation real estate empire, has been selected to buy a stake in One World Trade Center, besting in a bidding contest Stephen Ross, the aggressive developer who chairs Related Companies, according to an official familiar with the decision.

The board of the Port Authority, which is building the tower, today opted to designate the Durst Organization the winning bidder, although the firm still must undergo a 30-day period of negotiation with the authority to develop a contract.

Mr. Durst’s bid was viewed as more traditional than that of Mr. Ross, who pitched the building, once known as the Freedom Tower, as a destination that would be complete with amenities like fitness centers (akin to the Time Warner Center, which he co-developed).

Prior discussions involved Mr. Durst investing about $100 million in the deal, and then taking a portion of the upside of the investment. The tower itself is likely to be a money-losing investment for the Port Authority, given its tremendous cost of more than $3 billion, some of which is related to security measures.

It’s a rather fitting victory for Mr. Durst, given that the whole idea of the sale—selling off a stake in the tower—emerged from a meeting late last year between Mr. Durst and Port Authority executive director Chris Ward, according to multiple people familiar with the conversation. From there, the Port Authority reached out to a set of prominent developers, Mr. Durst included, to solicit their bids.

He also was a strong critic of the tower at one point, calling it in New York newspaper ads “the legacy of poor planning and decision-making by the Pataki administration.” (He apparently has come around.)