Not Again

Ground Zero Construction Halted

After a whole decade, the new World Trade Center was finally being built, but now it’s at a standstill once again: A group of investors has delayed a $1.3 billion bond sale meant to finance construction of 4 World Trade Center because of concerns over the deal’s structure. The investor group has stakes in the general debt of the Port Authority of New York and New Jersey, which is backing the debt of Tower 4. The group says that issuing the new debt would damage the value of their holdings, because, if issued, it would be senior to existing debt. Until now, Tower 4 was being funded with insurance proceeds from the terrorist attacks, but in order to finish construction, Larry Silverstein, the developer, needs to see the tax-exempt “Liberty Bonds.” The Port Authority considers payments for the Liberty Bonds to be an investment, which it claims can be senior to general debt. But the group of investors in the general obligation bonds says the agency can only pay for operating expenses before paying off its general obligation debt. All of the financing must be in place by the end of the year to avoid construction delays.