Instead of selling general obligation bonds, the Bloomberg administration created a special debt-selling entity – the Hudson Yards Infrastructure Corporation. The bonds will be repaid with so-called payments in lieu of taxes that developers will make once their buildings have gone up.
But the city is paying higher interest rates than it would have if it had sold general obligation bonds, said Parrott of the Fiscal Policy Institute. There is a risk that the payments in lieu of taxes will not be enough to repay bondholders – and the city has agreed to appropriate the money if there is a shortfall, he said.
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