1. Page 1 of 2
Prepared June 5, 2015
The Natural Resilience Fund, Inc.TM©
75 N Broadway, Nyack-On-The-Hudson, NY 10960
Tel 917-750-2215 website www.naturalresiliencefund.org
Potential Funding Options for the $1 Billion needed for the ESCR
a.k.a. The Dryline a.k.a. The BIG U
Purpose:
Secure a mix of private and public financing in the amount of $1.3B to finance the design,
construction and otherwise undertake implementation and completion of resiliency
infrastructure capable of protecting NYC’s coastline business and residential communities. The
Dryline Resiliency Network would integrate various resiliency initiatives with the BIG U serving as
the spine and the resiliency needs of the community and private development projects. The first
stage of the Dryline Initiative is a span of 4.35 miles on the east side of Manhattan from 23rd Street
south just west of the top around to the Battery (Target Area).
Assumptions:
We anticipate that a financing mix of public, private and incentives sources would be
combined to meet the financing needs of the Dryline Initiative (i.e., staged financing) while
satisfying investor requirements and leveraging public benefits. We are setting $1B as the target
for private sources with the remaining $335M coming in the form of the already committed
federal funds by HUD’s Rebuild by Design for what is now called by the City as the East Side
Coastal Resiliency (ESCR) project or can be new public funds. These private funds would
represent a 3 times match to the existing HUD Grant.
Option 1:
Underwrite a “Resilience Bond” comprised of taxable and tax exempt components. This would
be a revenue bond tied to revenue sourced from either 1) a surcharge on property & casualty
(P&C) and business interruption (BI) premiums on a progressive basis for property owners, renters
and businesses in the Target Area, or 2) a progressive surcharge on personal and business
income tax on residents and businesses located in the Target Area.
Based upon a $550M HDFC rental revenue bond offering by Merrill Lynch and Citibank for 8
Spruce Street in lower Manhattan (issued November 2014), the tranches would range from 3% to
4.5% depending on tax-exempt status and debt service coverage ratios. With a 3.7% average
cost of debt, the annual debt service on $1B would be approximately $55 million per year under
a 30-year amortization.

2. Page 2 of 2
Prepared June 5, 2015
The Natural Resilience Fund, Inc.TM©
75 N Broadway, Nyack-On-The-Hudson, NY 10960
Tel 917-750-2215 website www.naturalresiliencefund.org
Option 2:
Forgo the issuance of debt and assess the $1B needed on individuals and businesses (i.e.,
people living and entities operating businesses) in the Target Area on a progressive basis.
Supplemental Sources of Gap/Seed/Initial Tranche Financing:
The City and State might want to consider the following interim financing sources as we expect
surcharges on either insurance premiums, assessments or some form of income tax will take 3 to
5 years to implement. An Agency like the Lower Manhattan Development Corporation (LMDC),
authorized to issues debt or income surcharges would not require the City and State to
guarantee the offering. Pension funds have expressed initial interest in this type of
impact/infrastructure investment.
EB-5 Financing. The New York Wheel project secured EB-5 funding within 18 months - from
conception to funding. EB-5 offering of $250M+ could augment the Resilience Bond with a
mezzanine debt structure at +/- 3% interest rate with a +/- 15 year amortization schedule.
Zero Coupon Bond. A zero coupon bond offering of $250M would convert into or be folded into
Options 1 or 2, when the surcharge or assessment or tax is approved.
Private Development Funding. An RFP could be conducted by NYCEDC to secure a private
“Master Developer” (e.g., the Durst Organization, the Related Companies, The Rudin family,
Vornado Realty Trust, Extell Development, etc.) to start a public/private partnership to explore
revenue opportunities for the Dryline. The Master Developer would fund the venture with an
initial investment of $100M. This investment could help complete the shortfall for the ESCR
compartment one budget.