Ground Zero’s Latest Problem? A Manic Muni Market
The redevelopment of the World Trade Center site was delayed for years after 9/11, due in large part to in-fighting amongst the project’s numerous constituencies. Yet despite considerable progress over the past year, a corner of the project could hit a snag due to issues well outside the 16-acre site.
Larry Silverstein is preparing to issue a considerable $1.3 billion bond package to finance the continued construction of 4 World Trade Center, the 64-story office tower at the site’s southeast corner. It is the only one of his three towers–he no longer controls 1 World Trade Center–that has a firm completion date, with a scheduled opening of 2013.
Now, because of uncertainty in the municipal bond markets, Silverstein Properties and the Port Authority are delaying their bond issuance, according to The Journal:
“Silverstein Properties and the Port Authority have elected to temporarily delay pricing of the Liberty Bonds,” the developer’s statement said. “It is better to wait until the bond market has stabilized to the point that our Liberty Bonds could be priced based on the strength of our project and the high credit ratings it has received, rather than on the external factors now roiling the markets.”
This delay is not expected to have an impact on the tower’s completion. But if there are delays, that could present some problems.
The World Trade Center has all but defied a recession that has hobbled real estate development, especially office construction. This is in large part thanks to outsized public support and subsidy for Ground Zero. Yet should the project falter once again, it will not only be bad news for Silverstein and the Port but the construction and real estate industries as a whole, given that this about the only game in town now and for the forseeable future.