July 6 (Bloomberg) -- World Trade Center developer Larry Silverstein told the Port Authority of New York and New Jersey he intends to bring their dispute over the redevelopment of Ground Zero to arbitration if they can’t resolve the matter.

Silverstein filed a notice under his development agreement with the agency that calls for the parties to settle in 10 business days or go to binding arbitration, according to an e- mailed statement from Bud Perrone, his outside spokesman.

The developer and the agency failed to come to an agreement in talks arranged by Mayor Michael Bloomberg and New York Assembly Speaker Sheldon Silver last month. Silverstein wants $2.6 billion in loan guarantees to build two skyscrapers at the site. The Port Authority estimates he’s asking for a total of $4 billion when all costs are included.

“Today’s action is designed to inject a renewed sense of urgency to these discussions,” Silverstein said in the statement. “One way or another, we must take any and all steps necessary to resolve, once and for all, the disputes that have arisen as a result of the Port Authority’s continued and admitted delays.”

Authority Director Christopher Ward said Silverstein “is walking away from the negotiating table simply because the public has been unwilling to sacrifice critical transportation projects to subsidize private speculative office space.” Ward’s comments were e-mailed by his staff.

The authority owns the 16-acre trade center site in lower Manhattan.

Bloomberg, in a statement e-mailed by his staff, blamed the Port Authority for the breakdown in negotiations.

“Unfortunately, not everyone worked as hard as necessary to find a solution,” the mayor said. “No one disputes that the Port Authority is engaged in many projects important to our region, but pitting those projects against the development of the World Trade Center site creates a false choice.”

The mayor is founder and majority owner of Bloomberg LP, parent of Bloomberg News.

To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net.

Last Updated: July 6, 2009 16:02 EDT