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NEW YORK CITY-Having recently submitted logistical drafts to their respective insurers for renovation cost coverage, tenants at the 15-story, 1.1 million-sf Federal Building, located just north of the World Trade Center site, expect to reoccupy the property early next year. Robert Selsam, senior vice president at Boston Properties, which manages 90 Church St., tells GlobeSt.com that the structure, condemned following the Sept. 11 attacks, “will be in entirely clean condition and ready for tenants by late next spring.” Boston Properties has also submitted a draft for coverage of renovations they are undertaking for the lobbies and elevator shafts in the building.

The building’s three tenants are the New York City Housing Authority, which occupied seven and a half floors; the Legal Aid Society, whose headquarters occupied 150,000 sf on three floors; the US Postal Service, which owns the building and took up six floors. All three are still under lease, Selsam tells GlobeSt.com. NYCHA is insured by Burbank, CA-based Allianz Insurance Co., a subsidiary of European insurance giant Allianz; the Legal Aid Society’s insurer is Stanford, CT-based Hartford Life Inc.; and Boston Properties is covered under Johnson, RI-based FM Global.

An NYCHA spokesman estimates the “total business recovery cost,” including both employee relocation efforts and renovation costs for their space in the Federal Building at $93 million. “As a result of Sept. 11, we’ve had to take a number of measures to relocate the approximately 1,500 employees from that location to our existing space at 250 Broadway in Manhattan, 350 Livingston St. in Brooklyn and our Long Island City facility,” he tells GlobeSt.com. “Additionally, we have sublet nine floors at 90 5th Ave. in Manhattan as part of the accommodation.”

Erected in 1935, the property sustained non-structural damage in the Sept. 11 attacks and was subsequently condemned. “It was a real contamination cocktail,” a Legal Aid Society spokeswoman tells GlobeSt.com. “Mold, fumes from the plane wreckage, part of which punctured the roof of the building, asbestos, mercury and additional heavy metals were all detected and forced us out.”

The Legal Aid Society was largely decentralized following the move, and is now eager to return. “We had originally hoped to move back by the end of 2001, but now our goal is to spend Christmas of 2003 in the Federal Building,” says the spokeswoman. “There is no question that Boston Properties expects to have everything ready by then.” She would not speculate on whether the Legal Aid Society would consider seeking an alternate space if renovations lagged, adding only “during the next few months, we must make some concrete decisions on the future location of our company.”

A US Postal Office spokeswoman tells GlobeSt.com that its letter carrier operations, moved to the James A. Farley Post Office building at 8th Ave. and 33rd Street, should be relocated back to the Federal Building in late 2003. They plan to reoccupy the bottom four floors of the building, although the structuring of employees may change. “We may end up rearranging the furniture as this moves forward, so to speak,” says the spokeswoman. Meanwhile, the Postal Office’s processing facilities have been indefinitely relocated to the Morgan Postal Facility at 9th Ave. and 30th St. following the Federal Building condemnation.

Biding time until its return, the Legal Aid Society this week moved approximately 75 employees in its civil administration division into a 33,000 sf sublease at 199 Water St. for 18 months. They have also signed a similar stint for its central administration employees with a short-term lease signing for 36,000 sf on the 22nd and 28th floors of 1 Battery Park Plaza. “These are short-term deals because we expect to be back in the Federal Building by the time they terminate,” says the spokeswoman.

“It’s safe to assume they are using these short leases to wait until they can safely move back into the Federal Building,” a source close to the Legal Aid signings tells GlobeSt.com. “Until then, all they can do is sit back and hope.”

Bob Tunis, senior executive managing director for GVA Williams, represented the Legal Aid Society in the 199 Water St. lease, while Bob Romano and Bob Brenan represented the sublessor, Prudential Securities. The space became available as a result of Prudential’s ongoing consolidation efforts in the building, Tunis tells GlobeSt.com. GVA Willams is also currently marketing another 60,000 sf of Prudential space in that building.

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