Dive Brief:

• Stating that success "is contingent on some public-sector support," the Port Authority of New York and New Jersey is considering offering financial concessions — rental payment reductions valued at $43 million — to allow progress on construction of 2 World Trade Center in lower Manhattan, The Wall Street Journal reported.
• The effective cost of the concessions to the Port Authority would be $18 million after factoring in the anticipated New York state tax credits. The developer, Larry Silverstein, who has entered into nonbinding letters of intent to lease 1.5 million square feet in the new tower — half of the total space — to News Corp. and 21st Century Fox, would make a $9 million payment to the Port Authority, reducing its cost to $9 million.
• The Port Authority estimates 2 World Trade Center will add $500 million to the agency’s capital-spending capacity. The Port Authority’s previous plans for 2 World Trade Center included a no-public-sector-support provision on top of earlier subsidies. 

Dive Insight:

In 2014, the Port Authority decided against a $1.2 billion financing package for 3 World Trade Center, but Silverstein continued the tower’s development without it.

One World Trade Center, at 1,776-feet tall, is the tallest of a record group of global "super tall" buildings constructed in 2014, making it the tallest building in the U.S. and third-tallest in the world.

The towers are part of a construction boom taking place in New York City, which is expected to break the $40 billion construction spending mark in 2016. Driven by the public sector, this is the first year since 1994 that government infrastructure and public works projects don't make up the majority of construction spending.

However, construction costs for office space in New York are the most expensive in the U.S., at $500-$550 per square feet, not including an extra 30%-40% for indirect costs such as professional fees, administration marketing, financing and tenant improvements.