Deloitte and Brook field Properties have finally completed their direct deal for the accounting giant to remain in 400,000 square feet at 4 World Financial Center — and expand with future options for an additional 230,000 square feet.
To complete and sweeten the lease — which sources say is in the $40s-square-foot range and far above what a New Jersey deal would have cost — Deloitte is also now asking the New York Industrial Development Agency (IDA) for state and city sales tax breaks for fixtures and furniture used in the space.
Deloitte had been subleasing from Merrill Lynch under a deal that expires in 2013. The industry has been watching Deloitte’s space search closely as tenants of this size can break or make buildings — as well as markets — and a Deloitte loss would have been a disturbing jolt for downtown.
New Jersey had already approved $42 million through its employment-incentive program to relocate about 1,400 workers.
While rumors of a World Financial Center pact were rampant this spring, neither Brookfield nor Deloitte’s brokers at Cushman & Wakefield have been willing to comment — even now with the notice for the July IDA hearing made public.
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A request by Thomson Reuters to add locations to its original Reuters incentives has been re-calendared, according to an IDA notice. A bitter dispute has prompted the Newspaper Guild of New York to try and prevent the merged media company from flipping its-so-far-unused city and state IDA sales tax exemption benefits from a 400,000-square-foot space at the Reuters Building at 3 Times Square to the 435,000-square-foot space commanded by the Thomson Reuters headquarters at 195 Broadway, along with a handful of other legacy Thomson Financial locations — bringing the total to 533,000 square feet.
Newspaper Guild President Bill O’Meara says the union doesn’t think moving the benefits to other buildings is appropriate “in this case” because Reuters did not add jobs but acquired them in the merger and “vital city services are being cut” due to budget cuts.
Still, the company will have to spend its own dough on any spruce-up by buying new furniture and fixtures before its tax exemption kicks in.
Sources say Thomson Reuters has agreed to hav ing a downtown “corporate head quarters” rather than just a “US headquarters,” and has promised to add jobs in the city and not in its major Stamford, Conn., location. The media company has moved its target from 1,800 positions to 3,744 positions and is pushing out its IDA agreements by an additional five years.
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The law firm of Haynes & Boone is doubling its space in a move from 1221 Ave. of the Americas to 74,600 square feet at 30 Rock, where it will occupy the entire 25th and 26th floors come January. The nearly 16-year deal came with an asking rent of $70 a square foot — the “take” was much less — as well as newly renovated floors with snug windows to muffle “Today Show” concert crowds and Rock Center Christmas tree carolers.
Ken Rapp, Andrew Sussman and David Kleinhandler of CB Richard Ellis handled the space search for the lawyers while Calvin Farley worked the deal in-house for Tishman Speyer Properties.
H&B grew from its Dallas base to offices around the country while focusing on several legal areas. It has also ballooned here from sublease to sublease, starting in 2004 with just a single managing partner, Ken Bezozo, to now 50 lawyers who will move into this new direct lease. “We will have space for 90 attorneys,” said Bezozo, with a nod to it being H&B’s turn to sublease a small portion to another firm.
Haynes & Boone is also expanding its local real estate practice with multiple defections from the larger Paul Hastings — some just this week. “We operate like an old-time law partnership, which is why we are growing,” Bezozo added.
