The Port Authority of New York & New Jersey has postponed its vote on subsidies for Silverstein Properties‘ 3 World Trade Center until at least next month, according to published reports.
As previously reported, Scott Rechler, the vice chairman of the board of commissioners, is advocating a revised financing deal for the office tower. Under the latest proposal, the Port Authority would guarantee Silverstein Properties a $1.2 billion construction loan. At a meeting on Wednesday, Mr. Rechler explained the proposal to the board’s commissioners, which will vote next month, according to Bloomberg News.
“The board had a whole bunch of information supplied to them today,” Mr. Rechler told Bloomberg. “And it’s appropriate to have them have a chance to reflect on it and digest it.”
Late last year, Larry Silverstein, then the president and chief executive of Silverstein Properties, signed GroupM to a 20-year, 516,000-square-foot lease at 3 World Trade Center. The anchor tenant lease allowed the developer to move forward with construction of the property but with less than 50 percent of the building leased, Mr. Silverstein has struggled to obtain financing for the project.
The proposal to revise Silverstein’s financing deal has its critics among the board of commissioners. Some argue that subsidizing the completion of the tower is less vital given the already fierce competition for tenants in lower Manhattan. The Port Authority’s own 1 World Trade Center development has over 1 million square feet of vacancy.
“The idea of giving a $1.2 billion subsidy to a private developer at a time when the market downtown is in a state of glut defies the public interest and the economic interest,” Kenneth Lipper, a Port Authority Commissioner, told The New York Times earlier this week. “It would turn a patriotic gesture into a vanity project. And it could jeopardize our mission, which is to improve the transportation system in the region.”