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City Forced to Rent Pricey Ground Zero Office Space

By DNAinfo Staff on February 25, 2011 5:01pm  | Updated on February 26, 2011 10:04am

Cranes stand on the construction site of One World Trade Center, left, and World Trade Center Tower 4, right, in March 2010.
Cranes stand on the construction site of One World Trade Center, left, and World Trade Center Tower 4, right, in March 2010.
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AP Photo/Mark Lennihan

By Jill Colvin

DNAinfo Reporter/Producer

MANHATTAN — Developer Larry Silverstein will force the city to rent hundreds of thousands of feet of pricey office space at the new tower on the World Trade Center site when it opens in 2014.

Under an agreement negotiated in 2006 with the Port Authority, city and state, Silverstein had the option of requiring the city to lease 582,000 square feet of space in the new Tower 4.

In a move that will cost the city upwards of $32 million a year, Silverstein has now chosen to exercise that option, Andrew Brent, a spokesman for the mayor, confirmed.

Brent said that the agreement had been part of a larger plan for reviving Ground Zero as it struggled to rebuild, assuring developers that they wouldn’t be left high and dry if companies turned a cold shoulder to leasing at the site.

"The city’s commitment to take space back in 2006 was one of the key steps that enabled development to move forward," he said.

But the agreement poses a challenge to the administration, which has been on a campaign to rid itself of excessive office space.

Last summer, the city announced that it had identified 8,000 vacant desks in its municipal offices, occupying a whopping seven football fields of empty space. Mayor Michael Bloomberg vowed to cut down.

Under the deal, the city will pay Silverstein $56.50 a square foot for the class-A office space — significantly more than it typically spends.

Brent argued that, because of the high quality of the new Trade Center space, the city would be able to fit in more people per square foot than in its existing space, defraying some of the costs.

But the city can also theoretically sublease the space if it chooses to, Brent said.

Silverstein spokesman Bud Perrone declined to comment on what prompted the decision, but issued a statement saying that the 2006 agreement was intended to "expedite the entire World Trade Center redevelopment" and that "with the rebuilding now in full gear, the plan has clearly worked."