City approves Liberty Bonds for 7WTC

Real Estate Weekly, Jan 22, 2003 by Elaine Misonzhnik

On Jan. 14, the New York City Industrial Development Agency announced that it will provide up to $400 million in tax-exempt Liberty Bonds to help Larry Silverstein rebuild 7 World Trade Center. The move comes after increased public pressure for IDA to disclose what it plans to do about federal aid for the project.

"The New York Liberty Bond Program is a major tool for securing Lower Manhattan's position as the financial capital of the world," said Andrew M. Alper, president of New York City Economic Development Corporation. "I am pleased that 7 World Trade Center has been approved to take advantage of this program. The former 7 World Trade Center was an integral part of Lower Manhattan's makeup and its reconstruction will provide a tremendous boost to the revitalization of the Downtown business community."

7 World Trade Center, which will replace the original office building between Barclay and Vescey Streets in Lower Manhattan, will contain 1.7 million SF of space and serve as the home of a Con Edison electric substation. It's construction will cost Silverstein Properties approximately $700 million, about half of which sum the developer plans to pay with the insurance proceeds from the original building.

"Rebuilding World Trade Center 7 is a vital part of allowing Lower Manhattan to recover and rebuild," said Charles A. Gargano, chairman of Empire State Development. "New York State remains committed to ensuring that building is rebuilt to provide for future economic growth in Lower Manhattan."

Financial aid for 7 World Trade Center has figured in IDA's discussions since the fall of last year, prompted by the fact that Silverstein was undertaking the development without an anchor tenant and thus would have difficulty finding a lender.

Now that the issue of federal aid has been settled, published reports say that Merrill Lynch has expressed interest in the project, as have the Bank of New York and HSBC.

Larry Silverstein, president and chief executive officer of Silverstein Properties, commented that "the action by the Liberty Bond Program assures that construction of the new 7 World Trade Center will go forward."

"I am deeply appreciative of Governor George Pataki and Mayor Michael Bloomberg for their support of this venture," he said.