The New York Times

September 10, 2002, Tuesday, Late Edition - Final

SECTION: Section B; Page 3; Column 1; Metropolitan Desk 

LENGTH: 428 words

HEADLINE: Liberty Bonds to Finance New Brooklyn Offices

BYLINE:  By EDWARD WYATT 

BODY:
A new Brooklyn office tower to be built by Forest City Ratner Companies and occupied by the Bank of New York will be the first commercial construction project to be financed by Liberty Bonds, which were approved by Congress in response to the Sept. 11 attacks, city and state officials said yesterday.

The board of the city's Industrial Development Agency is expected today to approve the issuance of $113.9 million in Liberty Bonds for the development of the 10-story building above Atlantic Terminal, the borough's largest transit hub, according to officials of the Empire State Development Corporation and the city's Economic Development Corporation. The new tower, with 396,000 square feet of office space, will be built atop a five-story retail complex under construction on a site bounded by Flatbush Avenue, Atlantic Avenue, Fort Greene Place and Hanson Place.

The Bank of New York, whose offices near Wall Street were severely damaged in the Sept. 11 attack on the World Trade Center, is expected to move 1,400 of 7,700 employees to the site and will occupy 80 percent of the office space beginning in mid-2004.

Keeping the bank in New York City has been a project of major importance to city and state officials over the last year. The bank was one of the few major financial institutions with executive offices, support staff and computer operations all in Lower Manhattan. As a result, it was unable to restore service to its network of automated teller machines for more than a week after the attack. The bank estimated the attack cost it $140 million.

The Bank of New York is one of the largest providers of securities settlement for Wall Street. It eases the movement of money and securities from stock and bond trades executed by brokerage firms. In that process, the bank holds large sums of cash for a day or two, and much of its income comes from investing that cash, an activity that was disrupted in the days after the attack.

The savings from the use of Liberty Bonds, which are tax exempt and therefore cost the issuer less in annual interest payments than similar, taxable financing, will flow to Forest City Ratner and do not have to be passed on to the Bank of New York.

But the bank itself was previously awarded a $37.5 million grant for keeping 7,700 jobs in New York City for at least 12 years. In addition, last month the Industrial Development Agency approved the bank for up to $2 million in sales tax exemptions for tenant improvements and the purchase of equipment and machinery.  http://www.nytimes.com