New Yorks Convention Center Development Corp. could be in the market as early as the first quarter of next year with a sale of bonds to raise $350 million of new money to help fund the $1.4 billion expansion of the Jacob Javits Convention Center.
Gov. George Pataki yesterday signed legislation authorizing the publicly financed Javits expansion on Manhattans far West Side to proceed. The state Senate passed the legislation on Monday and the Assembly passed the original version of it in July.
The Pataki administration provided a brief outline of the financing plan after the bill-signing ceremony yesterday at the Javits center, which was originally built about 20 years ago and is said to be too small to compete for many of the larger conventions held in the U.S.
The corporation would first refinance $268 million of outstanding Triborough Bridge & Tunnel Authority debt sold to construct the existing convention center, stretching out the maturity of the state-backed bonds in order to generate $350 million.
The TBTA bonds have already been advance refunded so the state would use some of the $9 billion of additional advance refunding authorization that the federal government granted to the state and New York City in aid to rebuild after the Sept. 11, 2001, terrorist attacks. The additional advance refunding authorization was set to expire on Dec. 31. In October Congress extended the remaining authorization for one year.
The corporation would later raise another $500 million by selling bonds backed with revenues from a new $1.50 per room hotel surcharge in New York City and enhanced with the credit of the states highly rated mortgage insurance fund.
The new hotel surcharge, which was authorized as part of the Javits expansion law, takes effect next April.
The board of the Empire State Development Corp., which controls the new Convention Center Development Corp., in April selected Merrill Lynch & Co., Morgan Stanley, and UBS Financial Services Inc. as senior bankers for Javits bonding and Hawkins Delafield & Wood as bond counsel.
The new corporation would also serve as a conduit for the construction of a $200 million hotel at the Javits center.
The final $350 million of public financing for the $1.4 billion project would come from New York City. Mayor Michael Bloomberg last spring proposed raising the money by selling bonds backed with revenues from the Battery Park City Authority, which was opposed by Assembly leaders and prohibited in the final version of the Javits law.
Dan Doctoroff, New York Citys deputy mayor for economic development, said yesterday that the city, as an alternative to Battery Park City money, has a series of PILOT payments, user fees, and other things we can use as collateral for a bond issuance that would pay for it. He said that such a bond issue would be done by an entity that would be outside of the citys regular capital plan.
The final version of the law signed yesterday also seeks to prevent the Javits expansion from advancing the construction of a new football stadium for the New York Jets, which would be connected to the convention center. Pataki and Bloomberg have proposed $600 million of direct public subsidies to build the controversial $1.4 billion stadium.
