NEW YORK - Rebuilding New York City's World Trade Center suffered another setback on Wednesday when New Jersey unexpectedly opposed a plan to redevelop the site destroyed by the September 11 attacks.
Negotiators have struggled to reach a deal with construction on the site's centerpiece Freedom Tower due to begin in mid-April, and New Jersey's opposition hit just when agreement finally appeared close.
"My first look at the plan financially isn't encouraging to me. They need to be restructured in my view," New Jersey Gov. Jon Corzine told reporters.
New Jersey has a say in the matter because the site's landowner is the Port Authority of New York and New Jersey, an agency controlled by both states that is negotiating with the property developer, Larry Silverstein.
Corzine also said the current structure of the deal could force the Port Authority to raise tolls for the bridges, tunnels and other infrastructure it operates, and that the plan needed to provide funding for a memorial for the nearly 3,000 people who died in the attacks.
Since his election last November, Corzine has been seen as letting New York take the lead in the matter, but Corzine came out against the deal just as the Port Authority and Silverstein appeared on the verge of an elusive agreement.
"The New Jersey side is doing everything it can to squeeze the maximum amount of money out of it for New Jersey," said a source familiar with the negotiations who spoke on condition of anonymity.
The source said negotiators for Silverstein and the Port Authority had reached a deal that the New York side of the Port Authority agreed to and that New Jersey was holding out.
A spokesman for Silverstein declined to comment, and a Port Authority spokesman said he had nothing to report on the negotiations.
Talks between Silverstein and the Port Authority had broken down earlier this month amid recriminations and bickering over the $8.3 billion project, but the two sides renewed talks and may have been on track to present a proposal to Thursday's Port Authority public board meeting.
Talks have focused on who of the two should build which of the office towers planned for the site, how to divide up insurance proceeds from the destruction of the World Trade Center, and what rent Silverstein should pay to the Port Authority.
The 1,776-foot (540m) Freedom Tower is not seen as the most profitable venture but is viewed as emotionally important for replacing the Twin Towers in the Manhattan skyline and because the height of the building will be the same as the year of American independence.