Silverstein originally applied for up to $400 million in tax-exempt bonds to finance the shortfall in sources of funds for the project. The gap increased due to lower than expected insurance proceeds and increased financing costs. Preliminary approval of the Liberty Bonds had been granted in 2003. Silverstein has also emphasized that the development of the Freedom Tower will also necessitate Liberty Bond financing.

The 52-story 7 World Trade Center is the first Lower Manhattan office tower to be rebuilt after the Sept. 11 terrorist attacks. The 1.7-million-sf, 750-foot office is being constructed on a 58,000-sf site bounded by Greenwich, Barclay, Washington and Vesey streets leased by the Port Authority of New York and New Jersey. Tenant floors begin at the 11th floor above grade. The untenanted first 10 floors largely are given over to a series of huge bays housing transformers for a Consolidated Edison substation.

"This is a major step in the rebuilding of Lower Manhattan and the World Trade Center site itself," adds IDA chairman Andrew M. Alper. "This new, state-of-the-art building will provide tremendous support to the economic growth of Lower Manhattan."

Fitch Ratings sees today's recommendation as an important step toward the repayment of the existing bonds. "Today's IDA board recommendation for the increase in Liberty Bond funding amount is good news for the 7 World Trade Center bondholders," notes Karen Trebach, director, CMBS, Fitch Ratings. The Liberty Bond Program is designed to provide tax-exempt bond financing for major projects to revitalize Lower Manhattan and New York City using $8 billion in bond issuance authority. It is part of the $21-billion package of spending and tax provisions that New York received in the aftermath of the Sept. 11 attacks.

"The rapid construction of 7 WTC--which will open its doors in a year--is evidence of the exciting progress being made in the rebuilding effort, and the benefits of the public and private sector working toward a common goal," Silverstein says. He tapped CB Richard Ellis to be the exclusive leasing agent for the site. Steve Siegel, chairman of global brokerage for CBRE, is handling the assignment with colleague Howard Fiddle.