The final federal hurdle -Internal Revenue Service approval -- has been cleared in securing recovery zone bonds for financing the complete construction of the 80-story 3 World Trade Center in downtown Manhattan, U.S. Senator Charles Schumer announced. Schumer, in a statement Monday afternoon, said special IRS clarification was needed to indicate use of the bonds for this building, because the project - undertaken after the Sept. 11, 2001, terrorist attacks -- has taken years to unfold and the original deadline for their use had passed after 2010.
"Without the guidance these bonds would not be accessible, leaving a $340 million gap in the financing and threatening to delay or, worse, stop the project completely," Schumer said.
The IRS was initially unsure whether it would issue guidance for these bonds. As a result, Schumer took his case directly to Treasury Secretary Jack Lew, to make sure New York didn't lose the federal resources. Otherwise, legislative remedy would have been necessary, which Schumer called "a complex and uncertain process."
Schumer called the IRS guidance "a vital piece of the financing for 3WTC, and will allow the building to be constructed to its full 80-story height."
The recovery zone program was established as part of the 2009 American Recovery and Reinvestment Act to spur major development projects, notably surrounding Ground Zero. 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.
New York State issued the bonds but they were held until financing became available.
"Now that an anchor tenant has been signed and the Port Authority [of New York and New Jersey] and developer, Silverstein Properties, are structuring the financing, the bonds need to be reissued, and that is what the guidance today allows,' Schumer said.
