http://www.nytimes.com/2009/07/10/ny...l?ref=nyregion
Plan Offered to Finance Trade Center
By CHARLES V. BAGLI
July 9, 2009
The Port Authority of New York and New Jersey made a proposal this week that it said could break the long impasse at ground zero and allow the developer Larry A. Silverstein to build two skyscrapers on the 16-acre site, providing he can raise $625 million.
But it does not appear that the proposal will lead to an immediate cessation of hostilities between the two sides or of the acrimony between the authority and Mayor Michael R. Bloomberg, who is concerned that the dispute could eventually halt work on the World Trade Center site.
For the first time, the authority, which owns the site, agreed to guarantee financing for both of Mr. Silverstein’s office towers, which are to be built along Church Street, at an estimated cost of $4.2 billion, according to a letter on Monday from the Port Authority to the Bloomberg administration and the office of Assembly Speaker Sheldon Silver.
But up to $1.2 billion in financing for the second tower would come only after Mr. Silverstein raised $625 million from investors or lenders, according to the proposal.
The letter, from Christopher O. Ward, the authority’s executive director, was sent to City Hall on the same day that Mr. Silverstein sought to start an arbitration process, angrily claiming that the Port Authority had violated the development agreement at ground zero.
A spokesman for Mr. Silverstein declined to comment on Thursday. He does not view the proposal as a credible offer, according to an official who spoke with him
“I don’t believe it moves the ball forward,” said Mr. Silver, whose district includes Lower Manhattan. “I don’t believe it gets us closer to a deal.”
Mr. Silver, a consistent supporter of Mr. Silverstein, and Mayor Bloomberg organized a summit meeting in May in a so-far unsuccessful effort to broker a resolution.
Andrew Brent, a spokesman for Deputy Mayor Robert C. Lieber, who leads the city’s negotiating team, declined to comment on the proposal, citing an agreement among the parties not to negotiate in public. But two officials who had been briefed on the new proposal said that it was a step in the right direction, although they noted what they called some serious flaws.
One flaw, one of the officials said, is that the financial structure would make it nearly impossible for Mr. Silverstein to raise $625 million in the credit markets, where there is little money available for real estate projects.
The official said he hoped that the authority would be “flexible.”
The authority has been reluctant to finance more speculative office space at a time when rents are down and tenants scarce.
Under a 2006 development agreement, Mr. Silverstein was to finance the towers with insurance money, tax-free bonds and private borrowing.
Stephen Sigmund, a spokesman for the authority, declined to discuss the proposal in detail, but said: “We have said all along that we will protect our limited public resources for the public projects on the site and the other vital transportation needs of the region.”
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