News Corporation and 21st Century Fox, two giant media companies controlled by Rupert Murdoch,
are considering building a joint headquarters in a new 88-story
skyscraper at the World Trade Center, real estate executives and
government officials said this week.
If
a deal is struck, the move by the companies from Midtown Manhattan to a
new tower downtown would complete the rebuilding of the office complex
destroyed on Sept. 11, 2001.
It would also solidify the transformation of Lower Manhattan into a
technology and media hub and a lively residential community.
The companies, which include Fox News and The Wall Street Journal, have been in discussions for months with the Port Authority of New York and New Jersey, which owns the site and the developer Larry A. Silverstein,
who has the rights to build the fourth and last office tower at the
site, known as 2 World Trade Center, according to the real estate
executives and government officials, who spoke on the condition of
anonymity because the deal had not been made final.
“This
move would establish media hegemony in Lower Manhattan,” said Mitchell
Moss, a professor of urban planning at New York University. “News Corp.
and Fox are in everyone’s living room. It removes any uncertainty that
the new trade center would be a major economic engine, and it validates
the 15-year effort to rebuild the World Trade Center.”
News Corporation
and 21st Century Fox would require a substantial revision to the
long-planned 2 World Trade Center, at Vesey and Greenwich Streets, which
the British architect Norman Foster
designed. The companies want the base of what is now a cruciform-shape
tower with a diamond crown to accommodate television studios.
Earlier
in the year, Mr. Murdoch’s companies looked and passed on the Related
Companies’ Hudson Yards project on the Far West Side of Manhattan. Mr.
Murdoch’s companies are now housed at 1211 and 1185 Avenue of the
Americas.
The
discussions on the trade center are shrouded in a confidentiality
agreement, but several executives who have been briefed on the plans say
both sides are spending an enormous amount of time and money assessing
the feasibility of the project.
Nathaniel Brown, a spokesman for 21st Century Fox, said on Friday that it and News Corporation “are each exploring options for their New York headquarters, and the process is ongoing.”
The two media companies would join Condé Nast, The Daily News, Time Inc., McGraw-Hill, American Media Inc. and MediaMath in moving to an area once known exclusively for its financial institutions.
The tallest tower at the site, the 104-story 1 World Trade Center, opened last year. Mr. Silverstein completed the 72-story 4 World Trade Center
in 2013 and is now building 3 World Trade Center, an 80-story tower.
But 2 World Trade Center, which is intended to have 3.1 million square
feet, remained in the planning stages, without an anchor tenant to get
the project off the ground.
Even
as the new trade center has taken shape, the surrounding neighborhood
in Lower Manhattan has undergone a major transformation. The area, which
20 years ago often looked like a ghost town at the end of the work day,
is now home to upscale restaurants, luxury retailers and more than
60,000 residents.
The financial industry, which lent the neighborhood its name, still has a strong presence. The New York Stock Exchange remains on Wall Street. The Federal Reserve Bank is on Liberty Street, and Goldman Sachs is an important downtown firm.
But
the industry’s footprint has been shrinking steadily. One Wall Street,
the Art Deco home of Irving Trust and Bank of New York Mellon, is being
converted into luxury apartments, as are many other older downtown
office towers. Chase Manhattan Plaza was sold to a Chinese company.
Time
Inc., and its stable of magazines and digital media properties, is
moving to the five-building office complex that was once known as the
World Financial Center. Merrill Lynch and Nomura, a Japanese financial
firm, are gone from the complex, and its owners have renamed it
Brookfield Place.
Mr. Murdoch is not unacquainted with life downtown.
HarperCollins,
the publishing division of News Corporation, is already in Lower
Manhattan, at 195 Broadway. In 2013, News Corporation spun off 21st
Century Fox, which includes television studios, Fox Entertainment Group
and various broadcast units.
The two companies have about 4,000 employees at their offices on Avenue of the Americas.
Yet
there are logistical issues at 2 World Trade Center, and the companies
have a history of failing to pull the trigger on major real estate
moves.
In
2008, News Corporation was a partner and anchor tenant in a bid by the
Related Companies to buy the West Side railyards for a 26-acre
residential and commercial complex. Related effectively dropped out of
the bidding a month before the final selection after a shaky economy led
Mr. Murdoch’s company to abandon the deal. Ultimately, Related did gain
control of the railyards after the winning bidder refused to sign the
deal.
Even
earlier, News Corporation negotiated for six months in 1989 with the
developer David Solomon to be the anchor tenant for a 42-story tower
under construction at the north end of Times Square. The two sides
failed to come to terms; Mr. Solomon tumbled into bankruptcy and lost
his building.
The
talks at the trade center began earlier this year. Initially, Mr.
Murdoch’s companies had wanted to gain control of the site from Mr.
Silverstein and build a smaller tower designed by their own architect.
That proved undoable for various reasons.
The
companies are now talking about taking about half of the building — 1.5
million square feet — designed by Mr. Foster, but they still may bring
in their own architect for the changes.
Given
that the foundation has been built, the two sides are assessing whether
the structure can accommodate the changes they want for television
studios.
If
it proves possible, it is still unclear what kind of subsidy deal News
Corporation and 21st Century Fox would want from the Port Authority, the
city and the state. Generous sales tax breaks are available downtown,
but there are no more tax-free Liberty Bonds, which were used to finance
the other office towers at the trade center.
Correction: April 10, 2015
An earlier version of this article misstated the year that the building at 4 World Trade Center was completed. It was finished in 2013, not last year.
An earlier version of this article misstated the year that the building at 4 World Trade Center was completed. It was finished in 2013, not last year.
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