Additionally, SPI would use its remaining insurance money from the 9/11 attacks to finance construction on Towers 3 and 4 and pay ground rent to the Port, and all of its Liberty Bonds proceeds would go toward building the two towers.

Largest of SPI's planned three towers, Tower 2, has at least a chance of being built, although SPI had proposed scrapping it to save costs. Under the tentative agreement, the planned 2.3-million-square foot property would be built to at least street level under a scenario to be jointly developed by the Port and SPI. "This plan would preserve flexibility for the future development of the office tower driven by market demand," according to the joint statement.

Furthermore, the agreement would entail the developer and the authority jointly coming up with a plan to better integrate their construction teams in view of the interrelated components on the east side of Ground Zero. According to the joint statement, this would include "a more formal process of information-sharing, decision-making and schedule development and implementation," along with "reciprocal mechanisms relating to delay to provide investors, lenders and tenants with reasonable certainty of timely project delivery."

Over the next 120 days, both sides will negotiate agreements "consistent with the development plan and framework," according to the joint statement. The Port's board will have final approval on the agreements.

In a statement of his own, SPI president and CEO Larry Silverstein says the agreement "will accelerate the rebuilding of the World Trade Center. This is great news for New York." Scott Stringer, the Manhattan borough president, says the agreement "paves the way for a project that will transform the scar of Ground Zero into a badge of honor. This new financing plan should end the most recent stalemate and set us up to refocus our attention on the common goal: ensuring that we build a future for Lower Manhattan that pays justice to the memory of those we lost, and invests in the communities that remained in this neighborhood throughout nearly a decade of uncertainty."

Delivering prepared remarks Thursday evening, Mayor Michael Bloomberg expressed confidence that "this agreement is going to turn out to benefit everyone in the end. Reaching it meant getting everyone to the negotiating table in the first place, and it was not quite a year ago that we brought all parties together at Gracie Mansion and they agreed to make it work. And they did it."

Gov. David Paterson says in a statement that the agreement strikes "the critical balance between the public and private sectors that I have called for throughout these negotiations…The way forward is not through legal means, but cooperation, commitment and dedication to continuing progress on the World Trade Center site."

His New Jersey counterpart, Gov. Chris Christie, strikes a sterner tone, saying, "We have a moral duty to the memories of those we lost in the World Trade Center attacks to rebuild this site, and we also have a fiduciary duty to New Jerseyans and New Yorkers to make sure that our final agreement is financially sensible and fair."