Silverstein told the city last month that he was exercising his option to make the city government take on the 14 floors of office space at a yearly rate of $56.50 per square foot, spokesman Bud Perrone said Friday. While the developer is asking roughly 10 percent more for space at the nearby 7 World Trade Center, the decision guarantees him tenants for two-thirds of the building, since the Port Authority of New York and New Jersey has already agreed to move in.
"The City's commitment to take space back in 2006 was one of the key steps that enabled development to move forward," said Andrew Brent, a spokesman for Mayor Michael Bloomberg. The deal was part of an effort to spur stalled construction at the site.
"With the rebuilding now in full gear, the plan has clearly worked," Perrone said.
The tower is expected to be completed in late 2013, but the city doesn't expect to move in until the following year. While the initial lease will be for roughly 15 years, it may be extended by 20 more. Silverstein was required to give the city at least 32 months warning before he wanted them to move in. His decision to exercise the option was first reported in the New York Post.
Construction at the site has been repeatedly bogged down by disagreements and a difficult real estate climate. While plans initially called for Silverstein to build three office towers at the site, he is now building just this tower to completion. A second tower can move ahead only once he has secured some tenants, and a third tower is indefinitely postponed.
Another building, the 1,776-foot 1 World Trade Center — formerly called the Freedom Tower — is set to be completed in 2013.