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article image3WTC moves forward with major new tenant agreement

By Jordan Howell     Jul 9, 2013 in Business
New York - Construction on Three World Trade Center has been at a stand-still for months, stalled at the seventh floor waiting for more tenants. Now a preliminary agreement with the media giant GroupM has breathed new life into the fledgling project.
According to the New York Post, developer Larry Silverstein and GroupM have reached a preliminary agreement with the final deal likely to be completed in the coming months.
GroupM is reportedly interested in signing a 20-year lease for 515,000 square feet of office space at Three World Trade Center, or about one-fifth of the proposed size.
If the deal goes through, GroupM will be the first private-sector tenant in any of Mr. Silverstein’s three skyscrapers. Conde Nast Publications Inc. has agreed to over 1 million square feet in One World Trade Center, the tallest building in the western hemisphere, but that building is owned by the Port Authority of New York and New Jersey.
Three World Trade Center has been standing unfinished at seven stories above street level for months, its future in jeopardy after the financial crisis of 2007. Without tenants ready to move into the building, Mr. Silverstein has been unable to find a ready investor.
However, the deal with GroupM could see Three World Trade Center completed by 2015.
Under a 2010 agreement, Mr. Silverstein stands eligible to US $600,000 million in subsidies from the Port Authority, the city, and the state if he leases 400,000 square feet and raises US $300 million in addition funds.
If the deal goes through, it would mark an astounding turn-around for lower Manhattan, which has seen an exodus of banking and investment firms since the financial crisis.
The agreement will be critical to the “completion of our efforts downtown,” David Samson, chairman of the Port Authority, said in an interview with Bloomberg. “There are a lot of different pieces that need to come together in order to reach our objective of a fully built-out, fully developed and fully operational site, but this is certainly a key milestone.”
The deal would also vindicate Mr. Silverstein, who signed a 99-year lease to the site six weeks before September 11, 2001 and has struggled through scandals and funding shortfalls over the past twelve years.
GroupM first expressed interest in leasing space at the World Trade Center in October of last year but both sides have been quiet about the deal until this week.
The company currently has over 3,000 employees working out of three Midtown Manhattan locations.
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