Study: NYC's 9/11 recovery due to fed aid

A file photo of the redevelopment of Ground Zero in... — A file photo of the redevelopment of Ground Zero in lower Manhattan. (Aug. 12, 2009) Credit: AP

By ANTHONY M. DESTEFANOanthony.destefano@newsday.comAugust 31, 2011

A massive dose of federal aid to New York City after the 9/11 attacks -- both cash and tax breaks -- played a major role in the rebuilding and revival of lower Manhattan, according to a study released Wednesday by a city budget office.

The study found that the more than $20 billion helped preserve the city's role as a global financial center, spurred rebuilding efforts and contributed to significant growth in downtown housing.

"Although some rebuilding projects were slow to start, in most instances these projects are now under way and making use of the promised federal funding," according to the study, conducted by the city's Independent Business Offices.

But the agency, which analyzes city budgets and expenditures for the public, said that nearly $3 billion in tax breaks that were part of the post-attack federal aid package might go unused. That could occur, according to the study, because the tax breaks can't be redirected to projects such as a direct rail link between lower Manhattan and Kennedy Airport unless approved by Congress.

"It is remarkable that such a high percentage of the money promised has been spent so well helping to save downtown," Sen. Charles Schumer (D-N.Y.) said Wednesday in a statement. Schumer said he would continue to push for the redirection of the unused tax breaks.

The study noted that the biggest share of the aid, $4.6 billion, is being used to build the destroyed World Trade Center transportation hub and the Fulton Street transit center.

Another large chunk of the aid package was $8 billion in Liberty bonds earmarked for commercial and residential construction and development.

The bonds have financed a number of projects, including the construction of the completed 7 World Trade Center, Tower One, the Goldman Sachs headquarters in the World Financial Center, and various projects of Silverstein Properties such as Towers Two, Three and Four, according to the study. The Liberty Bonds are also being used on additional city projects such as the Atlantic Terminal in Brooklyn.