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July 12, 2006
A Pot of Tax-Free Bonds for Post-9/11 Projects Is Empty
The NY Times
By Terry Pristin
A milestone was reached yesterday in the federal Liberty Bonds program, which was created to help Lower Manhattan and the New York economy recover from the Sept. 11 terrorist attacks by giving developers access to billions of dollars in low-cost tax-exempt financing.
Once officials issue the bonds that were earmarked yesterday, the $8 billion designated for the program will be depleted, ending a program that critics say has benefited developers and high-profile corporations at the expense of ordinary New Yorkers.
Two projects familiar to NoLandGrab readers and which received Liberty Bonds are Frank Gehry's IAC Headquarters in Manhattan and Bruce "the Juice" Ratner's Atlantic Terminal mall (that's the Bank of NY office tower mentioned below).
If developers of residential projects were quick to embrace the Liberty Bond program, commercial developers were much slower to respond. So early on, officials awarded the low-interest financing to other projects that they believed would benefit the city’s economy. A division of Forest City Ratner got $90.8 million worth of financing to build a new office tower in downtown Brooklyn for the Bank of New York, which suffered heavy losses on Sept. 11. (Forest City Ratner, The New York Times Company’s partner in the development of a new headquarters building on Eighth Avenue, applied for Liberty Bond financing for that project but was turned down.)
NoLandGrab: We may be going out on a limb here, but hasn't development in Lower Manhattan been held up for years in a game of political football? If developers didn't queue up right away before the program was expanded, it was likely no fault of their own.
It's a little incredible to offer the lack of interest of commercial developers as the reason for expanding the program, in the face of criticism that the program was another porcine free-for-all for NYC developers.
Posted by lumi at July 12, 2006 10:27 PM