NEW YORK CITY-The Port Authority of New York and New Jersey and office and retail REIT Vornado Realty Trust are continuing “active negotiations” as the deadline to finalize plans for the construction of a 1.3-million-square-foot office tower atop the Port Authority Bus Terminal approaches on August 7, a Port Authority spokesman confirms to GlobeSt.com. A report in the Wall Street Journal said this morning that Vornado stands to lose its designation as the tower’s developer if a deal isn’t struck by Sunday. The article notes that an extension of the deal is also possible, similar to an extension agreement the Port Authority Board reached in 2010.

GlobeSt.com previously reported that Vornado, Lawrence Ruben Co. and 20X Square Associates formed a joint venture to develop the class A tower over the terminal’s north wing in April 2007, a deal anticipated to generate $500 million over the term of the long-term 99-year lease. The funds would also cover improvements to the terminal facility, including increased bus capacity and the renovation of approximately 60,000 square feet of retail space within the north wing. At that time, the Port Authority board authorized exclusive negotiations with the joint venture over the air rights over the existing terminal.

Earlier on, both Vornado and Ruben were designated as developers for the terminal’s air rights in 2000, but plans stalled in 2003, according to Port documents. But in 2009, negotiations on the tower development ceased as a result of the downturn, and the second of two exclusivity agreements expired, GlobeSt.com previously reported. A spokesman for Vornado declined to comment to GlobeSt.com about the current negotiations.