The city’s independent budget office (IBO) has released a report on New York’s post-9/11 disaster and recovery spending. So who got the Liberty Bond money?
As part of its $20.5 billion aid package, remember, Washington gave the city $1.2 billion to support $8 billion worth of “Liberty Bonds” — bonds that private companies could issue for real-estate development projects. No level of government (federal, state, or local) guaranteed the bonds’ repayment, but the bonds are exempt from federal, state, and local taxes, meaning that investors demand a lower interest rate on them.
Of the $6.4 billion in Liberty Bonds issued since 2003, only $3.8 billion – 59 percent — went to build projects at the World Trade Center site. WTC developer Larry Silverstein got about $3.1 billion, and the Port Authority took (or will take) $701.6 million for itself.
Who got the rest? Goldman Sachs got $1.7 billion for its downtown tower. The Dursts got $650 million for the Bank of America building (in Midtown). A Forest City (that’s Bruce Ratner of Atlantic Yards) office-tower project for BONY Mellon in Brooklyn got $90.8 million.
The rest went toward commercial real-estate projects scattered around Manhattan. Something called the National Sports Museum — which charges adults $30 for admission — got $52 million. (UPDATE: As Jonathan Trichter notes in the comments below, the museum defaulted on its Liberty Bonds in September 2008.)
One wonders if this $1.2 billion in foregone government tax revenue — real cash spending — would have been better spent on something else. Maybe some of it could have paid for the real bridge and tunnel projects that the Port Authority can barely afford to do now.
Was Goldman really going to move out of Manhattan without $248 million in disaster aid (the federal cost of the bank’s Liberty Bonds)?
And if the i-banking business doesn’t go so well in the next few years / decades, does anyone really think that this federal aid will keep Goldman from slashing jobs here?