US developer Larry Silverstein is seeking up to $1.6bn in financing to complete 3 World Trade Center, now that an agreement brings new life to the stalled tower. After months of talks, Silverstein and The Port Authority of New York and New Jersey reached an agreement that frees up $159m
in insurance proceeds to resume construction on the tower in the new World Trade Center complex in downtown Manhattan.
“[The agreement] permits us to jumpstart vertical construction, employ 3,000 construction workers and stay on target for an early 2018 completion,” Silverstein said. Tweaks to an existing 2010 agreement allow Silverstein to use the $159m of remaining cash from a $4.6bn insurance payout from the 9/11 attacks and $50m of that can be used to resume construction. Development stalled at around eight (of 80) storeys in the face of slow leasing.
However, because the new agreement does not include a $1.2bn Port Authority loan guarantee Silverstein had pushed for, he aims to raise $300m in mezzanine debt and/or private equity and $1.2bn to $1.3bn of senior fixed-rate bonds. “We remain confident that we will nail down a
construction financing package that will allow us to complete the project,” he said.
Silverstein Properties CEO Martin Burger will lead the search for financing. Critics within the Port Authority cited slow leasing at the tower as cause for concern; the building is 20% pre-let. Sources said Silverstein may need to solidify financing quickly to keep the stalled site’s anchor tenant, GroupM, on board. The advertising company agreed to take 515,000 sq ft in December for more than $75/sq ft, but it reportedly had a clause built into its lease allowing it to opt out by 30 June.