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New World Trade Center Skyscraper: Worth It?

One World Trade Center, North America’s tallest building currently under construction at Ground Zero, is going to be by far the most expensive skyscraper ever built. The Port Authority now estimates the total cost of the building to be $3.8 billion, versus $220 million for the two towers the first time around. Even taking inflation into account, the new building costs more than 150% as much as the original two.

The exploding cost of One World Trade comes at the expense of other public works projects in New York and New Jersey, like repairing aging airport and tunnel infrastructure, several projects for which were shelved or postponed. The Port Authority is also relentlessly increasing bridge and tunnel tolls to keep up with construction costs.  The Port Authority is supposed to promote regional growth by building and maintaining vital infrastructure while keeping costs down; at the moment it is subsidizing this tower at the expense of both parts of its core mission.

The problem goes farther than questionable priorities at the Port Authority. Some of the cost increase springs from the special problems associated with construction at Ground Zero, but the cost explosion also reflects the increasingly unsustainable nature of the New York economy.

Over-regulated, cross-subsidized and union-dominated cities like New York are becoming increasingly marginal from an economic point of view. Between city and state regulations, transport costs (including, of course, mounting tolls), high priced union labor, entrenched and politically connected construction companies, consultants, and other blue model bells and whistles New York buildings require, the building has become a drain on the regional economy rather than an asset.

Not many firms can prosper paying the taxes and other associated costs this kind of complexity requires.  The new tower is less a demonstration of resilience than a sign of the deepening bind that New York is in as its dependence on Wall Street inexorably grows. Blue New York needs the outsize profits and bonuses of Wall Street to survive — not to mention the cozy corporatism that links Wall Street to both parties.

New York’s welfare state and its municipal unions need Gordon Gekko a lot more than Gordon Gekko needs New York.

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  • Anthony

    Serious discussion on recasting dynamics (economically) of mix economy warranted WRM; giving specific consideration in this instance to conditions cited vis-a-vis New York’s exploding construction costs, complex municipal costs inure against much needed infrastructure rehabilitation nationally.

  • LarryD

    All financial organizations really need is good communications infrastructure. Given the demagoguery and thuggish threats they’re subjected to by the pols of the city and country, I’m surprised they haven’t pulled up stakes and moved to some other country.

  • John Burke

    You need to spell out the costs of this craziness. One cost is that it now costs $12 to cross the George Washington Bridge — some 75 years after the bridge was built, it has been paid for many times over.

  • Cunctator

    The tower should have been paid for by Saudi Arabia as an apology for propagating the vicious theology that led to 9/11.

  • Brendan Doran

    It must go up as a symbol of defiance, and should have been up in a year. Cost is not an issue. This is an important building, possibly the most important in America.

    This is about the only building I’d take this position on.

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