Silverstein wants refi for stalled 3 World Trade Center

TRD New York /
Jan.January 29, 2014 09:25 AM

Larry Silverstein is asking the government to cut him a better financing deal at Silverstein Properties’ unfinished 3 World Trade Center. Executives at the development giant told government officials the firm needs more favorably-structured municipal bond financing to resume construction on the 80-story, 2.5 million-square-foot Lower Manhattan tower.

The initial funding package was put together in 2010.

“There are a number of potential modifications to the 2010 agreement that could both enhance the public sector position and benefit the overall project,” Scott Rechler, the Port Authority’s vice chairman and also CEO of RXR Realty, told the Wall Street Journal. “It is only prudent for us to consider those alternatives.”

According to the Journal,  the 2010 deal that Silverstein struck with government agencies stipulated that the developer would finance the building with $464 million in insurance proceeds and other funds; $210 million in grants from the city and state; $300 million in tax-exempt mezzanine bonds; and $1.3 billion in a mix of Liberty and stimulus bonds. The government agencies committed to back $390 million of that $1.3 billion in debt. And this January, Senator Chuck Schumer announced that he was able to secure $340 million in federal bonds via the Recovery Zone Bond program for the tower.

Silverstein is now in talks to raise more private capital in exchange for tweaks to the government debt guarantee, people familiar with the discussions told the newspaper. Four-fifths of the tower remains vacant — though it did secure a branch of advertising giant WPP as an anchor tenant last month — and it has only risen eight stories so far.

In 2013, the municipal bond market had its worst year since 1994, with a loss of 2.55 percent for a key bond index. While prices have bounced back slightly in January, the tax-exempt market remains a difficult ones for issuers.

“There’s demand but it’s tempered demand right now for munis,” Robert DiMella, co-head of MacKay Municipal Managers, told the Journal. “They are not going to be able to come with just any structure and think the market will absorb it,” he added about the 3 World Trade financing. [WSJ]  – Hiten Samtani


Related Articles

arrow_forward_ios
529 Fifth Avenue and Silverstein Properties' Larry Silverstein (Google Maps; Getty)

Silverstein gets $171M refi for 529 Fifth Avenue

Silverstein gets $171M refi for 529 Fifth Avenue
TRD's Erik Enguist and Port Authority's Rick Cotton

Port Authority, out $3B, has waterfront land to sell

Port Authority, out $3B, has waterfront land to sell
TRD's Erik Enguist and Port Authority's Rick Cotton

Can the Port Authority bring NYC back? Tune in to TRD Talks Wednesday

Can the Port Authority bring NYC back? Tune in to TRD Talks Wednesday
“I believe in the future of Downtown Los Angeles”: Silverstein closes US Bank Tower buy

“I believe in the future of Downtown Los Angeles”: Silverstein closes US Bank Tower buy

“I believe in the future of Downtown Los Angeles”: Silverstein closes US Bank Tower buy
Port Authority Bus Terminal and AECOM CEO Troy Rudd (Roger Rowlett via Wikipedia; AECOM)

“Worst place on earth” may be buried underground

“Worst place on earth” may be buried underground
Anna Wintour of Condé Nast, One World Trade Center and Douglas Durst (Wintour by Dia Dipasupil/Getty Images; 1WTC via iStock; Durst by Patrick McMullan via Getty Images)

Condé Nast wants out at 1WTC. Durst may not be OK with that

Condé Nast wants out at 1WTC. Durst may not be OK with that
Silverstein Properties chairman Larry Silverstein (Getty)

Silverstein Properties raises $30M on Israeli bond market

Silverstein Properties raises $30M on Israeli bond market
US Bank Tower at 633 West Fifth Street and Silverstein Properties' Larry Silverstein (Getty, Wikipedia Commons)

Silverstein Properties confirmed as buyer of LA’s US Bank Tower

Silverstein Properties confirmed as buyer of LA’s US Bank Tower
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...