The Port Authority of New York and New Jersey has more to gain than lose by loaning Silverstein Properties more money to construct 3 World Trade Center, according to an unsigned editorial.
Some backstory: The Authority, city and state issued Silverstein $390 million in backstop financing for the 80-story building in 2010, as previously reported. But the firm can’t seem to get a loan to build the skyscraper, despite locking in a private-sector tenant to anchor the tower with a 515,000-square-foot lease, according to the Crain’s editorial.
Hence, Silverstein’s request for $1.2 billion in tax-exempt bonds to help finance the stalled tower.
Critics say Silverstein is asking for a better deal than the firm got in 2010, that the office tower won’t fill and that the move would be off-track with the authority’s purpose — to maintain the area’s transportation infrastructure, Crain’s wrote.
But the new bonds would give the Authority the right to foreclose in 90 days if the developer defaults — a more secure deal with a $2 billion asset as a consolation prize, Crain’s pointed out. Moreover, Silverstein’s other financial backers, providing $450 million in added financing, would keep pressure on the firm to fill the tower instead of holding out for sky-high rents. And hey, “leasing activity downtown is heating up” anyway, the article said.
As for The Real Deal‘s latest report on the matter, the board is split, with vice-chair Scott Rechler for the deal and commissioner Kenneth Lipper against, as previously reported. The Port Authority board will decide April 23. [Crain’s] -- Angela Hunt