NEW YORK CITY-US Senator Charles Schumer has announced that the final federal hurdle has been cleared in securing Recovery Zone bonds that will go toward financing the complete construction of 3 World Trade Center.
The hurdle, according to Schumer's office, was the Internal Revenue Service's issuing the necessary guidance indicating that the bonds could be used for this building. Because the project has taken a number of years to unfold, special clarifications were required to assure that bonds were going to be usable since the original deadline for their use had passed after 2010. The guidance allows the bonds to be used despite the delay.
The IRS was initially unsure whether they would issue guidance for these bonds. As a result, Schumer went directly to Treasury Secretary Jack Lew to explain that IRS notification was necessary in order to prevent the loss of these federal funds.
“In the wake of the September 11th attacks, many predicted downtown would be a permanent ghost town, and so significant federal investment was made to bring people back,” says Schumer. “We fought hard to deliver those funds, including this program, and now downtown is thriving, more than anyone ever expected with jobs, new buildings, new transit hubs, families and cultural centers. The completion of 3WTC will be a major piece of that puzzle.”
The Recovery Zone program was established as part of the 2009 American Recovery and Reinvestment Act in order to spur major development projects around the country and particularly in the area surrounding Ground Zero. ARRA authorized this new category of tax-exempt bonds, which may be used by private entities in designated “recovery zones” for a wide range of capital projects—including office buildings, industrial facilities or retail complexes. The bonds were intended to be issued by the end of 2010, but due to the ongoing recession and the complexity of the World Trade Center project, it has taken longer than projected to secure an anchor tenant for 3 WTC and the necessary private funding for the project. The bonds were issued by New York State but held until financing became available. Now that an anchor tenant has been signed and the Port Authority of New York and New Jersey—as well as developer Silverstein Properties, are structuring the financing, the bonds need to be reissued, and that is what the guidance today allows.
In response to the announcement, a spokesman for Silverstein says,
“The recovery zone bonds, which were initially allocated to the World Trade Center in 2009, are an important component in the financing plan for 3 World Trade Center. We are grateful to Senator Schumer for his longstanding support of the World Trade Center, and for assistance in assuring that these bonds could be used for their intended purpose – the reconstruction and revitalization of Downtown Manhattan.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
