Daily News from New York, New York • 48

SUkP 500 4.90 1,106.62 FASDAQ 4.73 1,892.09 oow JOMES 39.45 10,179.16 AS THE CITY'S largest financial institutions went on terrorist alert yesterday, a bank with a smaller presence here but big ambitions held a showy groundbreaking for a new headquarters in midtown. BY LORE CROGHAN DAILY NEWS BUSINESS WRITER The Bank of America pitched an air-conditioned tent at 43rd St. and Sixth and in- i. I v. I I the Sept.

1 1 terrorist attacks, primarily to rebuild disaster-stricken lower Manhattan. Downtown's need for Liberty Bonds has become more acute since then because now developer Larry Silverstein wants the funds to rebuild the World Trade Center site. He was hoping to collect insurance payments of $7 billion for the destruction of the Twin Towers but jury verdicts have slashed his possible payout to $4.5 billion at most. However, the Bloomberg administration doesn't regret that it has already dished out a big chunk of bond funding to Durst and the bank. "With Liberty Bonds, our first priority is to rebuild lower Manhattan but the Bank of America has jobs today," Andrew Alper, president of the city Economic Development told the Daily News.

In exchange for the Liberty Bonds plus $42 million in other tax breaks granted in February the bank has promised to keep more than than 3,000 existing jobs in the city, and add about 1,500 jobs in the next 15 years. "This is probably the best day we could choose to break ground," Gov. Pataki said. The $1 billion glass tower, to be completed in 2008, will be the main office for the Charlotte, N.C.-based bank's New York City operations. About half of the 2.1 million-square-foot tower at 1 Bryant Park will be occupied by its global corporate and investment banking, wealth and investment management, consumer and commercial banking units.

The Durst Organization will find tenants to rent the rest of the office space and will restore Henry Miller's Theater, a 1918-vintage playhouse that sits on the two-acre site. The midtown project has generated its share of controversy particularly last fall, when it won $650 million in tax-exempt Liberty Bonds. The funding was created after vited more than 100 dignitaries and reporters to hear about the 54-story skyscraper it's starting to build there. "The new tower represents our commitment to, and belief in, the future of New York City," the bank's chief exec, Kenneth Lewis, told the crowd. The ceremony offered a moment of triumph for the bank's joint-venture partner, developer Douglas Durst.

His family has spent nearly four decades trying to get an office project underway at the site. The governor and the mayor who showed up together after ringing the opening bell at the New York Stock Exchange used the occasion to voice their defiance of Al Qaeda's latest threats against the city. "When we put these shovels in the ground, it shows that the terrorists cannot win," said Mayor Bloomberg. DAVID HANDSCHUH DAILY NEWS Gov. Pataki and Mayor Bloomberg at groundbreaking ceremonies for Bank of America HQ on Sixth Ave.

and 42nd St. Meusdlay getts Cxay fair adlueirfeeir MEss 'Village' fails to give Disney shares a fift null jmHtmmmmmr.imm.m. mi :2 't 4 I i i 1 I 1 I Ql. BY PAUL D. COLFORD DAILY NEWS STAFF WRITER NEWSDAY WON a court decision yesterday that allows the paper to begin settlement talks with advertisers that were billed at rates based on inflated circulation levels.

U.S. Magistrate Judge William Wall denied a bid by lawyer Joseph Giaimo, who tried to block the talks as he seeks class-action status for a suit charging Newsday with circ-hiking fraud. Giaimo, who currently represents 10 Newsday advertisers, had said in a court filing that the paper's plan to settle claims in an effort to minimize damages undermined "the whole purpose of the class action." Robert Hirth, the attorney for News-day and its circ execs named in the suit, had told the court that communications with prospective members of a class action are permitted in the course of doing business. Giaimo told the Daily News he'll appeal yesterday's decision or seek to reargue his motion. Meanwhile, he'll try to put an ad in Newsday informing advertisers about the suit and the potential for damages.

Yesterday's court hearing in Central Islip, L.I., scheduled by the federal magistrate on July 19, took place on the day set by Newsday president Timothy Knight for the paper's sales staff to start resolving advertisers' claims. Tribune Co. the parent of Newsday and Spanish-language Hoy, which also inflated its circ in recent years has laid aside $35 million to cover settlements. Newsday will also lower its ad rates and reimburse advertisers if its audited circ sinks below 525,000 on weekdays or 575,000 on Sunday through 2005. The numbers reflect much deeper cuts in Newsday's reported circ than the paper acknowledged in June.

Newsday said yesterday's ruling affirmed its plan "to move quickly to meet with advertisers and initiate constructive discussions to resolve our circulation issues with them." "THE VILLAGE" CAN'T save Disney. Disney's stumbling movie studio finally did some big numbers this weekend with M. Night Shyamalan's scary flick, but not enough to turn heads on Wall Street. The stock was up just 1 cent to $23.10. SG Cowen media analyst Lowell Singer called the $50.8 million take "fine" for "The Village" but "not spectacular," especially given the fact that the movie opened on 3,730 screens making it the fifth largest release ever.

Disney needs a big blockbuster badly. Since the beginning of the year, the Magic Kingdom has had one bomb after another from "Hidalgo" to "The Alamo." The studio's poor showing has been a big drag on Disney CEO Michael Eisner, who's taking heat for turmoil at ABC and mishandling key relationships with Pixar and Miramax chief Harvey Weinstein. Total box office take for "The Village" is expected to hit about $145 million, meaning it could turn a profit But the movie is expected to lag past Shyamalan megahits like "The Sixth Sense" which scored $293 million at the box office. Phyllis Furman "The Village," starring Joaquin Phoenix, has opening weekend take..