The Liberty Development Corp. plans to market $2.59 billion of tax-exempt Liberty Bonds before Christmas for development at the World Trade Center site in order to meet a year-end deadline.

The bonds will be sold to partially finance construction of three office towers with 6.2 million square feet of office space that Silverstein Properties Inc. plans to build on the site.

Due to delays and legal wrangling at the site, the bond proceeds will be put into escrow because the proceeds can’t be used right away for construction.

Following the Sept. 11, 2001, terrorist attacks, Congress created the Liberty Bond program, which authorized $8 billion of private-activity bonds to revitalize Lower Manhattan. The program, which was extended once before, expires on Dec. 31. New York City and New York State officials have sought an extension of the program through Congress, but with no guarantee that an extension would happen, the LDC, which is a subsidiary of the Empire State Development Corp., decided to meet the deadline.

The bonds will be marketed in two tranches, Series 2009A and 2009B. Series 2009A will amount to $2.581 billion and 2009B will be $12.5 million. Those amounts are subject to change and the final maturity is expected to be 2049. Proceeds will be invested in short-term Treasuries, the LDC said.

The Series 2009A bonds will be subject to mandatory redemption on Dec. 1, 2010. The Series 2009B bonds will be sold to pay capitalized interest costs on the 2009A bonds if the bonds are redeemed.

The LDC plans to market the bonds the week of either Dec. 14 or Dec. 21. The bonds are still subject to a public hearing and require approval from Gov. David Paterson and Mayor Michael Bloomberg, which is expected.

Goldman, Sachs & Co. is underwriter. Winston & Strawn LLP is bond counsel.

Silverstein, which holds a lease to the site, is in arbitration proceedings with the Port Authority of New York and New Jersey, the site’s owner. The developer has sought greater public financial support for the office towers due to the delays at the site and the economic downturn, but the Port Authority and Paterson were unwilling to give Larry Silverstein, the company’s owner, everything he wanted. Closing arguments in the arbitration are scheduled for this month.

The Port Authority was allocated $700 million of Liberty Bonds to be issued by the New York City Industrial Development Agency for the development of the Freedom Tower, but it is unlikely that those bonds will be issued by the end of the year.

Spokesman Steve Coleman said the authority wants to get an extension on the Liberty Bonds and would not comment on the “hypothetical situation” of issuing the bonds before the end of the year.

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