A Chinese company's statement that it had failed to obtain a letter of credit (L/C) for a lease on a prestigious piece of New York real estate has been interpreted as an indication that news of a U-turn on the future of Ground Zero was leaked before it was publicly announced.

Recently installed New York governor, Eliot Spitzer, who had opposed plans to build Freedom Tower on the land on which the World Trade Centre stood before the 9/11 attacks on New York, now says he supports the project.

China Centre

According to a report filed bySteve Cuozo and published in the New York Post, Beijing Vantone pulled out of a signed leaseon 195 Broadway after it received a tip off that Spitzer was going to approve the construction of Freedom Tower on Ground Zero.

Beijing Vantone, a Chinese real estate company, had long harboured ambitions to develop a China Centre at Freedom Tower but became fed up with waiting for a decision as to whether the project would go ahead.

Collapsed deals

The Chinese company, therefore, decided last year to sign a lease for space at another prestigious New York development, 7World Trade Centre,and after that deal fell through, it signed a lease for property at 195 Broadway, the former AT&T headquarters and celebrated as one of New York's classic buildings.

Shortly before Spitzer announced his U-turn on Freedom Tower, however, Beijing Vantone said it had been unable to arrange an L/C required for the 195 Broadway space, leaving the Chinese company free to pursue its ambition to acquireleasehold property in Freedom Tower.

Anonymous sources

Cuozo says he has it on the authority of several anonymous sources that the deal on 195 The Broadway fell through because the Chinese company had heard news of Spitzer's change of mind over Freedom Tower before it was officially announced.

Beijing Vantone, however, denies this explanation, and blames the failure to obtain an L/C for the 195 Broadway deal on its bank in China.

L/C troubles

This is not the first time the Chinese company has had problems with L/Cs. In 2006, New York property developer Larry Silverstein pulled out ofthe deal with Beijing Vantone for real estate at 7 World Trade Centre, citing the Chinese company's inability to honour its commitments in time as one of his reasons.

Beijing Vantone's chairman, Feng Lun, blamed the time the company's bankers took to arrange L/Cs as a reason for that deal falling apart, although he maintains that his Chinese bankers were not allowed sufficient time to inspect legal documentation prior to approving L/Cs for that deal.

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