The Port Authority of New York and New Jersey is angling for an ownership stake in 3 World Trade Center as part of an agreement to grant a $1.2 billion construction loan to Silverstein Properties.
The arrangement aims to quiet critics, many of whom argue the Port Authority has no business backing the real estate endeavor, by tapping the building’s future earnings in exchange for the capital commitment. The move, proponents hope, will soften opposition to the financing package for Silverstein, and thus sway the agency’s board to vote favorably in May.
So far, questions regarding the Port Authority’s involvement in backing private development have rankled the board, agency observers and the wider public.
Scott Rechler, the Port Authority’s vice chairman and CEO of RXR Realty, led the deal to lift the agency’s backing of the tower’s construction loans from $200 million, an amount set in 2010, to $1.2 billion, Crain’s reported. But Ken Lipper, former deputy mayor to Ed Koch, was appointed to the Port Authority board last year and opposed the deal, pointing to the agency’s transit mandate.
The size of the ownership the Port Authority might receive was not immediately clear, nor was whether Silverstein will agree to granting a stake in the property to the agency. [Crain’s] — Julie Strickland