NEW YORK CITY—In a unanimous vote Wednesday, the PortAuthority of New York and New Jersey's board ofcommissioners voted up a plan to allow construction to proceed onSilverstein Properties Inc.'s 3 World TradeCenter. The agreement, which taps into $159 million of previouslyescrowed insurance proceeds, $50 million of which will be releasedimmediately, appears to resolve longstanding uncertainty overfinancing of the 80-story office tower at the World Trade Centerredevelopment site.

The agreement minimizes the amount of senior debt SPI will needto incur on the 2.5-million-square-foot 3 WTC, while also limitingthe Port Authority's exposure to the same level that was set in its2010 agreement with SPI. The developer expects to raise $300million in mezzanine debt and/or private equity, as well as $1.2billion to $1.3 billion of senior fixed-rate bonds. The remainderof the capital contribution includes $463 million in insuranceproceeds, as well as $210 million in state and city funding.

Along with enabling SPI to begin construction on the tower inthe third quarter, with a targeted completion date of 2018, thedeal also assures that anchor tenant GroupM willretain its 515,000-square-foot commitment there. For the Port, theagreement puts the authority in line to receive $300 million inrental revenues, while also saving it $14 million as it reduces itslease at the tower from 15 floors totaling about 600,000 squarefeet to 13 floors totaling 520,000 square feet.