The Port Authority of New York and New Jersey is negotiating a deal with developer Larry Silverstein to cut the transportation infrastructure operator's risk and increase its potential gain from the construction of Three World Trade Center.
In addition to discussing a more favorable deal with Silverstein, the authority is looking into bringing private capital into the deal, vice chairman Scott Rechler told the board Wednesday.
In the last few months members of the board have said they were opposed to providing a proposed $1.2 billion loan guarantee to allow Silverstein Properties to proceed with plans for Three World Trade Center.
At April's meeting the members expressed concern that the potential of default by the developer could undermine the finances of the authority, which has $19 billion in bonds outstanding, according to Standard & Poor's. That total doesn't include $1.2 billion in Liberty revenue bonds issued to finance Silverstein's Four World Trade Center.
Commissioner Richard Bagger said the deal under development was "quite encouraging."
Commissioner Kenneth Lipper said he wanted the authority's bonding capacity to be held for transportation infrastructure if it goes ahead with supporting the building of Three World Trade Center. The board generally approves of this principal, he said.
The authority is still negotiating with Silverstein and no vote on the topic was taken on Wednesday.
The authority's One World Trade Center building is only half full with tenants, said Richard Hughes, co-founder of the Twin Towers Alliance. Hughes asked why the authority should financially support the construction of a building that would compete for tenants.
In other authority news, Rechler said that it hadn't had a special oversight committee meeting on Wednesday. These meetings had been set to address problems that critics had identified in the aftermath of the closing of driving lanes on George Washington Bridge in September, which triggered the so-called Bridgegate political payback scandal.
Early in May New York and New Jersey's governors set up a panel to suggest changes at the authority. Rechler said the oversight committee delayed the meeting in order to give the panel time to do its work.
Rechler said the authority would share the advice and testimony given to the oversight committee to the governors' panel.
The panel is being given 60 days to come up with suggestions.
