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The Port Authority will pay 21st Century Fox and NewsCorp $9 million to move into 2 World Trade Center.
The board of the Port Authority of New York and New Jersey voted on Thursday to put $9 million towards a $43-million package of sweeteners intended to lure the two media companies controlled by billionaire Rupert Murdoch from their Midtown offices to become anchor tenants of the final tower of the new World Trade Center complex.
In addition to the $9 million from the Port Authority, Empire State Development is offering $15 million in tax credits, and developer Silverstein Properties will take a $19-million hit on the rent over the course of the 30-year lease for 1.5-million square feet at 2 WTC.
Securing high-profile anchor tenants for the as-yet-unbuilt 2 WTC tower was considered vital to completing the long-stalled project.
Silverstein Properties, which also developed 1 WTC and 4 WTC, signed a letter of intent with the two media companies in June, but Murdoch was reportedly holding out on inking the deal until the subsidies solidified.
“This is a deal that always made sense for the Port Authority,” said Janno Lieber, president of World Trade Center Properties, an affiliate of Silverstein Properties. “As their leaders acknowledged prior to a unanimous vote today, the Port Authority will receive $500 to $600 million over the next four years in exchange for a modest adjustment to 21st Century Fox and News Corp’s long-term ground rent.”
The total public support for the lease amounts to approximately $16 per square foot over the 30-year lease, according to the Port Authority, which owns the World Trade Center site. In its announcement, the authority pointed out that public subsidies offered to some tenants of 1 WTC and 3 WTC were as high as $250 per square foot, and said that ultimately the proceeds from the tower leases will in turn help subsidize public transportation projects.
“Jump starting construction of Tower 2 will not only move us one step closer to finishing the work we began on the World Trade Center site more than a decade ago, but will provide us with another revenue stream to finance more than $500 million worth of critical regional transportation projects,” said Port Authority Chairman John Degnan.