Vote delayed on loan guarantee for World Trade Center developer

NEW YORK Wed Apr 23, 2014 5:52pm EDT

World Trade Center developer Larry Silverstein speaks at an event to update the public on the pace of development at the site in New York September 7, 2011. REUTERS/Lucas Jackson

World Trade Center developer Larry Silverstein speaks at an event to update the public on the pace of development at the site in New York September 7, 2011.

Credit: Reuters/Lucas Jackson

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NEW YORK (Reuters) - The board of the Port Authority of New York & New Jersey on Wednesday delayed a scheduled vote on whether to provide $1.2 billion in loan guarantees to World Trade Center developer Larry Silverstein, the latest holdup for the project.

The request from Silverstein, who needs Port Authority backing to secure a construction loan for 3 World Trade Center, the complex's next skyscraper, recently became entangled in a debate over the agency's mission after the "Bridgegate" scandal rocked New Jersey Governor Chris Christie's administration.

Wednesday's delay came after the Port Authority's chief of staff told the board he had not yet brokered a good enough deal to recommend approval.

The loan guarantee is meant to be part of an agreement that would provide hundreds of millions of dollars more to the Port Authority and allow it to foreclose on the $2.4 billion tower if Silverstein cannot pay debt service costs.

By not reaching a final deal, an existing 2010 deal with Silverstein remains in place, one that Silverstein has not been able to meet because he has been so far unable to raise the senior debt required to build the tower.

Silverstein has made progress on two of the other four planned towers at the site. The "Freedom Tower" at One World Trade Center is slated to open later this year, and the smaller 4 World Trade Center opened in November.

He has spent about $500 million of insurance proceeds to build the lower eight floors of 3 World Trade Center under the 2010 agreement because some of the below-ground infrastructure there was needed to support a Port Authority transit hub.

In recent days, the Silverstein loan guarantee deal became enmeshed in a fierce debate within the agency over its mission, including whether it should be in the real estate business.

Many of those questions have arisen since the so-called Bridgegate scandal this year, in which operatives loyal to Christie's administration are accused of causing traffic jams on the George Washington Bridge in retribution for a New Jersey mayor not endorsing Christie's reelection.

The controversy has led to scrutiny of Port Authority's operations and the resignation of its deputy executive director and board chairman, both Christie appointees.

Most pertinent to Silverstein, it has led to rare open debate at the authority, and to creation of an internal oversight committee examining operations, governance and political meddling.

Critics argue that rebuilding the World Trade Center, which was devastated on September 11, 2001 in hijacked plane attacks, has taken too much time and energy away from other projects that are critical to its bi-state transportation mission.

(Reporting by Hilary Russ; Writing by Dan Burns; Editing by Richard Chang)

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Comments (13)
TomMariner wrote:
Of course the Democrats and their acolytes in the media don’t care if their made-up issue with traffic cones on two lanes out of 50 for four mornings will cost us all dearly — ANYTHING is fair game to keep a political party in power!

But the funniest is appending the “-gate” to the end of the pretend scandal as we are ignoring 2012 election abuses worse than the original “Watergate” that got a President tossed out and an Attorney General tossed in jail for 19 months.

Apr 23, 2014 6:55am EDT  --  Report as abuse
Bones888 wrote:
More oversight at the Port Authority is a good thing, not a bad thing. But this illustrates the major problem with the USA now; we have become a country paralyzed by inaction, regulations and bureaucracy. Aside from the RPA, there is the LMDC, the governors, both states, the local planning boards, the community boards, the developer, local, state and federal laws, the police, the families of those killed on 9/11 and numerous other entities most of us have never heard of. We have gone from a can-do country to a politically-correct maybe-do country. Contrast this to the building of the Empire State Building, which took a little over a year to build, costing only fives lives (one of which was a person killed on the ground by a truck). One note to add; since the BBC and Reuters are typically left-wing, I think the headline in this article is just another attempt to smear a Republican. By the way, the bridge lanes were never blocked as the article says. Some access lanes coming from Ft. Lee were closed off.

Apr 23, 2014 7:30am EDT  --  Report as abuse
gcf1965 wrote:
Tom, It would be just as big a “scandal” had Christie farted at a fundraising dinner, or if his dog broke a leash and crapped in a neighbor’s yard, or his car broke down and he coasted to the emergency lane. Yet when 4 Americans get killed because of incompetence and trying to save face, it is no big deal and the left seems to theink “who cares” is an adequate answer.

Apr 23, 2014 8:57am EDT  --  Report as abuse
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