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Old June 24th, 2014, 11:42 PM   #4121
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Bottom line is tomorrow, we NEED (desperately) for the Port Authority to allow Silverstien to take his OWN $150 million and put it to use or, this building (not to mention 2 and 5 WTC) will remain an 8 story tall "podium".
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Old June 24th, 2014, 11:52 PM   #4122
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Silverstein Said to Seek Private Funding on 3 World Trade
http://www.businessweek.com/news/201...-3-world-trade



Quote:
Developer Larry Silverstein will seek private funding for the construction of lower Manhattan’s 3 World Trade Center as the Port Authority of New York and New Jersey backs away from providing a loan guarantee, a person with knowledge of his plans said.

Silverstein will take the next two to three months to work on a financing package, said the person, who asked not to be identified because nothing is official. The Port Authority, which owns the Trade Center site, is set to affirm its support tomorrow for a 2010 agreement on the project that doesn’t include the $1.2 billion backstop the developer sought, three people with knowledge of the board’s intentions said.

Silverstein now must turn to private investors as he seeks to keep 3 World Trade Center’s anchor tenant, the advertising firm GroupM, which has a June 30 opt-out clause in the lease it signed in December. He is altering his plans after about a year of negotiations with the Port Authority for financing for the 80-story tower, which is stalled at eight floors. The board balked at providing the loan guarantee after some members viewed it as too risky and a threat to the agency’s credit rating.

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“It’s not the public who should pay for this,” authority Commissioner Kenneth Lipper, who led opposition to the loan guarantee, said yesterday in a telephone interview. “I believe the financing will be available in the private markets.”

GroupM agreed to rent about 20 percent of the building’s planned 2.5 million square feet (230,000 square meters). Under a provision in the lease, Silverstein can pay the firm to stay committed to the project beyond the end of the month, the person with knowledge of the developer’s plans said.

Financing Options

It’s not yet clear how Silverstein will structure the financing, nor who the investors might be, the person said. Martin Burger, chief executive officer of Silverstein Properties Inc., is leading the financing negotiations, the person said.

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Christopher Valens, a Port Authority spokesman, declined to comment, as did Bud Perrone, a spokesman for Silverstein Properties. A call and an e-mail to Stuart Diamond, chief financial officer at GroupM, weren’t immediately returned.

Last month, Port Authority Vice Chairman Scott Rechler said several options were under consideration, including reinsurance, equity partners and preferred debt, in combination with tax-advantaged Liberty Bonds. He said he was confident that a public-private partnership could be formed to build the skyscraper, and that there was enough leasing momentum in lower Manhattan to mitigate the risk.

Reached by phone today, Rechler said he intends to comment on the status of the project at tomorrow’s meeting.

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Insurance Proceeds

The 2010 agreement will be adjusted to allow Silverstein to use about $150 million of insurance proceeds left over from the $4.6 billion payout from the Sept. 11, 2001, terrorist attack, according to the people familiar. Silverstein had signed a 99-year lease for the original twin towers six weeks before they were destroyed.

The four-year-old deal on 3 World Trade Center called for about $600 million of cash support, split about equally between the Port Authority, New York City and New York State. To qualify for those funds, Silverstein would have had to raise $300 million of equity or high-interest mezzanine debt, and pre-lease at least 400,000 square feet. The agreement also required him to raise $1.3 billion of Liberty Bonds to finance the $2.3 billion tower.


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Last edited by Vertical_Gotham; June 25th, 2014 at 12:01 AM.
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Old June 25th, 2014, 05:17 AM   #4123
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I'm not surprised that this is still far from restarting. Larry and the PA have been fighting like mad chicken over this for years. The PA should have told Larry from the beginning "Look, pal, 1WTC is ours, the other towers are your, do with them whatever you want and don't expect anything from us." At least he could have been focusing to get purely private funding from the start. Itps better to know you are on your own than being in an illusion that somebody will help you
Mr. Silverstein will get it done, if anyone can, it's HE! Don't underestimate 'the Larry'.
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Old June 25th, 2014, 05:56 AM   #4124
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Mr. Silverstein will get it done, if anyone can, it's HE! Don't underestimate 'the Larry'.
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Old June 25th, 2014, 06:22 AM   #4125
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LIVING LIKE LARRY
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Old June 25th, 2014, 10:08 AM   #4126
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At 83 the clock is ticking for Larry and hopefully with the passing of the allowance for him to use the 150 mil insurance proceeds expected at today's meeting more private investment will come on board and the Group M deal will be saved. Hopefully by September sometime we'll finally get resumption upward and soaring to the supertall skies!
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Old June 25th, 2014, 04:51 PM   #4127
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Once Larry gets his insurance proceeds, I have no doubt this will get a private funder relatively soon.
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Old June 25th, 2014, 09:47 PM   #4128
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Silverstein Properties to Seek Private Funding for 3 WTC After NY/NJ Port Authority Rejects Loan Guarantees

Quote:
Now that the Port Authority of New York and New Jersey has decided not to provide Silverstein Properties with public loan guarantees for the new 3 World Trade Center, the firm is planning on seeking private investments for the project.
The new 80 story tower will cost $2.3 billion to construct and will replace the one destroyed in the September 11, 2001 attacks.
The Port Authority owns the property where the World Trade Center is located.
Its commissioner, Kenneth Lipper, told Bloomberg, “It’s not the public who should pay for this. I believe the financing will be available in the private markets.” Lipper opposed the loan guarantees.
A Loan guarantee, however, does not mean that public funds are used to finance a project. Just that the body which issues the guarantee obligates itself to cover a loan in case of a default. But the Port Authority sees it as a risky venture and a threat to the agency’s credit rating.
Silverstein is now expected to take the next 90 days to put together a new financing plan for the project.
[...]
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Old June 25th, 2014, 09:54 PM   #4129
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They should let the Chinese take over the entire project, they'll finish both towers in a year.
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Old June 25th, 2014, 10:00 PM   #4130
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I saw this article around noon time and did not think anything of it cuz I did not think the board would make a decision that early in the day.

David Levitt from Bloomberg just tweeted moments ago the following:

#PANYNJ makes it official, approves deal with #Silverstein on #3WTC with no loan backstop. Rechler says #GroupM still aboard. #NYC #CRE #WTC

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Last edited by Vertical_Gotham; June 25th, 2014 at 10:10 PM.
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Old June 25th, 2014, 10:10 PM   #4131
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Thank God GroupM is still commited.
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Old June 25th, 2014, 10:17 PM   #4132
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More:

Port Authority votes to free up $150M for Siliverstein’s 3 WTC

Deal will allow developer to finance construction, convince GroupM to stay put

http://therealdeal.com/blog/2014/06/...rsteins-3-wtc/

Quote:
The Port Authority of New York and New Jersey voted today to free up roughly $150 million of insurance money paid on the original World Trade Center complex, in a move that will allow Larry Silverstein to finance the construction of 3 World Trade Center.

RXR Realty head and Port Authority vice-chairman Scott Rechler proposed the transfer of the insurance money, as Crain’s first reported, after talks on whether or not to grant Silverstein a $1.2 billion subsidy for the tower broke down. The money, which was won by Silverstein from the World Trade Center’s insurers, is currently held in a reserve fund.

“I appreciate the leadership of Port Authority vice chairman Scott Rechler and other members of the board who have partnered with us to fulfill the vision we all share – a fully rebuilt World Trade Center at the heart of a vibrant new Downtown,” Silverstein said in a statement. “Today’s action permits us to immediately jumpstart vertical construction, employ 3,000 construction workers and stay on target for an early 2018 completion.”

The 2.5 million-square-foot, $2.4 billion tower currently stands eight stories tall, but is slated to rise to be 80 stories tall. Media company GroupM is the building’s anchor tenant, but has the right to cancel its 516,000-square-foot lease after June 30. The insurance funds deal could help persuade GroupM to stay put at the tower, sources said.

As part of the concession to the Port Authority, Silverstein Properties agreed to take back two floors, or about 80,000 square feet, that they leased to the agency at neighboring 4 World Trade Center. The agency’s current commitment at 4 WTC is 600,000 square feet, and it has been looking for a tenant to sublease about 150,000 square feet of that space
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Old June 25th, 2014, 10:20 PM   #4133
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So they don't need more funding to go vertical?
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Old June 25th, 2014, 10:21 PM   #4134
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Quote:
Originally Posted by Vertical_Gotham View Post
I saw this article around noon time and did not think anything of it cuz I did not think the board would make a decision that early in the day.

David Levitt from Bloomberg just tweeted moments ago the following:

#PANYNJ makes it official, approves deal with #Silverstein on #3WTC with no loan backstop. Rechler says #GroupM still aboard. #NYC #CRE #WTC

just another case of a news media company jumping the gun i suppose.

anyway,

Port Authority votes to free up $150M for Siliverstein’s 3 WTC
http://therealdeal.com/blog/2014/06/...Estate+News%29

Quote:
[...]
As part of the concession to the Port Authority, Silverstein Properties agreed to take back two floors, or about 80,000 square feet, that they leased to the agency at neighboring 4 World Trade Center. The agency’s current commitment at 4 WTC is 600,000 square feet, but it has been looking for a tenant to sublease about 150,000 square feet of that space.
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Old June 25th, 2014, 10:25 PM   #4135
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So they don't need more funding to go vertical?
No. They're basically getting $150 million in cash (part of the insurance settlement from years back). Silverstein still needs to find a construction loan and/or investors to help finance the rest of construction.
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Old June 25th, 2014, 10:27 PM   #4136
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In the next 90 days, Silverstein will be looking for private investors so he may get all the funding needed. The 150 million is essentially a "bribe" to get GroupM to stay on board.

After he finds the investor, this tower is ready to go!
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Old June 25th, 2014, 11:21 PM   #4137
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PA approves plans to help finance the construction of 3 WTC.



Finally, 3 WTC looks good to go
After several failed attempts to obtain needed funding for the 80-story tower, developer Silverstein Partners gets green light from the Port Authority of New York & New Jersey to tap $159 billion in insurance proceeds, as two banks express confidence that the rest can be raised in the bond market.

http://www.crainsnewyork.com/article...oks-good-to-go

Quote:
The Port Authority of New York and New Jersey's board unanimously approved a plan to help finance the construction of 3 World Trade Center by tapping $159 million in insurance proceeds from the Sept. 11 attacks.

The Port Authority's executive director, Pat Foye, the agency's top New York staff member, said the money would allow construction on the 80-story, 2.5 million-square-foot tower to proceed as the building's developer, Silverstein Properties, raises the remaining $1.2 billion necessary to build the over $2 billion spire.

Mr. Foye said that Silverstein Properties would be able to borrow the $1.2 billion through the municipal bond market. He revealed that Goldman Sachs and J.P. Morgan Chase, which are acting as advisers to Silverstein Properties, had expressed confidence that such a debt offering for the tower would be successful. Mr. Foye's statements were the most optimistic yet that funding for 3 World Trade Center's costly construction could be secured privately after the Port Authority declined to use its balance sheet to back the building a little over a month ago.

"The municipal bond markets have improved," Mr. Foye said. "These improved conditions set the backdrop... [and] will allow them to move forward with the private financing."

Mr. Foye also said that interest has picked up in real estate investment in lower Manhattan as the leasing market there has improved.

"Leasing activity in May was more than double the five-year monthly average," Mr. Foye said.

Silverstein Properties will now try to borrow the money for the tower by issuing Liberty Bonds. Those bonds will potentially allow Silverstein Properties a lower borrowing cost because they offer tax-free proceeds to the investors who buy them—and who can therefore accept a lower interest rate.

The $159 million is part of $4.5 billion of insurance money that was collected by Silverstein Properties as compensation for the 9/11 terrorist attacks that destroyed the World Trade Center site. The $159 million originally had been slated for the construction of 2 World Trade Center, an as-yet unbuilt tower at the site.

They were transferred to 3 World Trade Center as part of a 2010 agreement between Silverstein Properties and the Port Authority, and were to be used as contingency funds for cost overruns on the construction of the tower.

Mr. Foye however said that the risk for cost overruns had largely passed since the building's trickiest sections—its below-grade space and its lower, above-ground floors—have already been completed on budget.

The release of the $159 million requires Silverstein Properties to use $80 million of a $390million package of guarantees from the Port Authority, the city and the state that was arranged in 2010 to now be used to cover overruns at the site. Fully $50 million of the $159 million will be released immediately, while the remaining $109 million will be given to Silverstein Properties once it successfully raises the municipal financing.

Getting the tower up sooner will benefit the Port Authority by accelerating the rental payments that Silverstein Properties must pay at the site and also allow the Port Authority to sell the building's valuable retail space for $230 million to Westfield, the real estate operator that bought the World Trade Center site's retail space for, paying over $1 billion.

Though the $159 million will only allow construction to continue temporarily without the bigger municipal funding package, it is being treated by both Silverstein Properties and the Port Authority as a way to demonstrate progress to GroupM, the media company that has agreed to become the tower's anchor tenant by leasing 515,000 square feet. GroupM has the right to cancel its lease beginning in July, but is expected to remain committed to the lease if it appears that a financing package for the building can be put together.
"We remain confident that we will nail down a construction financing package that will allow us to complete the project and create an ideal environment for GroupM employees, and other dynamic, creative companies who are making their home at the new World Trade Center," Larry Silverstein, the chairman of Silverstein Properties, said in a statement.
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Old June 25th, 2014, 11:32 PM   #4138
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So I'm confused...Silverstein says he can now start immediate vertical construction with this money. Should we expect to see that happening with the weeks ahead? This doesn't add up since they need 1.2 billion to finish it.
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Old June 25th, 2014, 11:33 PM   #4139
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According to the article, it seems like he COULD use that money to resume for now while he works out a deal with a private investor to keep GroupM aboard. I don't know though.

EDIT: I'll just keep a close eye on the webcam for activity
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Old June 25th, 2014, 11:35 PM   #4140
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According to the article, it seems like he COULD use that money to resume for now while he works out a deal with a private investor to keep GroupM aboard. I don't know though.
[B]"Silverstein said in a statement. 'Today’s action permits us to immediately jumpstart vertical construction, employ 3,000 construction workers and stay on target for an early 2018 completion.'"

He does say he will start going vertical now, so I'm not sure.
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