For more than four decades, the World Trade Center – whether standing majestically over lower Manhattan, lying in the ruins of a terrorist attack, or awaiting resurrection in a new form – has been one of the world’s greatest public landmarks.
But in a quiet deal nearly 30 years ago, the Port Authority of New York and New Jersey sold off the rights to the buildings’ name to a nonprofit organization established by one of its executives.
The price was $10.
The former executive, Guy Tozzoli, who died this year, earned millions primarily by licensing the name through the group, the World Trade Centers Association. The Port Authority is among the hundreds of licensees around the world paying thousands of dollars each year for the privilege of using the words “World Trade Center.”
Now, with the Port Authority hoping to sell branded souvenirs and merchandise next year after the new One World Trade Center skyscraper opens, the World Trade Centers Association is requesting free office space worth more than $500,000 a year in exchange for use of the trademark.
“I am gravely concerned that a secret deal, years ago, sold the name of the World Trade Center for 10 bucks,” said the Port Authority’s deputy executive director, Bill Baroni. “And I’m going to look into the initial contract and look into where we are today with regard to this organization.”
The deal with Tozzoli’s group came out of an era when the Port Authority – which runs the region’s airports, major bus terminals, PATH train system, seaports – was often criticized for leading an imperial, self-interested existence in which its executives were rewarded with travel and other perks unusual in government.
The sale of the trademark turned out to be perhaps the biggest financial benefit of Tozzoli’s long career, during which he oversaw construction of the Twin Towers. In 2011, his last year as president of the nonprofit, according to WTCA tax filings, Tozzoli received $626,000 for working an average of one hour per week.
A World Trade Centers Association representative said the organization was not set up to make money, but rather to pursue laudable goals. A search of the U.S. Patent and Trademark Office shows the association has trademarked the name on a host of products including greeting cards, pens and binoculars.
“The WTCA is a not-for-profit company,” said its general counsel, Scott Richie. “It has not used the trademarks to generate wealth. It has used the trademarks for the collective benefit of its members, helping them develop facilities around the world that foster trade.”
The spat is intensifying as the 12th anniversary of the 9/11 terror attacks approaches – a tragedy that the non-profit groups says in a promotional video on its website has raised awareness of the World Trade Center brand.
The WTCA, which has its trademarks in more than 100 countries, charges an initial $200,000 for use of the name on a building, plus $10,000 in annual membership fees. The Port Authority, owner of the nearly completed skyscraper called One World Trade Center, pays the $10,000 fee, records show. Silverstein Properties, the firm that is building three other towers on the site that also use the name, has an undisclosed agreement with the association, Richie said.
Each year, more than 320 members, public and private, also pay. In 2011, the company’s revenue was $6.9 million.
Its members are an eclectic mix.
The one in the United Arab Emirates city of Dubai is a 39-story tower with embassies, government offices and corporate headquarters. Boston’s is a 428-room luxury hotel and large convention center on the seaport.
There is also one in a run-down storefront off Hudson Street in Hackensack. Suite 1 of the building is the home of the World Trade Center of Northern New Jersey, which doubles as a real estate office.
Kley Peralta, a 70-year-old real estate broker who runs the center with his son, the owner, said they get business leads through the World Trade Center network.
“Let’s assume someone in the World Trade Center in Bogotá, Colombia, has somebody who wants money to develop a coal mine. And they say, ‘We need $300 million.’ We know where the collateral providers are, so we package the deal. That’s because we are involved with the World Trade Centers Association,” he said. “For us, it’s been fantastic.”
The Peraltas take a commission if they can close a deal, he said.
The broader WTCA says it offers members some of the same kind of services: information about market conditions in their respective regions, local business contacts, business support services and group trade missions.
Members can use the facilities of other World Trade Centers around the world. And the association encourages minimum standards for all its facilities, from hosting periodic speakers’ series to hanging clocks with worldwide time zones.
But use of the name is perhaps the most valuable.
“From my perspective,” Richie, of the WTCA, said, “the right to use a name that has been out in the public face for 40 years is a pretty good bargain in and of itself. But, in addition, we have set up a network of World Trade Centers” that can connect with each other, he said.
He added: “I don’t see where we have an issue where we have a public entity gifting some sort of a benefit to former employees.”
Nevertheless, records show that the venture was lucrative for Tozzoli and other Port Authority retirees. Public tax filings by the WTCA show that in 2009, 2010 and 2011, Tozzoli’s combined annual compensation was $1.7 million. That was on top of a $113,000-a-year public pension. The three years of tax filings are currently the only ones publicly available.
Richie said Tozzoli’s compensation was based on advice from tax attorneys regarding appropriate pay for the nonprofit’s president.
“As the WTCA grew in size and scope, his salary grew much with the size of the organization and the work he had to do,” Richie said. He said he could not comment “on any retirement arrangement.”