Federal, state officials agree to lease half of Freedom Tower at World Trade Center site

Sunday, September 17th 2006, 7:03 am

By: News On 6

NEW YORK (AP) _ Federal and state officials have agreed to rent half of the Freedom Tower when it opens in about five years at the World Trade Center site _ sealing one part of an elaborate deal that would, if finalized, divide control of what to build there.

The federal General Services Administration and the state Office of General Services signed agreements last week to rent 1.1 million of the Freedom Tower's 2.6 million square feet of office space, officials announced Sunday.

The 15-year leases include space for the governor's office and the U.S. Customs and Border Protection office that once occupied one of the smaller buildings in the trade center complex.

``Our collective vision for a rebuilt World Trade Center continues to be realized,'' Gov. George Pataki said in a prepared statement.

The pact is one of several needed to secure a final deal this week with developer Larry Silverstein and the Port Authority of New York and New Jersey, the government agency that leased the twin towers to Silverstein six weeks before they were destroyed on Sept. 11, 2001. The agency hopes to vote on the deal at a Thursday board meeting.

After months of bitter, prolonged negotiations over who should build what at ground zero, Silverstein agreed in April to give up his role as landlord of the Freedom Tower and a second planned skyscraper and build and develop the three other planned towers at the 16-acre site.

The deal depends on agreements by the state and federal governments, the Port Authority and the city to lease more than 2 million square feet of office space in the Freedom Tower and one of Silverstein's towers.

The federal government agreed to rent 600,000 square feet of office space and the state agreed to take 415,000 square feet at the Freedom Tower, paying $59 a square foot to the Port Authority when the building opens in 2011. Downtown Manhattan office space rentals are currently about $40 a square foot.

Silverstein had initially asked for up to $78 a square foot in rent from both the city and the Port Authority for space in the tower under his control. The tower would open the same year as the Freedom Tower.

Officials involved in the talks said negotiations continued over the weekend over rent and other issues, such as the timing of when the developer would be allowed to begin construction on his three towers at the site. Officials declined to comment on the negotiations.