Copyright 2003 Newsday

January 15, 2003 Wednesday QUEENS EDITION

SECTION: NEWS, Pg. A15

LENGTH: 404 words

HEADLINE: Financing OKd For Seven WTC;
Up to $400M in Liberty Bonds

BYLINE: By Graham Rayman. STAFF WRITER

BODY:
The Industrial Development Agency board approved up to $400 million in tax-exempt Liberty Bonds yesterday for developer Larry Silverstein to rebuild Seven World Trade Center.

The unanimous vote after a short discussion came amid criticism of the agency, a subsidiary of the city Economic Development Corp., for not releasing more information about the deal.

It was just the second commercial project approved from the pot of $6 billion in Liberty Bond financing; the first was a Bank of New York building in Brooklyn. The Liberty Bond program expires in 2004. "From what we see right now, we don't see the demand for $6 billion," said Economic Development Corp. Commissioner Andrew Alper. "It is unlikely that we will see $6 billion in construction eligible for Liberty Bonds in lower Manhattan by 2004. We are hopeful that if we have a pipeline of good transactions that we will be able to convince folks in Washington to extend the legislation."

The Silverstein approval comes at a time when the historically secretive Economic Development Corp. is trying to open up more of its inner workings to public scrutiny. Mayor Michael Bloomberg, Alper said, "has been very clear that he wants his administration to be transparent in everything we do."

Agency officials, however, refused this week to release many supporting documents related to the Silverstein application. Silverstein, for example, answered yes in the application to questions about involvement in past foreclosures, but the agency refused a request yesterday to release the attachments with the details.

"Our lawyers determined that that information was confidential, private and sensitive," said IDA spokesman Michael Sherman.

The budget to rebuild Seven World Trade Center is $706 million. In addition, Silverstein has declared he must repay an existing $489-million mortgage on the property. He already has $861 million in insurance proceeds, leaving him just under $400 million short. Yesterday's vote approved the project in general, but he must return for additional votes before the bonds are issued.

The city does not have to repay the investors if Silverstein defaults. But if all of the bonds are sold to New York investors, the city could lose up to $17 million in taxes, officials said.

Construction of the new 52-story, 1.6-million-square-foot building is scheduled to be completed in 2006.