U.N. leases offices in N.Y.

NEW YORK — The United Nations yesterday said it has leased 15 floors of midtown office space, crossing the final logistical hurdle before the nearly $2 billion renovation begins in June.

The organization will shift some 1,800 employees to a Madison Avenue glass tower for up to six years, while the iconic Secretariat Building is stripped down to the concrete slab and rebuilt with modern systems and security.

The high price of temporary offices had threatened to derail the ambitious reconstruction effort, which includes the removal of asbestos-laden building materials, measures for the protection of visiting dignitaries and restoration of delicate historical architectural details.

The new space will run slightly more than $53 per foot per year — roughly half the going rate for comparable midtown office space. That works out to roughly $24 million per year.

The new location "will allow us to complete our swing-space needs while providing excellent proximity to the U.N. compound," said Michael Adlerstein, the architect who is overseeing the six-year plan.

He said the negotiations began in December and were vetted by U.N. procurement and the legal office.

The move will begin later this year or early next year.

The organization would not normally be able to afford 460,000 square feet of office space at 380 Madison Ave., an increasingly empty office tower on one corner of 47th Street.

Due to a complicated land lease, however, the office building is to become vacant in 2014, and few companies want to move into a building for only six years.

The building's owner, New York real estate titan Sheldon Solow, has a tangled history with the United Nations.

Mr. Solow is said to have opposed — loudly and powerfully — the organization's construction of a new building on city space at 42nd Street and First Avenue, just a few yards south of the U.N. compound. The New York State Senate finally denied the United Nations permission to build on the site in 2004.

Now Mr. Solow has offered the United Nations space in the office tower he plans to construct on the site of a former Con Edison power plant just one block south of the U.N. compound. The organization is an appealing tenant, unlikely to be affected by economic downturns. It could also be a magnet for international organizations or foreign missions seeking nearby space.

That office tower, as well as a half-dozen residential towers, was to have received the go-ahead last night by the New York City Council.

However, the United Nations has millions of square feet of nearby office space, almost all of it at deeply discounted rates.

These leases, which can cost as little as $23 per square foot — one-quarter of the prevailing prices — do not expire until 2023, giving the organization plenty of breathing room.