WORLD PROPERTY CHANNEL ®

(NEW YORK, NY) -- New York developer Larry Silverstein, down to his last $1 billion of insurance proceeds, is asking the federal government for a loan to complete the delayed 16-acre World Trade Center site in lower Manhattan.

Citing undisclosed sources, The Wall Street Journal also reported the Port Authority of New York and New Jersey is considering funding one of the three office skyscrapers planned for the site.

Initially planned to open between 2011 and 2013, the site would feature $7 billion of office space; a $3 billion Freedom Tower; a $3.2 billion transit hub; an estimated $3 billion shopping mall; and an estimated $2.5 billion performing arts center.

Current construction on the site includes preliminary work on the Freedom Tower, owned by the Port Authority, and a start on the foundation at one of the three office towers.  The memorial was scheduled to open in 2011-- the 10th anniversary of the attacks.

Sources close to the project say that among financing ideas currently being proposed is one that would have immediate construction on the three towers include only the first several floors slated for retail space.
 
That would get the infrastructure started for the three buildings. The office portions would be built as the economy improves.

But unanswered, project watchers say, is the question of whether retailers would agree to occupy space they might later need to evacuate because of new office construction above them.

The Wall Street Journal reports Silverstein initially planned to finance the towers through a combination of insurance proceeds, government-subsidized bonds and commitments by the Port Authority and the city of New York to occupy part of one tower.  Before its sale to Bank of America, Merrill Lynch was rumored as a major tenant for one of the towers.

After the Sept. 11, 2001 terrorist attacks, Silverstein settled with insurance firms for a total $4.5 billion. The developer used part of that money in 2003 to pay back his and partners' $125 million equity in the original 2001 purchase of the 16 acres, The Wall Street Journal reports.

An additional $563 million was used to pay off a mortgage on the Twin Towers.  On top of those expenditures, Silverstein's lease payments to date to the Port Authority come to $800 million.

The developer pays the Port Authority $79 million a year in ground-lease rent.  Silverstein signed a 99-year lease in July 2001.  

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