Memorial Cost at Ground Zero Nears $1 Billion

By CHARLES V. BAGLI and DAVID W. DUNLAP
Published: May 5, 2006
http://www.nytimes.com/2006/05/05/nyregion/05memorial.html?_r=2&th&emc=th&oref=slogin&oref=login

The projected cost of building the World Trade Center memorial complex at ground zero has soared to nearly $1 billion, according to the most authoritative estimate to date.

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

The foundation, which had planned to start construction in March, has already quietly broached the possibility with some victims' families of moving important parts of the memorial out of the twin towers' footprints to ground level.

Only two or three 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 5,201 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 from private contributions.

The new estimate, $972 million, would make this the most expensive memorial ever built in the United States. And that figure does not include the $80 million for a visitors' center paid for by New York State. It is likely to draw unfavorable comparisons to the $182 million National World War II Memorial in Washington, which opened in 2004; the $29 million Oklahoma City National Memorial, which opened in 2000; or the $7 million Vietnam Veterans Memorial in Washington, which opened in 1982.

The original World Trade Center itself cost $1 billion in the 1970's, or about $3.7 billion in current dollars. 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 rising rapidly in recent months.

The report includes expenses not previously enumerated, like $25 million in insurance and $22 million for museum exhibit design and construction, as well as 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 official release of the new estimate, Mayor Michael R. Bloomberg said yesterday that he had spoken to both Governor Pataki 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," the mayor said. "We want to build the memorial, but we have to realize that there are conflicting demands in this city."

John P. 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 $494 million only four months ago. In addition, the latest projections include $71.5 million for an underground cooling plant, up from $41.5 million four months ago.

Bovis also identified $300 million in site preparations and infrastructure 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 $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. It also took on financial responsibility for the troubled $2 billion Freedom Tower. Yesterday, some state and Port Authority officials expressed misgivings about the validity of the jump in infrastructure costs, but said that they did not want to say so publicly until they had been briefed.

The ensuing debate over costs and potential design changes may once again raise the possibility that the Port Authority will take over construction of the memorial. Last fall, both Governor Pataki and Mayor Bloomberg seemed to endorse the idea. In the last week, state officials 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, added to $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 almost $60 million.

Foundation officials attributed the earlier estimate, $494 million, to the Lower Manhattan Development Corporation, but Stefan Pryor, the corporation's president, said, "In both instances, the two agencies have worked together."

Early this year, the foundation solicited contractors to build the footings for the complex. Peter M. Lehrer, a construction consultant working for the foundation, and Roland W. 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 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 becoming politically unpalatable, 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 Edith Lutnick, Patricia Riley and Sally Regenhard. In an attempt to cut costs and appease critics, the executives suggested broad changes to the design, according to three people who attended.

In the current design, the names of the victims would be inscribed 30 feet below street level, on a parapet in galleries surrounding underground pools within the footprints of the towers. Officials said that eliminating the galleries and moving the inscription of the names to plaza level would save money and 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 stands 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 member of the foundation board and a champion of the original design by Michael Arad and Peter Walker, 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."