The Bond Buyer

September 10, 2002, Tuesday

SECTION: Pg. 1

LENGTH: 505 words

HEADLINE: Liberty Bonds Sought For Brooklyn Site 
Building Will House Bank of New York

BYLINE: By Ryan McKaig

BODY:
The New York City Industrial Development Agency board today will be asked to approve the issuance of $113.9 million in Liberty bonds to finance a 10-story office tower in downtown Brooklyn.

The project, which would feature 396,000 square feet of office space, is the first commercial project to be considered for Liberty bond financing. It would also be the first project to receive Liberty bond financing outside of lower Manhattan. Forest City Ratner's FC Hanson Office Associates would serve as developer of the tower, which would rise above a five-story, 375,000 square foot retail complex already under construction. Construction on the office tower is expected to begin later this year, with a completion date of mid-2004. The Bank of New York has agreed to be the anchor tenant for the project, and will occupy at least 80% of the tower with 1,400 employees.

Andrew M. Alper, president of the New York City Economic Development Corp., which also does business as the IDA, insisted the project would help stem the tide of businesses fleeing New York City in the wake of last year's terrorist attacks that killed nearly 2,800 people and left a 16-acre hole in the heart of Manhattan's financial district.

"This first Liberty Bond project will go a long way toward securing lower Manhattan's position as the financial capital of the world while contributing a great deal to the future of downtown Brooklyn as an important Central Business District," Alper said in a prepared statement. "It also allows The Bank of New York, one of the country's oldest and most important financial institutions, to satisfy regulatory requirements to decentralize its operations while remaining in New York City."

The New York State Housing Finance Agency last month approved three residential projects for Liberty bond financing, but only one of those deals has been cleared by the state's Public Authorities Control Board. Because it is a city issuer, the IDA does not have to seek approval for its bond issues from the control board.

The Liberty bond program was created by Congress in March to help spur the redevelopment of lower Manhattan. It allows for New York City and the state to issue up to $8 billion in special private activity bonds that are not subject to the state's private activity volume cap or the federal alternative minimum tax. The city and state can each sell a total of $4 billion in Liberty bonds, with as much as $2 billion in total bonds eligible for projects in other parts of the city beyond lower Manhattan.

The New York City IDA and the state's Liberty Development Corp. will sell bonds for commercial projects, while the New York State Housing Finance Agency and the New York City Housing Development Corp. will sell bonds related to housing needs. For commercial projects to be considered for Liberty bond financing by the IDA or LDC, they must first be recommended by a joint city-state selection committee.
 
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