NY agency sets Dec. 3 hearing for WTC Liberty bonds

NEW YORK Nov 19 (Reuters) - A New York state agency has scheduled a public hearing for Dec. 3 on the issuance of up to about $2.6 billion of Liberty bonds to rebuild the World Trade Center, a civic group called Good Jobs New York said on Thursday.

Holding the public hearing, which is required, is a step toward ensuring that the New York Liberty Development Corporation, an arm of the Empire State Development Corp., will be able to issue the bonds -- if Congress lets this bond program expire this year. The hearing date is two weeks away.

Liberty bonds were part of the $21 billion of funding that Congress approved to help New York City get back on its feet after nearly 3,000 people died when the World Trade Center was destroyed in the Sept. 11, 2001, attacks.

The rebuilding of the World Trade Center, which had been a landmark in lower Manhattan and an iconic part of the New York City skyline since the early 1970s, is running years behind schedule and hundreds of millions of dollars over budget.

Congress has already extended the Liberty bond program once.

Developer Larry Silverstein and the Port Authority of New York and New Jersey, which is the agency taking the lead on the World Trade Center's reconstruction, are now trying to settle their clash over financing, site preparations and other matters in arbitration.

Issuers typically do not tap the debt market until the funds are needed.

The Port Authority, which also has the ability to issue Liberty bonds for Silverstein, has adopted a different strategy than the New York state agency. A Port Authority spokesman said it was working to get another federal extension of the Liberty bond program and had no plans to issue any more debt this year.

Officials with the city and state agencies had no comment.

On Thursday, the Port Authority's board approved the issuance of $1 billion of bonds via a Citigroup (C.N) syndicate in 2010 that could help pay for various World Trade Center projects, including infrastructure.

The Empire State Development Corp. has also scheduled a hearing on Nov. 24, which is this coming Tuesday, for another bond sale that must take place this year: an approximately $700 million offering for Forest City Ratner's (FCEa.N) $4 billion Atlantic Yard's project in Brooklyn.

For more details on the project, please see: [ID:nN16522450]. (Reporting by Joan Gralla; Editing by Jan Paschal)