Deutsche Bank Building After 9/11: Contamination, Fire, Acquittals

The Deutsche Bank Building at 130 Liberty Street was the 42-story office tower next to the World Trade Center that was severely damaged on September 11, 2001, then spent nearly a decade being taken down in a project marked by extreme toxic contamination, the recovery of hundreds of victims’ remains, a 2007 fire that killed two firefighters, criminal charges against contractors, and roughly $160 million in costs. The site was finally cleared in January 2011.¹

What the South Tower’s Collapse Did to the Building

When the South Tower fell, a large section of its façade tore into the north side of the Deutsche Bank Building, opening a 15-story gash and severing two of its primary columns. The collapse also generated wind speeds estimated between 158 and 206 miles per hour, shattering roughly 1,500 windows.²

With the envelope of the building broken open, the toxic dust cloud from the collapsing towers poured inside, and rain kept coming in for months. A 20,000-gallon diesel fuel tank in the basement ruptured and ignited, saturating the lower floors with a black residue that workers would still be dealing with years later.² Deutsche Bank, which had acquired the tower when it bought Bankers Trust in 1998, was left with a structurally compromised and dangerously contaminated building.³

Contamination and Human Remains

Deutsche Bank spent $33 million over ten months assessing the building, collecting about 60,000 samples and producing 30 expert reports across 52 volumes of data.⁴⁵

The building also held the remains of 9/11 victims. In September 2005, construction workers preparing the roof for demolition found bone fragments in the gravel.⁶ A comprehensive search ordered in April 2006 recovered hundreds more; by that fall, 784 bone fragments had been catalogued.² Discoveries continued for years. Over a single weekend in July 2010, workers found 74 more fragments in gravel that had been raked to the sides of the roof.⁷ In total, more than 700 body parts were recovered from the building, alongside debris from the hijacked aircraft.⁸

Why the Building Came Down

Repair was never a realistic option, and the fight was over who paid for demolition. Deutsche Bank and its insurers — Allianz, AXA, Chubb, and Zurich Financial Services — argued for years, with former U.S. Senate Majority Leader George Mitchell brought in as a mediator in late 2003 by Governor George Pataki.⁹

Under the settlement that followed, the Lower Manhattan Development Corporation bought the building in 2004 for $90 million, with demolition and cleanup costs initially capped at $45 million for the LMDC and insurers covering overruns.⁹ By the end of the project, Allianz and AXA had paid a combined $102 million to the LMDC.¹⁰ The EPA led a multi-agency review of the deconstruction plan starting in December 2004, and the final plan was approved in September 2005.¹¹

The Contractors and the Flawed Plan

Bovis Lend Lease was hired as general contractor under a contract that started near $74.8 million and grew to about $81 million.¹² To move faster, the LMDC and Bovis decided to decontaminate and demolish at the same time. Workers used acetylene torches to cut steel beams on upper floors while lower floors were sealed in plastic and plywood to maintain a “vapor lock” for hazardous material removal.¹³

Bovis subcontracted the abatement and demolition to the John Galt Corporation. The New York City Department of Investigation had raised concerns as early as 2006 about John Galt’s lack of toxic-cleanup experience and its ties to a company with a history of “integrity, competence and financial problems.” Members of Community Board 1 warned at public hearings that the simultaneous work plan and the choice of John Galt risked a “major disaster.” Officials dismissed the warnings.¹³

The August 2007 Fire

On August 18, 2007, a fire broke out on the 17th floor, reportedly sparked by a worker’s discarded cigarette.¹⁴ It fed on construction debris, exposed lumber, and the plastic sheeting used for decontamination. The interior had been carved into a maze of partitions, and thick, fuel-rich black smoke spread fast.¹⁵

FDNY firefighters Robert Beddia, 53, and Joseph Graffagnino, 33, of Engine Company 24 became disoriented on the 14th and 15th floors. They ran out of air and issued mayday calls. Both were found unconscious without their facepieces and pronounced dead at a trauma center.¹⁵ More than 100 other firefighters were injured.¹⁶

The Standpipe Failure

The fire ran out of control largely because the building’s standpipe — the internal water supply firefighters depend on — was inoperable. A 42-foot section had been removed from the basement during abatement work. The fire department connections on multiple sides of the building were removed or disabled, and both fire pumps were out of service. Firefighters could not establish a water supply for more than an hour.¹⁵

Missed Inspections

FDNY rules required inspection of buildings under demolition at least every 15 days. Between the start of demolition on March 20, 2007, and the fire five months later, not a single inspection was conducted at 130 Liberty Street. The captain of the nearby Engine 10 said he did not consider the 15-day rule a “hard and fast rule.” Battalion and deputy chiefs admitted they had never enforced it, and some said they had not been aware of the requirement before the fire.¹⁶

A report by then-Manhattan District Attorney Robert Morgenthau concluded that the simultaneous decontamination-and-demolition approach had turned the site into a fire hazard, with sparks from torches on upper floors falling onto flammable materials sealed below.¹³ Mayor Michael Bloomberg ordered a review of construction and demolition regulation that produced 33 recommendations, and the district attorney reached an agreement with the city to create a civilian inspection unit within the fire department to monitor construction sites.¹⁷

Criminal Charges and Acquittals

In December 2008, the Manhattan District Attorney’s Office indicted the John Galt Corporation and three individuals: Mitchel Alvo, John Galt’s director of abatement; Salvatore DePaola, a John Galt foreman; and Jeffrey Melofchik, the Bovis Lend Lease site safety manager. All were charged with manslaughter, criminally negligent homicide, and reckless endangerment.¹⁷ Prosecutors alleged the defendants knew the standpipe had been severed for roughly eight months and failed to repair it or report it, while Melofchik continued to sign daily reports certifying the fire-suppression system was operational.¹⁸

Bovis Lend Lease itself was not prosecuted. The company entered into a non-prosecution agreement, acknowledging responsibility for its actions and agreeing to fund a $10 million memorial for the families of the fallen firefighters.¹⁴¹⁸ No criminal charges were brought against FDNY or Department of Buildings employees, or against the LMDC. Morgenthau said he declined to indict city agencies to avoid protracted appeals over sovereign immunity and to prioritize immediate reforms.¹³

The trial stretched over roughly two and a half years. DePaola and Melofchik faced a jury; Alvo and the John Galt Corporation chose a bench trial before Justice Rena K. Uviller. The defense argued that the workers had not understood that the severed pipe was a standpipe, that it had not been painted red as required, and that the fire resulted from a “perfect storm” of regulatory failures and pre-existing hazards beyond their control. Defense attorney Rick Pasacreta called the site workers “scapegoats” and argued that government inspectors who had been absolved of liability were more responsible.¹⁹

In late June and early July 2011, all three individual defendants were acquitted. A jury found DePaola not guilty after seven days of deliberations and acquitted Melofchik shortly after. Justice Uviller acquitted Alvo on July 6, 2011.²⁰¹⁹ The John Galt Corporation was the only entity convicted, found guilty of second-degree reckless endangerment, a misdemeanor. It was sentenced to a conditional discharge of one year and a $5,000 fine. An appellate court unanimously affirmed the conviction in January 2014.²¹

OSHA Fines and Civil Settlements

Federal regulators acted separately. In February 2008, OSHA cited Bovis Lend Lease and the John Galt Corporation for 44 safety violations and proposed nearly $500,000 in combined fines. Five violations were classified as “willful,” the agency’s most severe category; the rest were “serious.” The citations covered the missing standpipe section, insufficient water supply and pressure, blocked and unmarked exits, a lack of fire extinguishers, and smoking on site, with regulators accusing the contractors of “indifference or intentional disregard for dangerous conditions.”²²

On the civil side, Linda Graffagnino, widow of Joseph Graffagnino, reached a $10 million settlement for herself and her two children, with Bovis Lend Lease contributing $9 million and New York City paying $1 million.²³ A court order arising from the non-prosecution agreement blocked Bovis’s admissions from the criminal investigation from being used in civil proceedings, allowing the company to deny responsibility in those cases. Other injured firefighters and the family of Robert Beddia pursued their own civil claims.¹⁴

Finishing the Demolition

The fire had halted work at the 26th floor. The LMDC abandoned the simultaneous decontamination-and-demolition approach and replaced John Galt with LVI Environmental Services, ranked the top asbestos abatement contractor in the country by Engineering News-Record. Interim safety work included two new fire-rated stairwells, removal of the plywood barriers between floors, resealing the building, and shoring the fire-damaged areas before work resumed.²⁴

LVI began work in January 2008. Cleaning and decontamination of the remaining floors was finished in September 2009. Demolition ran through 2010, and by January 2011 the building had been reduced to a one-story stub. The LVI-led phase alone cost $120 million, split between $95 million for abatement and $25 million for demolition.²⁵ The overall deconstruction cost was nearly $160 million and ran about six years past the first of many promised completion dates.¹

The Site Today

The cleared parcel at 130 Liberty Street is designated “Site 5” in the World Trade Center redevelopment plan. Originally intended for commercial or hotel use, the plan was modified to allow mixed-use development including a required affordable-housing component. In February 2021, the LMDC conditionally designated a development team through a competitive process, and the project has been moving through public comment and approvals from the LMDC, the Empire State Development Board of Directors, and the Port Authority Board of Commissioners. If approved, the Empire State Development Corporation will own the site and lease it long-term, with rent payments directed to the 9/11 Memorial, Museum, and Performing Arts Center.²⁶

1
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New York Times. OSHA Cites Contractors in Deutsche Bank Fire
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Fire Engineering. FDNY Firefighter’s Widow Settles $10M Deutsche Bank
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Empire State Development. WTC Site 5