Terrorism insurance renewal looms over city commercial real estate market
New York City’s commercial real estate industry is edgy over the possibility of the government yanking what has come to be known as terrorism insurance, the New York Post reported.
The program, called the Terrorism Risk Insurance Act, comes up for renewal next year; if Congress does not extend it, the cost of doing business will increase for owners of iconic properties — their insurance premiums will rise and their buildings will drop in value.
Rep. Michael Grimm, a Republican from Staten Island, has introduced a bill seeking a five-year extension of the program and has the city’s real estate industry lobbying for the measure.
“We are moving as quickly as we can, and hopefully we will have the first hearing before summer,” he told the Post.
There are signs, though, that Congress won’t go for any extension — let alone an early one.
“President Obama called for changes in the program that would have had the effect of scaling back the coverage for terrorist attacks,” reads an April report filed by the Congressional Research Service.
And, according to Fitch Ratings, there’s chance for “a tough legislative battle that will directly influence the future cost and availability of insurance coverage, particularly in large urban areas.”
Nonetheless, Silverstein Properties, which has large presence at the World Trade Center site, is optimistic, a company spokesman told the Post.
“We have secured terrorism insurance for all our buildings through the construction period and are confident it will be available when we open each building,” he told the paper. [NYP] —Zachary Kussin