The Port Authority of New York & New Jersey is set to vote Wednesday on providing a $1.2 billion subsidy for Silverstein Properties’ development of 3 World Trade Center.
Kenneth Lipper, one of the commissioners, has been leading the opposition to the subsidies, and could spur several “no” votes, which is relatively uncommon at the agency. Some industry players say the proposed 80-story tower should be put on hold until Silverstein can finance it privately. Under the deal, the agency would back the loans that Silverstein would arrange and be responsible for.
“The Port Authority should stop using its access to credit to finance things that are not related to the Port Authority’s core mission,” Richard Ravitch, real estate developer and former chair of the Metropolitan Transportation Authority, told the Wall Street Journal.
Other critics point to the 2.5 million square feet of unleased space among One World Trade Center and 4 World Trade Center, two of the four total towers planned. Although advertising agency GroupM grabbed 515,000 square feet at 3 World Trade Center, 2 million square feet remains unleased.
But Scott Rechler, vice chair at Port Authority, is in favor of the subsidies, arguing that the deal would allow for slow leasing over the next 10 years before 3 WTC would default on the loan. [WSJ] – Mark Maurer