The church says the Port Authority of New York and New Jersey broke a 2008 promise to rebuild the St. Nicholas Church at a new location down the block from its old site. It also says the Port Authority has started excavating church property without permission as part of the new business and transportation complex at Ground Zero.
"This is not about money, this is about their commitment to rebuild the only house of worship destroyed at Ground Zero," church spokesman Mark Arey said.
The Greek Orthodox Archdiocese of America filed its lawsuit against the Port Authority in a U.S. district court in Manhattan.
The St. Nicholas Church was built in 1916 and was crushed when the World Trade Center towers collapsed. As part of the neighborhood's reconstruction, the Port Authority proposed a swap of the church property for a piece of land down the street so that the agency could build a center for screening vehicles. In exchange, the agency would give the church millions of dollars to build a bigger church.
The church says the two sides had mostly agreed on the terms when the Port Authority abruptly pulled out of talks in 2009. The Port Authority claims the church was demanding too much money.
"After eight months of negotiations in which the demands of the Orthodox Church continued to increase over and above what was originally agreed to in 2008, the Port Authority had to make a practical decision to move on or risk further delaying the entire World Trade Center project," the agency said in a written statement.
The Port Authority has said it offered $20 million of financing, plus as much as $40 million to cover extra costs related to the construction of a Port Authority parking lot under the church. It claims the church wanted a building six times bigger than its original one.
The church said that was only fair because it was giving up the valuable "air rights" over its original site. Air rights allow builders to put skyscrapers on small pieces of land.
In addition, about one-third of the new church would have been a memorial area for people of all faiths to gather, Arey said.