Pataki today pledged his half of the remaining $3.4 billion in Liberty Bonds to Larry Silverstein’s buildings at Ground Zero. That’s a big shift from last week, when the Governor was expected to pool the state’s portion with the city’s and was letting Mayor Bloomberg drive the negotiations. The Mayor wants Silverstein to cede some of his 10 million square feet in development rights to other builders who would build residential, which Bloomberg believes will be rented or sold faster than will office space.
“The state will be working with Larry Silverstein to issue inducements for Liberty Bonds for the Freedom Tower and building two,” the Governor said today at a question-and-answer session, according to a transcript. “But we also have issues that still have to be resolved between the Port Authority and Silverstein…. We want this to be completely resolved within 90 days, but we’ll be issuing an inducement letter for the Liberty Bonds for the Freedom Tower so that can go forward.”
Originally, the city and the state each were given $3.2 billion in Liberty Bonds from the federal government for commercial projects around town to divvy up as they saw fit, and together they have spent about $3 billion so far. Silverstein had applied to the city’s agency, the Industrial Development Agency, for $3.345 billion, with the understanding that the state would also pitch in. But a state official told the Real Estate that after the I.D.A. decided on Monday to table the issue for another month, the Governor decided to go it alone.
This should bring a happy end to a day that Silverstein started with a Wall Street Journal article quoting his financial backer, Lloyd Goldman, who said that he would “evaluate and accept” a deal to reduce Silverstein Properties’ role at Ground Zero if it “makes sense.” (That’s to say nothing of the jolt he must have felt to have been called a “Power Geezer” by The New York Observer.)