In what has become an annual ritual, New York officials Tuesday touted progress in the reconstruction work at the World Trade Center site. This year, progress can be seen reaching for the sky as the steel on the signature building, 1 World Trade Center, has reached the 36th floor.
Redevelopment at the site is the largest single item in the Port Authority of New York and New Jersey’s 2010 capital program. Out of a $3.41 billion capital plan, the agency plans to spend $1.6 billion on the site this year.
“We took on a project that by virtually everyone’s estimation would be extremely difficult, and they were right,” Port Authority chairman Anthony Coscia said at a news conference in 7 World Trade Center. “We saw our mission in Lower Manhattan as something we could never turn our back on and we stuck with it.”
The authority projects the tower will open in 2013. Publisher Conde Nast has agreed to lease one million of the tower’s 2.6 million square feet.
Last month, the Port Authority announced an agreement with developer Silverstein Properties to provide public support for the development of two towers. The bi-state agency owns the site and leases the tower sites to Silverstein.
Silverstein would develop a third tower in the future if there is sufficient market demand.
The agreement cleared the way for the refunding of $2.59 billion of escrowed Liberty bonds, which is expected to take place later this month.
The Liberty Development Corp. will refund $1.36 billion of bonds to provide the bulk of the financing for the two-million-square-foot 4 World Trade Center, which is currently under construction and has reached the seventh floor.
The bonds will be refunded as fixed-rate 40-year bonds with a 10-year call. The remaining bonds will continue in escrow to be used for 3 World Trade Center once Silverstein has hit certain pre-leasing and financing commitments.
Congress created the Liberty bond program following the terrorist attacks of Sept. 11, 2001, to help revitalize Lower Manhattan with an $8 billion allocation of private-activity bonds.
The authority will act as a limited guarantor on the 4 World Trade Center bonds.
Silverstein president and chief operating officer Larry Silverstein said the company would have construction commitments totaling $3 billion by the spring to build three towers, including 2 World Trade Center, which would not use Liberty bond financing.
The authority’s support of Silverstein’s towers has not affected its credit rating, according to Fitch Ratings analyst Vanessa Roy.
“The level of support the Port Authority is giving the project is not adverse to their rating,” Roy said.
Fitch most recently reviewed the authority’s rating in July and rates their senior-lien debt AA-minus.
Though the redevelopment work at the site makes up a large portion of their capital program, it’s a small part of their operating costs.
The majority of the authority’s revenue comes from the airports, bridges, and tunnels it operates.
Last year the Port Authority cut its 2007-2016 capital plan by $5 billion to $24.5 billion, but did not reduce spending at the World Trade Center site.
A 9/11 Memorial and Museum is scheduled to open in 2011, on the 10th anniversary of the attacks.
The outlines of the memorial, which includes waterfalls in the footprints of the original towers, is now clearly visible at the site.