THIS EXAM IS BASED ON YOUR REVIEW OF THE ROLE ASSIGNED TO YOU IN THE WORLD TRADE CENTER CASE. YOU WILL NEED TO BE FAMILIAR WITH THE FACTS OF THE CASE AND THE TEXTBOOK MATERIALS TO COMPLETE THE EXAM. ON TOP OF THE FIRST PAGE OF THE EXAM WRITE (i) YOUR NAME, AND (ii) WHICH SIDE OF THE CASE YOU HAVE BEEN ASSIGNED. ALSO, NUMBER THE PAGES TO AVOID CONFUSION IF THE EXAM GETS OUT OF ORDER ETC. PROGRAM ON NEGOTIATION AT HARVARD LAW SCHOOL AN rNTER-UNIVERSITY CONSORTIUM TO IMPROVE THE THEORY AND PRACTICE OF CONFLICT RESOLUTION WORLD TRADE C~mR REDEVLOPMENT NEG~1~FION Confidential Instructions for the State’s Representative The property in question has belonged to the State of New York since it was acquired by eminent domain in the mid-1960s. It was intended to foster development of downtown New York City. For many years, the site operated at a heavy loss. It was not until recently that it finally became profitabre. Now, the risks and costs have been somewhat alleviated by the assignment of the lease to the Developer. It is in the Developer’s financial interest to redevelop the site, but there are other reasons to go forward as well. The tragic events of 9/11 had a profound impact on the people of New York and the nation as a whole. Redevelopment will be helpful in the healing process and to showcase New York’s resilience. As the site owner, you need to convey energy, practicality, and vision that will sweep away all hesitation. If a permanent memorial can’t be decided upon, at least get agreement on a temporary memorial. If full funding can’t be found, start with partial funding. It is crucial that agreement be reached today. That said, you must also look out for your other interests: The Site Plan This issue is very important to you. Under the lease agreement signed before the terrorist attacks, you collected rent from the Developer at the rate of $12 per square foot of office space. Before the attacks, the Developer had 10 million square feet of office space on the property. That amounts to $120 million in annual payments to the State. Given City building codes, the Developer will need at least 10 acres of land to re-build 10 million square feet of office space. With State budget shortfalls predicted, you are extremely reluctant to lose this revenue. Do what it takes to see that the Developer can re-build. However, as the representative of the people of the State of New York, you are also under great pressure build a memorial that satisfies the Families. — • Your first choice for the 17-acre site is to create a five-acre memorial within the footprint of one of the Twin Towers, leaving 12 acres for commercial development. This will create substantial opportunities for you to collect lease revenues, and still leave room for a sizable memorial. If it doesn’t cause an uproar among the Families, you could also accept an agreement that dedicates just two acres to a memorial, leaving 15 acres for commercial development. However, you could only support this proposal if the Families were somehow brought onboard. Perhaps the City will donate adjacent land for the memorial? • You cannot agree to any plan that does not allow you to generate $120 million a year in payments for the State. This case was developed by Professor Lawrence Susskind, Katharine Harvey, and David Kovick of the Consensus Building Institute, F. Peter Phillips, Marc Wolinsky, Cathy Cronin Harris, and Simeon Baum. Full case materials, including the teaching note, are available online at sI ore , Telephone: 800-258-4406, Fax: 617-495-7818. This case may not be reproduced, revised or translated itt whole or in part by any means without the written pet-mission of the Director of Curriculum Development, Program on Negotiation, Harvard Law School, 518 Pound Hall, Cambridge, MA 02138. Please help to preserve the usefulness of this case by keeping it confidential. Copyright © 2007 by the International Institute for Conflict Prevention and Resolution, and the President and Fellows of Harvard College. All rights reserved. (rev. 5/07) CONFIDENTIAI INSTRUCTIONS FOR THE STATE’S Total Money Allocated For the Project. This issue is somewhat important to you. Your constituents are diverse, and it is important that the site be redeveloped for both commercial use and as a memorial. However, you have already invested significant resources in the site and do not have additional money to contribute. With the estimated insurance payout for rebuilding likely to be between $3.5 and $7 billion: Your first choice would be to see $6 billion allocated for commercial development and $1 billion to the memorial. This would be enough money to help stimulate development in the area, while also making the Families happy. However, if less money is available, you could support allocating $4 billion for commercial development and approximately $500 million for the memorial. You’d be willing to support allocating more that $6 billion for commercial development, as long as the money is generated from sources other than the State. And the Families must be satisfied with any arrangements for the memorial. Timing of Construction This issue is very important to you. This is, after all, the State of New York, and it is important that you expedite the development of this site. Additionally, the governor is planning a run for national office and in no way can the State, as owner, is seen as obstructing or delaying the process. Thus, our first choice is to break ground on the memorial within six months, and to begin commercial development within a year. Breaking ground on the memorial and the commercial development will attract a lot of positive media attention for the State (and the governor). If need be, you could also accept an agreement that breaks ground for the memorial in a year while the commercial development begins in two years. At the very least, the memorial must be started before the next campaign cycle. • You cannot accept an agreement that delays ground breaking for both the memorial and the commercial development more than two years. This would be both detrimental to State morale and to the political ambitions of the governor. Credit. This issue is very important to you. Both the governor, who is planning a run for national office in two years, and your state political party (which wants to hold onto the governor’s seat~ would be very pleased to get welI-desen,ed credit for leading this effort. • Your clear first choice would be for the State, as owner, to get primary credit for making this process and project a success. You also want to be known as the person who ‘makes things happen quickly and efficiently.’ However, if you can negotiate concessions on other issues, you could live with sharing credit among multiple parties. • It would be unacceptable to you for the City to get primary credit for this project. The current mayor of the City, with whom the governor has always had a challenging relationship, has political ambitions of his Own. With elections on the horizon, you cannot risk losing credit for all the State’s hard work! All rights reserved. (rev. 5/07) 2 REPRESIVE CONFIDENTIAL INSTRUCTIONS FOR TI-1E STATE’S The bottom line is that the State, as owner, cannot afford to lose the revenue generated from the space or to lose the public’s good will. Sure, you might be able to find another Developer, but then it would take years for the site to generate revenue again. With elections on the horizon, it is extremely important to balance public support with the need to tend to the State’s financial requirements. You cannot support an agreement unless you get a deal that ensures the equivalent of your first or second choice outcomes on the issues that are most important to you. Copyrtght © 2007 by the International Institute for Conflict Prevention and Resolution and the President and Fellows of Harvard College. All rights reserved. (rev. 5/07) NEGOTIATION: CONFIDENTIAL INSTRUCTIONS FOR THE STATE’S R~fB~SENTATJVE Worksheet: The State’s Representative Issue 1 The Site Plan – 0 tions 17-acre memorial on site/O acres commercial develo ment 9-acre memorial on site/8 acres commercial develo ment 5-acre memorial on site/i 2 acres commercial develo ment 2-acre memorial on site/iS acres commercial develo ment Issue 2 Issue 3 Issue 4 – — — Pre erences Unacce table Unacce table 1st choice 2′ choice Total Money Available to Spend on the Project Timing of Construction Credit All dghts reserved. (rev. 5/07) 4 Purchase answer to see full attachment Explanation & Answer: 8 Pages Tags: values motivations positions User generated content is uploaded by users for the purposes of learning and should be used following Studypool’s honor code & terms of service.