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Backing Silverstein’s 3 WTC is the road less risky: OPINION
Op-ed says Port Authority "poised to realize big benefits" by providing funds for stalled tower
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