NEW YORK, Oct 29 (Reuters) - New York State’s main economic arm will sell as much as $1.7 billion of debt during the week of November 16, although bond financing for two other developments — Brooklyn’s Atlantic Yards and the World Trade Center site — have not yet been finalized.
Frances Walton, chief financial officer of the Empire State Development Corporation, told reporters after a Citizens Budget Commission conference that she did not expect lawsuits filed by opponents of the multibillion dollar Atlantic Yards project would block the debt issue by a local development corporation.
“The expectation is that they will be issued,” she said. This would not be first time that bonds have been issued despite “legal challenges,” Walton said.
“We have begun discussions with ratings agencies,” she said.
New York’s top court is expected to rule in November or December on a lawsuit that seeks to block the massive residential-office complex that includes an arena for the Nets basketball team.
For details on the case, which could redefine the state’s right to seize private land for public use, and other lawsuits that aim to halt the project, please see: [ID:nN14252251] and [ID:nN19242937].
Developer Forest City Ratner FCEa.N is relying on $700 million of tax-free bonds to help pay for the Atlantic Yards development.
But the authority to issue the debt expires on December 31, the same deadline for New York entities to issue about $2.6 billion of Liberty Bonds for World Trade Center Developer Larry Silverstein’s projects.
The Liberty Bonds were approved by Congress as part of a bailout package after the September 11, 2001 air attacks.
About $700 million of Liberty Bonds would be issued for the Port Authority of New York and New Jersey, Walton said.
That is the lead agency rebuilding the World Trade Center, which has been plagued by soaring costs and lengthy delays.
The Liberty Bond program already won one extension from the federal government.
“I think there is some sensitivity about extending it again,” Walton said.
The Empire State Development Corporation’s mid-November offering will include traditional taxable debt, tax-free issues and approximately $400 million of taxable Build America Bonds, Walton said.
Goldman Sachs was selected as the book-running senior manager and the bonds will be backed by revenues from the state personal income tax.
The development agency is weighing how best to help municipalities use economic recovery bonds, one of the stimulus measures Congress created in its nearly $800 billion plan, Walton said.
New York City appears to be ahead of other cities and towns in the planning process for this new kind of debt, she said. A city spokesman was not immediately available.
Reporting by Joan Gralla; editing by Diane Craft